SECURITY:

Loans are advances against equitable/registered mortgage of fixed assets of the industrial concerns. The Corporation also accepts personal guarantee of the promoter of the concern or of the directors in case of a limited company wherever it is considered necessary. It may also accept when it is considered necessary, the immovable properties in the State of Punjab owned by the individual partner (s) or by the members of the Hindu Undivided family, as the case may be, as on collateral security.

Loans for the purchase of generating sets and transport vehicles are granted against hypothecation of the assets purchased with the financial assistance, In case of transport vehicle the loanee or his guarantor has also to offer immovable property in the State of Punjab as Security in addition to hypothecation of the vehicle.
Loans under Single Window Scheme are granted against first charge on the entire assets of the concern both immovable and movable and collateral security of immovable property as decided by the Corporation.

PERIOD AND MODE OF RE-PAYMENT:

Period of repayment of loan is upto 10 years However, the exact period of repayment in each case is fixed keeping in view the repayment capacity of the concern. The interest and installments of principal are to be repaid quarterly further, moratorium in repayment of principal is provided for one to two years.

PROCEDURE FOR SEEKING FINANCIAL ASSISTANCE:

An Entrepreneur/industrial concern interested in seeking financial assistance from the Corporation is required to apply or contact the Head Office or any of the District Offices of the Corporation for requisite application forms. The entrepreneur is required to give brief information of the scheme. Constitution and the amount of loan required while requesting for application forms. The application forms are supplied free of cost. The Corporation, however, charges one time non-refundable processing fee from applicants seeking assistance for the processing of loan applications. The borrower will have to pay the processing fee @0.50% of the loan amount applied for. The amount so payable shall be deposited by bank draft drawn in favour of the Punjab Financial Corporation in two installments as under:-

a) 25% of the processing fee is to be deposited alongwith the loan application.

b) Balance 75% of the processing fee is to be deposited before disbursement of loan.
The processing fee is non-refundable. There is no processing fee of the loan upto Rs.5.00 lacs.

The applicant is required to fill in the forms and comply with formalities, after going through the checklist, which is supplied with the application forms. The check list enumerates the documents/information which should be enclosed with the application forms. The Corporation assists the applicant in filling up the application forms and renders any other related guidance.

INFORMATION TO BE FURNISHED ALONGWITH LOAN APPLICATION:

i) Loan application form duly filled in alongwith processing fee (25% of the processing fee and the balance will be deposited after sanction of the loan but before disbursement).

ii) REGARDING PROMOTERS:
a) Detailed bio-data of the promoters, age, attested photographs, educational and professional qualifications, past experience alongwith supported attested documents.

b) Proof of present & permanent Residence like P.A. Number (Income tax)/Voter Card/Passport/Ration Card duly attested.

c) List of total movable and immovable assets owned by each promoter and the liability there against, alongwith proof of assets e.g. copy of bank deposit, LIC Bonds, photo copy of sale deed/allotment letter etc. for immovable property.

d) Income Tax and wealth tax details for the last three years specifying those assessed and paid alongwith the copies of assessment orders/returns filed of the promoters Creditworthiness report from the bankers for all promoters.
e) Past dealing with financial institutions/banks if any.

iii) SISTER CONCERNS:

a) Name & brief history of other concern(s) in which the promoter(s) are interested.
b) Copies of the audited balance sheets and profit and loss accounts for the last three years for sister concern(s).
c) Banker’s report of sister concern(s) alongwith past dealing with the bank.
d) Income Tax details of Sister Concern(s).
e) Copy of latest Tax Audit Report wherever applicable.

iv) REGARDING GOVT.APPROVALS:

a) Certified copy of the registration as small-scale industrial unit from District Industries Centre or acknowledgement with Secretariat of Industrial Development, Government of India, for other than small scale units.

b) Memorandum and Articles of Association (if company’s case).

c) Certified copy of the certificate of incorporation (if company’s case).

d) Certified copy of partnership deed (if partnership concern).

e) Certified copy of registration certificate issued by the Registrar of Firms on Form A &C (if partnership concern).

f) Registration with the Tourism Department, Punjab and the licence for the eating house(in case of hotel industry).

g) Permission/Licence should be produced from the competent authority(in case of Textile Drugs/Food/Explosive Deptt./Rubber Board etc. unit) if applicable.

h) Details of the power requirement and tie up arrangements with PSEB.

i) Effluent treatment Scheme/Permission from Pollution Control Board.

iv) REGARDING CONCERN & PROJECT:

a) Cost of project including cost of land, building, machinery, miscellaneous items, preliminary and preoperative expenses, margin money for working capital and means of financing.

b) Certified copy of the recent date audited balance sheet.

c) Certified copies of the audited balance sheets and profit and loss accounts for the last three years (if existing concern.)

