Canara Start-Up Loans: Empowering New Businesses

Particulars	Details / Norms
Objective	To provide financial assistance and support to Startups recognized by DPIIT to foster innovation and entrepreneurship, create employment opportunities, achieve inclusive socio-economic growth and wealth creation.
Purpose	To provide financial assistance to Start-ups for their various business requirements as follows: Prototype creation, Product/App/Website development Purchase of Raw materials, machineries, equipment’s Licenses and Certifications Team hiring, recruitment of staff/training Legal & consulting services Marketing and sales Purchase/leasing of office spaces and/administrative expenses
Nature of Facilities	Need-based Working Capital – Fund Based (FB) and Non-Fund Based (NFB) Term Loan and Forward Contract for hedging forex exposures, if any.
Quantum of Finance	Minimum: Above Rs.20 lakhs. Maximum: Up to Rs.20 Crores.
Tenure of Limits	Working Capital: 1 year. Term Loan: Maximum 84 months including moratorium. Normal moratorium up to 12 months.
Guarantee Cover – CGSS	All eligible startup funding exposures to be covered under Credit Guarantee Scheme for Start-ups (CGSS) through NCGTC up to Rs.20 Crores per borrower. Guarantee cover: 85% of amount in default for loan amount up to Rs.10 Crores and 75% for loan amount exceeding Rs.10 Crores. *No overlapping guarantee schemes.
Annual Guarantee Fee	Fee payable as per NCGTC/CGSS guidelines. (Premium cost to be paid by the borrower)
Margin	Term Loan: 25% of project cost. Fund Based Working Capital against stock/book debts: 25%. NFB: as per extant guidelines.
Bank Processing / Other Charges	Nil processing/upfront fee for credit facilities up to Rs.1.00 Crore. For facilities above Rs.1 Crore: 50% of applicable processing/upfront fee. *CIC charges, out-of-pocket expenses, inspection, mortgage creation, stamp duty, service charges and other applicable charges to be recovered separately.
Documentation Charges	As applicable.
Security	Primary: Hypothecation of stocks/book debts and assets purchased/created from bank loan; Equitable mortgage of property/immovable assets purchased out of bank loan, if available. Collateral: Fully CGSS-covered cases up to Rs.20 Crores: no other collateral security. Non-CGSS cases: minimum 100% collateral in land/building/approved securities plus personal guarantee of property owners. Hybrid cases: unsecured portion mandatorily covered under CGSS. Personal guarantees of partners/directors/promoters as applicable. Charge on Intellectual Property rights (IPRs) to be registered. *Charges to be registered with Registrar of Companies (RoC) wherever applicable, CERSAI charge to be registered.
Insurance	Comprehensive insurance of all securities charged to the Bank. Tangible security to be adequately insured with Bank clause; premium borne by borrower.
Credit Bureau Score	Consumer CIC score requirements for partner/promoter/director to be complied with.
Ancillary Business	The following Ancillary business of the promoters/proprietors/partners/directors/employees of the unit shall be maintained with us: Salary and saving accounts Current Accounts Debit/Credit Cards Retail Loans POS machine and QR Code

The Start-up should have a valid Udyam Registration Certificate.
Borrower entity should be GST registered (wherever applicable).
Constitution: Private Limited Company, Registered Partnership, Limited Liability Partnership, Multi State Cooperative Society or a Cooperative Society registered under any State or Union Territory or as acceptable for classification as “Start-up” under Start-up India Scheme of GoI, or any other notifications issued in this regard from time to time.
GoI Norms: An entity shall be considered as a startup up to 10 years from the date of its incorporation, as per Government of India guidelines, issued from time to time.
Registration: Should be registered with/ recognized by DPIIT, Government of India, or any other Government Department.
An entity shall cease to be a Start up on completion of ten years from the date of its incorporation/registration or if its turnover for any previous year exceeds Rs.200 Crores.
Facility can be extended under sole banking arrangement only.
CMR guidelines as per extant guidelines shall be applicable.
Start-ups having sustainable and viable business model & also having the support of recognized Incubator/ Accelerator/ Investors available as per the Start-up India Portal.
Startup should have moved beyond proof of concept and prototype testing stage. Revenue should have commenced i.e., the unit must have acquired customer(s).
Startup not in default to any lending/investing institution and not classified as Non-Performing Asset as per RBI guidelines.

An entity shall be considered as a Start-up (as per DPIIT guidelines) on compliance of following:

An entity shall cease to be a Start up on completion of ten years from the date of its incorporation/registration or if its turnover for any previous year exceeds Rs.200 Crores.
In the case of an entity recognized as a ‘Deep Tech Startup’
- The period specified shall be up to 20 years from the date of its incorporation or registration; and
- The turnover limit shall be rupees three hundred crore for any of the financial years since incorporation or registration.
Startup, including a Deep Tech Startup, shall deploy its funds primarily towards its core business activities, innovation, research, scaling, or operational requirements, and shall not engage in activities or investments of the nature, except in the ordinary course of its business as per DPIIT guidelines.

Note: *An entity formed by splitting up or reconstruction of an existing business shall not be considered as a “Startup”.
*No Corporate loan is to be considered for Start-ups.

Scheme is applicable PAN India and all branches are eligible to process the loans under Canara MSME Startup Plus scheme.

Customer Identification proof along with Uniform application form for Startups.
Address Proof of unit and promoters.
License/permissions/ Unit’s incorporation documents- viz. Startup Registration from DPIIT, Memorandum & Article of Association/ Partnership deed/ Trust Deed/ Bye-laws of Society, as the case may be.
Business Plan/Documents submitted for Startup registration.
Full set of audited balance Sheet for the last 3 years (for existing units).
Assets & Liability statements of the promoters/guarantors, duly notarized.

*The above list is illustrative only, however, for appraisal, Banks may request additional documents, if necessary, as per bank’s policy and the nature of activity/ business model of the unit/ product features of the Start-up.

1. Rate of Interest:

Rating Grade	ROI
Up to LR 3	RLLR
NR	RLLR+0.25% (i.e. presently 8.25%)
MR I & MR II/ CNR VII & VIII	RLLR+0.50% (i.e. presently 8.50%)

Note – Liquidity Premium to be added as per extant guidelines of the Bank.
In any case, Rate of Interest should not fall below RLLR.

2. Charges:

Nil processing/upfront fee for credit facilities up to Rs.1.00 Crore.
For facilities above Rs.1 Crore: 50% of applicable processing/upfront fee.

*CIC charges, out-of-pocket expenses, inspection, mortgage creation, stamp duty, service charges and other applicable charges to be recovered separately.

Canara MSME Start-up Plus

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