EDC’S CONSTRUCTION TERM LOAN SCHEME
||To provide financial assistance to units engaged in construction projects (residential/commercial/residential cum commercial nature).
||Up to 2 years.
||9.50% p.a. to 12.50% p.a.
||The loan is repayable within 5 years including a moratorium period upto 2 years, depending on repayment capacity of the project. The repayment will be in monthly/quarterly installments.
Frequently asked questions (FAQs)
What are my Loan Limits?
The maximum amount of loan shall be subject to the following limits:
- Proprietary concerns: Rs.400.00 lakh
- Partnership firms: Rs.700.00 lakh
- Corporate bodies/ Limited liability Partnership: Rs.1500.00 lakh
Who is eligible for the Loan?
Basic eligibility criteria are:
- The applicant/promoter(s) should have experience in construction line in last 5 years period and also should have successfully completed at least two projects of minimum built up area of 1000 m2 each in the period.
- Concerns setting up construction projects who have acquired land complying with the norms of the Corporation and should have obtained all the requisite and valid approvals for setting up the project of minimum built-up area of 1000 m2.
- The applicant should have a clear marketable title of the land and be agreeable to mortgage its immovable property as prime security and hypothecate its moveable assets with first charge to the Corporation or on pari-passu basis in case of consortium finance.
What security I shall offer for loan?
The loan shall be secured as per the norms (not less than 100% immovable security cover) of the Corporation by first charge of the Corporation on the following security with clear marketable title:
- Primary: The assets financed i.e. land, building & machinery, etc.
- Additional/Collateral: Commercial or residential non-agricultural immoveable properties or any other security acceptable to the Corporation on case-to-case basis, if required.
- Personal Guarantee of the promoters/directors/a suitable person of sound financial means, etc. could be insisted in addition to the above wherever felt necessary by the Corporation.
What is maximum Debt-Equity for my project?
The maximum Debt Equity Ratio for the borrowing entity including the existing debt (excluding quasi equity) shall not exceed 1.5:1.
How long is the Loan tenure and the moratorium?
The loan is repayable within 5 years including a moratorium period of upto 2 years, depending on repayment capacity of the project.
Do I have to repay my loan in moratorium period?
The borrower has to repay only the interest component on the outstanding amount.
Whether repayment of Loan is in monthly/quarterly installments?
For term loans the repayment of principle and the interest amount is scheduled on quarterly basis.
What documents are required for applying a Loan with EDC?
An appraisal for a loan is done in two stages. There are two separate forms and are available on the EDC website. These forms have a checklist of documents to be submitted at the last page.
What are the processing fees? Are there any other charges?
1% of the loan amount subject to maximum of Rs.2.00 lakh (plus GST as applicable). All the processing fees are non-refundable. Other than the above charges, there are no hidden charges.
Is the rate of interest charged on the loan is fixed or floating?
The rate of interest for a loan ranges from 9.50% p.a. to 12.50% p.a. The interest rate is based on the Credit Rating of the applicant and as per the Corporation’s guidelines and it remains fixed for the duration of the term loan. Interest rebate benefits are not applicable under this scheme.