46 XX | Enlightener Series | | A. Public Sector Schemes

Disclaimer…before you read ahead!

The information contained herein is of a general nature and for information purposes only, with the intent of raising awareness around various resources, schemes etc. available for women entrepreneurs in India. It is not intended to address the circumstances of any particular individual or entity. It does not purport to be all-inclusive or necessarily contain all the information that may be relevant for the reader, and may be subject to updating, revision or amendment. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to remain accurate in the future. The reader, therefore, is required to exercise their discretion; and not act on such information without appropriate professional advice after a thorough examination of the particular situation.

Furthermore, we are not a lender and are not authorized by the Reserve Bank of India to act as one. By disseminating the information contained herein, we are not soliciting any borrower or customers for the company or organization mentioned herein nor do we intend to syndicate any capital for the reader of this article.

About this scheme…

Union Start Up Scheme, launched in 2016, is a loan offering by Union Bank of India (UBOI) to provide financial assistance to Start Ups across India for innovation, development, improvement of products or processes or services, employment generation or wealth creation.

How is it being implemented?

Under this Scheme, financial assistance in the form of loans is given exclusively to,

- Start-ups recognised by Department for Promotion of Industry and Internal Trade (DPIIT)

What’s on offer?

I. Product

Term loan, Fund based & non-fund based working capital facility
Ticket Size: ₹10 Lakhs to ₹10 Crores

II. Purpose:

Acquistion of or investment in fixed assets
Working capital requirements

III. Borrower Type:

Partnership, Limited Liability Partnership (LLP), Private Limited Company
For more information around this, please contact UBOI via means mentioned below

IV. Security or Collateral or Guarantee or Insurance

Security: Primary charge on tangible assets created out of Bank’s finance by way of hypothecation or mortgage etc.
Collateral:
- May not be required except when loans are sanctioned under hybrid model (term loan cum working capital facility)
- Eligible accounts to be covered under Credit Guarantee Scheme for Startups (CGSS)
- For more information around this, please contact UBOI via means mentioned below
Guarantee: Nil
Insurance: For more information around this, please contact UBOI via means mentioned below

V. Interest Rate

Term loan & Fund based working capital facility
- Calculated as Benchmark Rate + Spread (comprising of Credit Risk Premium (CRP) + Business Strategy Premium) + Additional CRP for Term loans of over ₹25 Lakhs with over 1 year maturity
- May range between 9.50% to 17.45% per annum
Non-fund based working capital facility: For more information around this, please contact UBOI via means mentioned below
For more information, check under Interest Rates for MSMEs by clicking here

VI. Processing Fee

Term loan
- For loans of ₹10 Lakhs upto ₹5 Crores: 1.30%
- For loans above ₹5 Crores upto ₹10 Crores: 1.10% subject to a minimum fee of ₹7 Lakhs
Fund based & non-fund based working capital facility: 0.25% to 0.40% per Lakh or part thereof
- For loans of ₹10 Lakhs: 0.30%
- For loans above ₹10 Lakhs upto ₹10 Crores: 0.35%

VII. Margin Money Requirement

VIII. Tenure, Repayments & Pre-Closures

Tenure
- Term loan: upto 10 years including moratorium period of 36months
- Working capital facility: 12 months renewed on annual basis
Repayments: monthly or quarterly. For more information around this, please contact UBOI via means mentioned below
Pre-payment & Foreclosure Charges
- Term loan: Pre-payment is applicable where repayment period is beyond 36 months at 2% flat charge on the amount of term loan prepaid as on the date
- of closure of the account
- Working capital facility: Pre-payment is not applicable
- For more information around this and foreclosure charges, please contact UBOI via means mentioned below

IX. Turnaround Time

7 – 12 days
Time limit starts from the date of receipt of completed loan application
For more information, check under Timelines for Disposal of MSME Proposals by clicking here

Interested? Read ahead to check your eligibility….

I. Are you recognised as Start-up by DPIIT, Ministry of Commerce and Industry, Government of India?

II. Has your Start-up reached stage of stable revenue stream, as assessed from audited monthly statements over a 12 month period, amenable to debt financing?

III. Your Start-up has not been in default to any lending or investing institution, and has not classified as Non-Performing Asset as per RBI guidelines?

IV. Is the constitution of your Start Up Private Limited Company, Registered Partnership and Limited Liability Partnership or as acceptable for classification as “Start Pp” under Start Up India Scheme of GoI?

V. Is your Start Up is looking to avail loan under under sole banking arrangement from UBOI?

VI. Is the CIC or Credit Score of Promoters or Directors above 750?

If your answers to the questions above are an emphatic YES, you are all set to avail loan under Union Start-Up Scheme!

So…how big is this scheme and what has been done so far?

I. This information does not seem to be available in the public domain

So, now, how should you go about it?

I. For submitting application:

Please apply under MSME Loan on the website here or here

Please contact your nearest Union Bank MSME First Branch, the details of which you can scroll & find here

Visit one of the 8,555 UBOI branches nearest to you

II. For information on application form and documentation requirements, look for MSME Application Form under MSME Application Forms Tab or Priority Sector Loans Tab here

III. For any queries, please contact UBOI via