Emergency Credit Line Guarantee Scheme is a very beneficial scheme for the Indian business holders as in the time of lock down the financials are on the lower. Now the businesses are required a financial breath. By smelling the financial crunch of the business owners the govt has declared the package of 3 Lack crore rs in the form of ECLGS. The facility which will be provided under this scheme is guaranteed Credit Line (GCL). Guarantee will be given by Credit Guarantee Trust. This is an automatic loan scheme. Below are the 11 points which helps the one to understand each and every detail of this facility.
What is ECLGS?
Emergency Credit Line Guarantee Scheme is backed by Credit Guarantee Trust. This Scheme Says all the MSME can get a loan facility up to 20% of the outstanding exposures on 29 Feb 2020. For this facility Govt has parked the fund of 3 Lakh Crore Rs. This facility can be availed by the existing Financial Institutions only from where the loan is running. Single bank can also offer 20% of total outstanding depending upon the NOC from all the other institutions.
Validity of this scheme?
This scheme is valid till 31 Oct 2020 and up to 3lakh crore.
Who can get benefited with this scheme?
All the Proprietor Firms, Limited Company, Trust, Pvt. Ltd. Company, LLP, Mudra Loan Client.
How much will be loan the tenure?
Loan Tenure for this facility is 4 years cumulatively. For the First year there will be a moratorium where in the interest will be payable only. For the last 3 years the amount will be paid in 36 EMI’s.
What all bank are eligible to provide this facility?
All the Commercials Banks, NBFc’s and MFI’s are eligible to provide this facility to the clients depending upon 2 years operational experience.
In which form this facility will be provided?
Bank can provide this facility in the form of WCTL and NBFC’s can provide in the form of Term Loan. Separate loan account will be created for this facility. It will not be considered as any kind of Top Up.
On which loans this facility will be available?
All the loans which are opted in the business units for the business purposes will be eligible for this facility. None of the Proprietor, Partner, and Director’s loan in individual capacity will be eligible for the same. Loans considered will be Mortgage Loans, Working Capital Limits, Business Loans Etc
How will you get loan?
It will be the automatic pre approved loan. Either existing financial institution or the customer can approach to the bank for availing this facility.
What is the ROI for this facility?
ROI is capped at 9.25% for Banks and 14% for NBFC’s.
What are the eligibility criteria for the borrowers?
• Pos of all the loans cumulatively on 29 Feb. 20 should not be greater than 25 Cr.
• Turnover should not be greater than 100 cr in last Financial Year.
• Loan account should not be SMA 2 on 29 Feb 20 (Delay payments should not be greater than 60 Days)..
What are the benefits of this scheme?
• Zero processing
• Zero Guarantee Fees
• Zero Foreclosure
