Looking for MSME Loan for Start-Ups from Union Bank of India?

You have landed at the right place. This page contains all the information you will need on Union Bank of India’s Union Start-up India Loan Scheme.

Union Bank of India Union Start-up Loan Scheme

This loan is designed to help new businesses get access to funds for engaging in activities such as innovation, development, deployment and commercialisation of new products, processes, services, etc. The maximum loan amount offered by the bank for this loan is Rs. 5 crore.

Features of Union Start-Up Loan

Why this Loan?

  • This loan is meant for any business entity incorporated or registered within the previous five years in India with an annual turnover less than Rs. 25 crore
  • The maximum loan amount for the Union Bank of India Union Start-up loan is Rs. 5 crore
  • The loan is extended as a term loan or working capital loan depending on the needs of the borrower

Loan Amount

  • The maximum loan amount you can get under this loan scheme is Rs. 5 crore

Interest

  • The interest rate for this loan is defined as the sum of one-year Marginal Cost of Funds based lending Rate (MCLR) of Union Bank of India and Credit Risk Premium. Currently, the MCLR of Union Bank of India is 7.20% and the credit risk premium may range from 0.50% to 2.00% depending on the credit risk rating of the borrower. This mean that the effective interest rate may range from 7.70% to 9.40% for this loan

Repayment

  • Working Capital Loan: These loans need to be repaid within 12 months subject to annual renewal subject to terms
  • Term Loan: These loans need to be repaid within a time period of 10 years after a moratorium of up to 2 years

Security Needed

  • The bank asks for hypothecation of assets created by bank finance for this loan
  • The bank may also ask guarantee under CGTMSE coverage

Borrower Contribution to Total Cost (Margin Money)

  • Union Bank of India takes a 20% margin for these loans

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank will cover the rest. So, if the total amount needed is Rs. 20 lakh, you will have to contribute 20% which comes to Rs. 4 lakh. The bank will provide the balance of Rs. 16 lakh.

Processing and Other Charges

  • Processing charges have been waived for this loan by the bank

Documents Needed for Individuals

  • Loan Application Form duly filled and signed by the applicant and co-applicant, if any
  • Two Passport Size Photographs of applicant and co-applicant
  • Personal ID Proof: Aadhaar Card, PAN Card, Passport or Driving License. PAN Card / PAN Card Issuing Letter is must
  • Signature Proof: PAN Card, Banker’s Verification, Driving License or Passport
  • Residential Address Proof (Any One): Aadhaar Card, Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income/Banking Proof: Last 6 months Bank Account Statement of applicant and co-applicant, Loan Statement of Running Loans, Latest Closed Loan NOC, Net Worth of the applicant and co-applicant
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report

Documents Needed for Proprietorship and Partnership Firms

  • Loan Application Form duly filled and signed
  • Partnership Deed and Partnership Registration Certificate
  • ID Proof of the Firm: Firm PAN Card or PAN Issuing Letter
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income Proof: CMA Data and Project Report, Debtors and Creditors Certificate, GST Return, Last 3 years ITR of applicant and co-applicant, Audited or CA Certified Computation of Income/Trading Account/Profit and Loss Account/Balance Sheet, Annual Audit Report and Tax Audit Report if audited, Form 16A if applicable, Net Worth of applicants, co-applicants and guarantors
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Partnership’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References

Documents Needed for Private Limited and Public Limited Companies

  • Application Form duly filled and signed
  • Company ID Proof: Company’s PAN Card
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Business Proof: AOA and MOA, Company Incorporation Certificate, Business Commencement Certificate, Board Resolution, CA/CS verified Share Holding Pattern, ROC Annual Return, DIN Certificate, List of Directors on Company Letter Head, GST Number, Form 32 in case of Director Change
  • Income Proof: CMA Data and Project Report, Last 3 Years ITR Acknowledgement copy of Company and all Directors, Last 3 Years Annual Credit Report or Tax Audit Report with Article 3CB, Article 2D, Article 3CD, TDS Certificate/Form 16A, Net Worth Certificate
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Company’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References

Reference Facts:

  • Union Bank of India Website: www.unionbankofindia.co.in and www.unionbankonline.co.in (net banking)
  • Headquarters: Mumbai, Maharashtra
  • Call Centre Toll-Free Number: 1800 2222 44, 1800 208 2244