Project Term Loan

TERM LOAN

A Term loan is a simply a Long-duration (secured) loan that funds the major Funding requirement of a typical Industrial Project.

The duration may last from 5-15 years for an Industrial Goods or Infrastructure Project loan.

Rate of interest charged under these loans may be on a fixed or floating basis, which will vary with market fluctuations.

AVALON offers a great Package for the TERM-LOAN product as follows:

OFFER VALUE:

Term Loan < Rs 2.0 Crs : 2.5 % of Term Loan value.

Term Loan (Rs 2.0 – Rs 5.0 ) Crs   : 3.0 % of Term Loan value.

Term Loan > Rs 5.0 Crs                   : 3.5% of Term Loan value.

Features of Term Loan

The features of term loans are as follows:

  • Term loans are Secured Loans. The asset that is purchased using the term loan amount, will serve as a primary security and other assets of the company will be serving as collateral security.
  • The Loan has to be repaid within the fixed term of 7-15 years.
  • The Interest rate on the loan is charged after evaluating the credit risk of the proposal, the loan amount and tenure for which the loan is taken. The interest rate will be subject to a minimum lending rate.
  • The Term loan will have a Moratorium of 1-2 years after which the EMI’s will commence till the loan maturity.
  • The EMI’s are the equated Loan instalments set by the Lending Entity over the duration of the liability.
  • If defaulted the Term loan amount can be converted into Quasi-Equity as per a special deal between the 2 x parties.
  • Commitment fee is charged on the unutilized loan amount.
  • Commercial banks’ term loan is repayable in equal quarterly installments whereas financial institutions’ term loan is repayable in equal semi-annual installments.

Business Loan Documents

The documentation required is simple and straightforward. Following are some of the documents which will be required:

  • Application form with Passport size photographs of all applicants and co applicants
  • PAN Card
  • Identity Proof – Voter ID / Driving License / Passport / Aadhar Card (Any one can be submitted)
  • Address Proof – Voter ID / Driving License / Passport / Telephone Bill / Electricity Bill / Registered Lease Deed or Sale Agreement / Bank Statement (Any one can be submitted)
  • Ownership proof of either residence or office either in the name of applicant or jointly with family members
  • Business Continuity Proof – Any one document dated 5 years old (Bank Statement / Sales Tax Challans / IT Returns / Shops & Est. Certificate / Certificate of Incorporation / Partnership Deed)
  • Letter certifying end use of the Business Loan funds on business letterhead.

List of Financial Documents Required

  • For Self-Employed Individuals / Sole Proprietorships
  • Latest audited ITR and financials for the last 2 years. (Balance Sheet, Profit & Loss A/c., Computation of Income along with all schedules.)
  • Past 6 x Months Bank statements from the borrower’s main account/s and 3 months of all other bank accounts mentioned in the ( Notes to account): Balance Sheet
  • For Self-Employed Professionals
  • Latest audited ITR and financials for the last 2 years. (Balance Sheet, Profit & Loss A/c., Computation of Income along with all schedules.)
  • Past 6 x months Bank statements from the borrower’s main account/s and 3 months of all other bank accounts mentioned in the ( Notes to Account ) of the Balance Sheet
  • Educational certificate, Professional Qualification Certificate and Degree Certificate for professionals like Doctors, Architects, Chartered Accountants etc.
  • For Partnership Firms / Private Limited Companies
  • Latest audited ITR and financials for the last 2 years. (Balance Sheet, Profit & Loss A/c., Computation of Income along with all schedules.)
  • Past 6 x months Bank statements from the borrower’s main account/s and 3 months of all other bank accounts mentioned in the ( Notes to Account ) in the Balance Sheet
  • Partnership Deed and partnership authority letter for partnership firms
  • Memorandum and Articles of Association and Board Resolution from the company
  • Certificate of Incorporation (COI) for companies
  • Latest shareholding patterns for Private Ltd. / Public Ltd. companies