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Construction industry is one of the largest employment generating industries in the country. Apart from the employment generation it also contributes massively in Country’s GDP. Canara bank has proposed an Equipment Finance Loan with the sole purpose of purchasing equipment for running the business and provide financial assistance to all types of contractors for purchase of new construction equipment like JCBs, earthmovers, compactors, loaders, material processing machines, Fork Lifts, Crushing Plants, Drills, Road Rollers, Compressors, Dozers, Tippers, Dumpers, Hot Mix Plants, Wheel Loaders, Reach Stackers, Cranes, Backhoe Loaders, excavators, RMC plants , Graders , Concrete pumps, Transit mixers, pavers, Rock breakers, DG Sets etc. with a view to broaden the clientele base under MSME Segment.
Nature of facility
    Term Loan
  • Line of Credit(LoC) shall be pre-approved facility to our existing clients and shall be given for the purchase of equipment only.
Purpose "To provide equipment finance to Contractors (EPC & all other contractors excluding trade contractors/suppliers of equipment) for purchase of Construction equipment"
Target Group Existing/New clients(MSMEs) who are in the business for more than 2 years.
Quantum of loan
  • Minimum Loan above ₹10 Lakhs.
  • Maximum Loan up to ₹50 Crores for Existing/New clients who are rated BBB/BB or CNR VI Normal/CNR VIII Moderate Risk.
  • Maximum Loan Up to ₹100 Crores for Existing/New clients who are rated AAA/AA/A or up to CNR V Low Risk III.
Margin For TL & LoC varies between 5% to 20%
Repayment Period
  • Term Loan to be repaid in 36 to 60 EMIs.
  • LOC - to coincide with tenability of existing Working Capital limits & payment of individual term loans disbursed under LOC are also repayable as applicable to term loan.
Security
  • Primary : Hypothecation of construction equipment purchased out of bank finance.
  • Collateral : As per extant guidelines of the Bank.
  • Existing/New clients (MSMEs) who are in the business for more than 2 years.
  • There should not be any overdue in credit facility with our bank or with any other banks/FIs at the time of sanctioning the said facility.
  • Individual, firms, Companies and other entities involved in executing the contract registered and licensed with concerned authorities as contractor except Trust, Societies, Trade Contractors/Suppliers of equipment.
  • Line of Credit: Existing clients having one year of satisfactory dealing (including who are in business for minimum 2 years) and regular sanctioned working capital limit with Canara Bank subject to the fulfilment of the above eligibility criteria.
  • Customer Identification proof along with NF998 MSME application.
  • Address Proof of unit and promoters.
  • License/permissions.
  • Financial papers for the last 3 years with ITR and projections.
  • Details of Guarantor with proof of assets.
  • Valuation report.
  • Stock Statement.
  • Takeover under the scheme is not permitted.
  • Firm should not have incurred loss in the previous year.
  • No second hand equipment is to be financed under the subject scheme.
  • No assets to be financed under Rental/Leasing arrangement.
  • CGTMSE/CGFMU coverage wherever applicable to be obtained.
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Last updated on 05-10-2023 01:18 PM

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