FINANCING TO CUSTOM HIRING/ SERVICE UNITS

  • PURPOSE: Financing for setting up of custom hiring/ service units that maintain a fleet of tractors, bulldozers, well- boring equipment, threshers, combines, harvesters, etc. and undertake work for farmers on contract.
  • ELIGIBILITY: All individuals, organizations, institutions eligible to be covered under Agriculture credit as per extant guidelines issued from time to time.
  • NATURE OF FACILITY:
    • Term loan
    • Working Capital
  • EXTENT OF LOAN:
    • Term Loan – Need based.
    • Working Capital – Need based. Subject to max. 50% of the projected receipts with a maximum of 66% of realizable value of mortgaged IP.
  • MARGIN: Term loan – 25%
    • However, in case the entrepreneur owns unencumbered other farm machineries like sugarcane harvester/ planter/ seeder/ mulcher etc., the same will be treated as margin contribution.
    • Value of such existing machineries to be arrived at by charging depreciation @15% (7 years’ life) and 20% (5 years’ life) of the machinery.
  • REPAYMENT:
    • Term Loan – Maximum 7 years repayment period including gestation period (max. 1 year).
    • Working Capital shall be sanctioned for a period of one year and shall be subject to renewal/ review annually.