d) Resolution of the Board of Directors for financial assistance (company case).

e) Details of the existing building, if any.

f) Details of the existing machinery complete with specifications, year of purchase, price and make/supplier (if any).

g) Proof regarding availability of power load.

h) Certified copy of last Sale Deed issued by the Office of Registrar/Sub Registrar or photocopy of last Sale Deed duly attested by Notary Public to be obtained alongwith loan application.

i) Last Jamabandi.

j) Certificate from the Patwari that the mortgaged building etc. is being constructed on the same Khasra No. and the land proposed to be mortgaged is neither acquired nor any proceedings for acquisition are pending. Certificate should be counter signed by the Tehsildar.

k) Site Plan prepared by ‘Naksha Nawis’/Draftsman.

l) The property offered for prime security should be in exclusive possession of the Mortgagor duly demarcated/partitioned with free passage among co-sharers, if any. Details of land in the prescribed performa (As per annexure-S-IV).

m) Details of the building proposed to be constructed alongwith the building plan duly approved by the competent authority of the area/certificate from Registered Architect that building has been is being constructed as per the approved building map.

n) Details of the machinery proposed to be purchased, complete with name, specifications, price and make/supplier with name and complete address alongwith the basis of selection of the machinery.

o) Three quotations in respect of each item of plant and machinery proposed to be purchased.

p) Machinery loading chart in order to justify the plant and machinery proposed to be purchased.

q) Details of various raw materials alongwith name, specifications, consumption, present price and name of suppliers.

r) Details of specification of the product/product mix proposed to be manufactured with installed capacity of each and basis determining the installed capacity of the product.

s) Details of manufacturing process.

t) Justification of improvement of working results in case of expansion, diversification and replacement project.

u) Details of profitability and cash flow statement of the scheme for ten years.

v) Details of the proposed selling arrangements.

w) In case of collaboration for technical know-how with outside agencies, furnish the details of their reputation, past experience in the proposed line and copy of the proposed agreement.

x) Marketing and development scope of the proposed project. A copy of the market study, if available.

y) In case of execution of projects on turn key basis by outside agency, furnish the details of their reputation past experience, list of similar projects executed, qualifications and a copy of proposed agreement.

z) An affidavit ( As per annexure-D-XIII )from the owner(s) of the property to be mortgaged is to be obtained, certifying that he is the absolute owner of the property, free from all encumbrances or charges( statutory or otherwise), claims and demands and is not subject to any lien/lispendence, attachment or any other process issued by any court or authority and the said properties are in exclusive unintrupted ownership, since the date of its purchase/acquisition thereof and no adverse claims has been made against the property.

That the said property is not affected by any notice or acquisition and no proceedings are pending against the said property. That the owners have neither entered into any agreement for sale nor any General Power of Attorney for transfer of this property.

vii) VALUE OF PROPERTY/PRIME/COLLATERAL SECURITY:

A) PRIME :
Property in the shape of land for new proposal or land, building, machinery and other assets for existing industrial units/business based on realizable value supported by valuation report of approved valuer of the Corporation.

B) COLLATERAL SECURITY:

i) The Collateral Security only in the shape of residential plot/house/commercial in approved area and preferably in the possession of the borrower/owner (property in the shape of agricultural land shall not be accepted).

ii) Certified copy of last Sale Deed issued by the Office of Registrar/Sub Registrar or photo copy of last Sale Deed duly attested by Notary Public to be obtained alongwith loan application.

iii) Last Jamabandi alongwith a Certificate from Patwari with respect to all previous & existing charges of banks/financial institutions or any other agency on the property.

iv) Certificate from the Patwari that the building etc. is constructed on the same Khasra No. and the property proposed to be mortgaged is neither acquired nor any proceedings for acquisition are pending. Certificate should be countersigned by the Tehsildar.

v) Site Plan prepared by ‘Naksh Nawis’/Draftsman.

vi) The property offered for Collateral security should be preferably in the possession of the Mortgagor & duly demarcated/partitioned with free passage among co-sharers, if any.

vii) Land Performa

PROJECT APPRAISAL SCRUTINY OF LOAN APPLICATIONS AND ARRANGING INSPECTION:

After preliminary scrutiny of loan application, the case is placed before the Pre-appraisal Committee, which is normally held once a month, which discusses the case with the promoters and satisfied itself regarding viability projects and the norms of the appraisal. Thereafter, the Corporation arranges appraisal of the project. Efforts are made to ensure that applications are processed expeditiously.

Various aspects of project appraisal are discussed during appraisal.

