SMP Initiative for Special Loan Scheme for Practicing CAs

An Initiative of the Committee for Capacity Building of CA Firms and Small & Medium Practitioners, ICAI …….

The Committee for Capacity Building of CA Firms and Small & Medium Practitioners, ICAI is set up to promote capacity enhancement of members and firms through Networking, Merger and raising core competency of CA professionals.

The Committee has taken a major initiative to arrange financial assistance to all members in practice / firms in the form of specially designed loan scheme through Corporation Bank. Through the scheme, eligible Chartered Accountants can avail finance for setting up of offices including cost of furniture/fixture/office equipments-computers and other accessories. The scheme would also enable the Chartered Accountants to finance a part of the working capital for building their profession and will also take care of the needs of fresher (CAs with experience below three years).

* Members & firms are requested to avail the benefits of this loan scheme. For further details, please contact nearest branch of Corporation Bank.

Highlights of the loan scheme are given below: Eligibility:

 Chartered Accountants, individually/jointly or Proprietorship Concern or a Partnership Firm/ Partnership with Limited Liability

 Age of the individual/ proprietor shall not exceed 65 years.

 The applicants/Firms are registered with Institute of Chartered Accountants of India (ICAI) and also holding valid certificate/license for carrying out the practice.

 The applicant’s/firm’s name shall not appear in the RBI defaulters list/CIBIL report.

 In case of Firms, all partners shall join as co applicants.

 The applicants/firms should not have been subjected to disciplinary action by the Institute.

Purpose:

 For construction of office premises

 For acquisition of ready built new office premises, partly or fully constructed

 To finance cost of land and construction thereon

 To finance cost of furniture & fixture, fittings of office equipments/computers/other accessories etc.

 To finance working capital and /or financing receivable

Nature of facility:

Demand Loan/Term Loan for acquisition of fixed assets and/or Cash Credit/Overdraft for working capital

Margin:

A. For Term Loan/Demand Loan: Uniform margin of 20%

B. For Working Capital: 25% for Book Debts/Receivables for cash credit or clean overdraft

 Value of land shall not exceed 50% of project cost in case of purchase of site and construction of premises

Quantum of loan:

Applicable For Existing Firms (Having Practice for 3 Years And Above)

Security:

a. Term Loan /Demand Loan: Assets acquired out of the loan.

b. For Working Capital Loan: Assignment of Book Debts/Receivable.

c. Collateral security: Suitable third party guarantee or Tangible securities.

Repayment:

 Term Loan - Repayable in maximum period of 10 years by EMI/PMI, initial moratorium of upto 18 to 24 months.

 Demand Loan - Repayable in maximum 3 years by EMI/PMI, including initial moratorium of 6 months.

 Repayment to commence from date of commercial operations or after completion of initial repayment holiday or as per the terms of sanction.

 Interest shall be serviced as and when debited.

Rate of interest:

Upto Rs. 10 lacs – Min. 10% (Base Rate + 2.25%)

Above Rs. 10 lacs – Min. 10.75% (Base Rate + 3%)

(Investment in fixed assets less than Rs. 100 lacs)

Above Rs. 10 lacs – Min. 11.75% (Base Rate + 4%)

(Investment in fixed assets above Rs. 100 lacs)

* Subject to gradation of the borrower

 Rate of interest at floating rate linked to Base Rate

 Rate of interest is subject to review

Note: Concession of 0.50% extended, if additional collateral security viz., property, LIC policies, Deposit etc., to the extent of 25% of loan amount is provided.

Processing Charges:

0.25% of loan amount subject to a minimum of Rs.5000/-

Prepayment charges:

-Nil