• Bank of India MSE Term Loan

    Bank of India provides secured loans that are ideally aimed to provide financial aid towards business needs of self-employed professionals, business owners typically those who would be falling under the category of Micro and Small Enterprises in rural, semi-urban, urban and metro areas. These loans can help out in the growth or in meeting urgent financial demands of any business.

    Where can a Bank of India MSE Term Loan be used?

    This secured loan is provided to self-employed individuals or entrepreneurs for the sake of furthering their business through the purchase of plant and machinery, equipment or other moveable assets. Long repayment terms allow the loan to function as an effective working capital tool.

    Eligibility criteria

    A secured business loan as this has a few eligibility criteria to be met in order for the financial institution to be able to sanction the loan. The eligibility requirements can be mentioned as follows –

    1. Applicants can be individuals, professionals, sole proprietorships, partnership firms and private limited companies (including closely-held public limited companies)
    2. The minimum turnover per financial year should be as per the set standards defined by the Industrial Act of India for MSME in case of Proprietorship, Partnership Firm, Private Limited Companies, Limited Companies (closely held), Societies and Trusts
    3. The minimum occupational stability for individuals and non-individuals needs to be 2 years prior to the application of the loan and the business should be having a positive trend in profit

    What are the types of financing under Bank of India MSE Term Loan?

    MSE Term Loan from Bank of India is a specific term loan with repayment period of up to 5 years.

    Maximum Loan Amount

    Based on the credit-worthiness of the applicant, placement of the enterprise and validity of documents, Bank of India can provide loans from INR 5 lakhs up to INR 1 crore.

    Typically, the upper limits of loans can be displayed in the following table –

    Enterprises located in Maximum Loan Amount (in INR)
    Rural Areas 5 lakhs
    Semi-urban Areas 10 lakhs
    Urban Areas 50 lakhs
    Metro Areas 1 crore

    Interest rate

    Interest rates for a MSE Term Loan could depend on the base lending rate and is based on the discretion of Bank of India. Further changes to the rates could be done by Bank of India as and when required. As per November 2015, the interest rate varies as per the amount of loan being availed. The differing slabs of interest rates are mentioned below –

    Loan Limits (in INR) Rate of Interest (per annum)
    <= 50,000 10.20%
    > 50,000 but <= 5 lakhs 11.20%
    > 5 lakhs but <= 10 lakhs 12.20%
    > 10 lakhs but <= 1 crore 12.95%

    Margin is charged at 15% by Bank of India

    What is the documentation required during applying for BOI MSE Term Loan?

    The standard list of required documents for applying for this loan are mentioned as follows –

    1. Photographs of each individual applicant and co-applicant, directors and promoters, in case of a company & Trusts, partners in case of a partnership firm or authorized person as applicable in case of societies
    2. Demand Promissory Note
    3. Deed of Hypothecation
    4. Instalment letter
    5. Equitable Mortgage as Primary Security wherever applicable
    6. IT Returns, Audited Profit and Loss Account statement and Balance Sheet for the last 2 years, six months bank statement of the primary current account, business proof, latest year provisional, sundry creditors and debtors list
    7. Certified true copies of bank account statements for the la
    8. st 6 months
    9. Know Your Customer (KYC) documents
    10. Partnership deed, Memorandum of Association (MOA) and Articles of Association (AOA) or License issued under the Shops and Establishments Act of the respective states for business proof
    11. Other connected documents applicable for Demand/Term Loans as per extant guidelines.

    The above set of documents comprise the minimum required list. To aid in credit approval, Bank of India might ask for extra documents if necessary.

    The secured term loan will accept the following as security against the financial aid being availed –

    • Hypothecation of Assets created out of bank finance as well as existing unencumbered assets of the MSE unit
    • Equitable Mortgage of Land or Land & Building which is part of the business activity such as business premises
    • Guarantee Cover under CGTMSE Guarantee Scheme

    What are the features of Bank of India MSE Term Loan?

    The MSE Term Loan from Bank of India is a good financing option for urgent financial needs on business grounds.

    Some key features of this specialised loan are as follows –

    1. Loan tenure or repayment period can be as high as 60 months
    2. Minimal documentation and faster approval
    3. Availability of financial aid in remote rural areas
    4. High loan amounts up to INR 1 crore

    Who can apply for Bank of India MSE Term Loan?

    The loan can be applied for through Bank of India’s branches, wherein relevant forms can be filled out and requisite documentation provided to initiate the process of availing the loan. Additionally, one could call or mail Bank of India requesting an executive assistance for application process.

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