A) TECHNICAL APPRAISAL:
- Product mix, manufacturing process and installed capacity
- Technology
- Location/site selection and infra-structural facility
- Size of the plant and the project
- Building requirement
- Selection and procurement of plant and machinery
- Raw material cost and availability
- Implementation schedule/gestation time

B) COMMERCIAL AND ECONOMIC APPRAISAL:

- Demand data
- Supply data
- Distribution
- Pricing, government policies and permission
- Competition
- Employment generation
- Promoters, manpower and soundness of the proposal
- Appraisal of management and management problem

C) FINANCIAL APPRAISAL:

- Capital cost of the project and means of financing
- Financial projection like profitability estimates, cash flow and sensitivity analysis
- Analysis of the working of sister concern, cash flow and working of the existing concerns for the last three years
- Analysis of various rations and break even point, IRR and NPV etc.

FEW SCHEMES BEING OPERATED

1. SINGLE WINDOW SCHEME :

a) Eligible Borrowers: Entrepreneurs setting up new projects in SSI/Tiny Sector as well as to existing units for modernization, technology-upgradation and socially viable sick units undertaking rehabilitation scheme.
b) Purpose: To provide both term loan for fixed assets and loan for working capital through some agency.
c) Norms: A total project outlay including total working capital requirement should not exceed Rs. 200.00 lac under the scheme.

2. MAHILA UDYAM NIDHI SCHEME:

a) Eligible Borrowers: Women entrepreneurs for setting up new projects in tiny/small scale sector and rehabilitation of viable sick units excluding transport operators.
b) Purpose : To meet th gap in the equity.
c) Norms: The capital cost of project including margin money for working capital not to exceed Rs. 10.00 lac. The soft loan limit is 25% of the cost of project subject to maximum of Rs. 2.5 lac per project. The soft loan will carry service charges @ 1% PA.

3. TRANSPORT INDUSTRY:

a) Eligible Borrowers: Small road transport operators.
b) Purposes: For purchase of truck/bus/auto rickshaw, mini bus for transportation of goods or passengers by road. Secondhand vehicles are not eligible for assistance.
c) Norms: The quantum of loan is need based (maximum 20 vehicles per operator including existing vehicles).

4. SCHEME OF TECHNOLOGY DEVELOPMENT & MODERNIZATION (TDM):

a) Eligibility Borrowers: Sole proprietorship, partnership, co-operative Societies, Private & Public Ltd. Companies.
b) Purpose: Assistance under the scheme would be available for meeting the expenditure on purchase of capital equipment, need based civil works and acquisition of additional land. Acquisition of technical know-how, designs, drawings and fashion forecast where relevant to specific product group. Upgradation of process technology and products with thrust on quality improvement comparable with acceptable domestic and international standards. Improvement in packaging. Cost of TOM and acquisition of ISO 9000 series certification. Need based additional incremental margin money for working capital.
c) Norms: Total project outlay not to exceed Rs. 100.00 lac preliminary and pre-operative expenses shall not be covered as part of the cost of project. The prevailing rate of interest is 13.50% with 0.5% Rebate on timely payments.

5. GENERAL LOAN SCHEME:

a) Eligible Borrowers: All forms of organizations in the small scale sector (i.e. proprietary, partnership, company, co-operative society etc). For infrastructure development-all forms of organizations such as public/(p) Ltd. Cos. partnerships, sole proprietary, municipalities.
b) Purpose: For setting up new small scale units or expansion, modernization, diversification, etc. of existing units and for all activities eligible for assistance under the scheme including professional practice/consultancy venture and service sector units such as tourism related activities/hospitals/nursing polyclinics/hotels/restaurants/marketing and industrial infrastructural projects.
c) Norms: The promoter shall require to invest minimum @ 40% of cost of new project and in case of expansion proposal, it may be reduced to 25% of the cost of expension scheme. The overall DER 1.5:1 be retained after implementation of the scheme. The Corporation normally insist for minimum collateral security to the extent of 50% of the proposed financial assistance.

6. SCHEME FOR TEXTILE INDUSTRY UNDER TECHNOLOGY UPGRADATION:
Eligible Borrowers:

Sole proprietorship, partnership, co-operative Societies, (P) & Public Ltd. Companies in the textile and cotton ginning and pressing industries, The textile industry comprises of the following activities:

Silk reeling and twisting.
Wool scouring and combing.
Synthetic filament yarn texturising, crimping and twisting
Spinning.
Viscose filament yarn (VFY).
Weaving, knitting including non-wovens, fabric embroidery and technical textiles.
Garment/made up manufacturing.
Processing of fibres, yarns, fabrics, garments and made-ups.

b)Purpose:
Assistance under the scheme would be available for meeting the expenditure on:

Purchase of capital equipment, need based civil works and acquisition of additional land.

Acquisition of technical know-how, designs, drawings and fashion forecase where relevant to specific product group.

Upgradation of process technology and products with thrust on qualify improvement comparable with acceptable domestic and international standards.
Improvement in packaging.

Cost of TQM and acquisition of ISO 9000 series certification.

Need based additional/incremental margin money for working capital.

c) Norms: To provide encouragement to textile industrial units (including units in the Cotton Ginning and processing sectors upgradation and to modernize their production facilities. Assistance is available for installation of specified types of machinery and for eligible activities in a new unit or in an existing unit by way of replacement of existing machinery and/or expansion. New units must set up their entire facilities only with the appropriate eligible technology. A unit can undertake one or more activities listed by GOI. However, multiple activities can be undertaken only in an integral manner i.e. by way of forward or backward integration. It is however, clarified that weaving/knitting and garment manufacturing or weaving/knitting and processing or garment manufacturing and processing will be considered and integral activities.

The scheme would be in operation from April 1, 1999 to March 31, 2012

The scheme envisaged interest incentive of 5% and/or cover for exchange rate fluctuation upto 5% p.a. on the loans availed by small scale units from primary lending institutions. Refinance is availed from SIDBI is not compulsory. However, where refinance is availed form SIDBI such proposals shall conform to norms and parameters stipulated by SIDBI, in addition to the guidelines prescribed by Govt. of India.
Details/amendments including the list of machinery are furnished in Technology Upgradation Fund Scheme booklet issued by GOI.

7. SCHEME FOR FINANCING COMMERCIAL COMPLEXES:

a) Objective: The objective of the scheme is to provide financial assistance for establishing Commercial Complexes, Showrooms, Sales, Outlets, Departmental Stores and Shopping Malls etc

b) Eligibility Criteria: Sole Proprietorship firms, Partnership concerns and Companies fulfilling the following conditions :-
(i) The land and building should be in the name of Sole Proprietor, Partners or Company.
(ii) Location of Commercial Complexes, Showroom etc should be within the approved area of the respective competent authority.
(iii) Assistance for renovation for the existing commercial complexes may also be considered under the scheme.
(iv) Proposal where land is on lease are not eligible.
(v) Minimum Promoter's contribution shall be 40%.
(vi) Minimum Collateral Security shall be 50%.

c) Terms of Assistance
(i) Interest Rate : As applicable in case of SSI units.
(ii) Repayment Period : The loan shall be repayable in 8 / 10 years including moratorium period of 12 months.

8. SCHEMES FOR FINANCING WARE HOUSES / PLINTHS:

a) Objective: This scheme is aimed at providing financial assistance for construction of Warehouses / Plinths for storage of food grains in the State.

b) Eligibility Criteria: Sole Proprietor / Partnership concerns fulfilling the following conditions :-
(i) The land is owned by promoter.
(ii) All those concerns, which propose to, built ware houses under Guaranteed Land Scheme of PSWC, PUNSUP, MARKFED, PAIC or any other Government Agency.
(iii) Promoter's contribution shall be 40%.
(iv) Collateral Security shall be 50% to 60% of the amount of term loan.

c) Terms of Assistance
(i) Interest Rate : As applicable in case of SSI units. (Subject to change)
(ii) Repayment Period
a) 8 - 10 years in case of godowns
b) 3 - 5 years fin case of plinths
c) The moratorium period will be 12 months or upto the date of receipt of first rent which ever is earlier.

9. SCHEMES FOR ASSISTANCE TO INFORMATION TECHNOLOGY AND SOFTWARE DEVELOPMENT SECTOR:

a) Objective: To fulfill financial requirements for the Information Technology and Software Development in the State.
b) Eligibility Criteria: All new Industrial units are eligible for assistance under the scheme from the corporation. However, preference will be given to the units established by persons with sufficient experience, expertise and exposure in software development.
c) Terms of Assistance
(i) Interest Rate : Rate of interest as applicable to General Term Lending Scheme.
(ii) Repayment Period : Repayment period not exceeding 5 years including the moratorium period of 12 months where the premises are owned by the promoter and six months in case of rented premises or premises on lease.

d) Promoter's Contribution: Promoter's contribution shall be 40%

POWERS TO SANCTION LOANS:

i) Loan proposal upto Rs. 1.00 crore Managing Director
ii)Loan proposal above Rs. 1.00 crore Executive Committee

DISBURSEMENT OF LOANS:
After the loan is sanctioned by the competent authority a letter of sanction is issued to the loanee concern. The letter of sanction contains the general terms and conditions which the concern is required to comply with before the disbursement of the loan.

OFFICES OF PFC
HEAD OFFICE : PUNJAB FINANCIAL CORPORATION,
95-98,BANK SQUARE, SECTOR 17-B
CHANDIGARH

PHONE: +091 - 172 - 2709295, 2709296, 2709298, 2707425, 2708405, 2708435
FAX: +091 -172 –2702664 - 2709297
Email: pfcchd@sify.com
Website: www.punjfincorp.nic.in