1. Research & Development Finance for Export Oriented Units:-
Objectives under these schemes are to encourage Indian exporters to invest more in their research & development (R&D) and spend to develop new products and processes that will enhance export capabilities. With the need to bridge the funding gap of Indian exporters in the research space at our core, we have a dedicated R&D Financing Programme.
Under this programme, financing can be extended to any export oriented company. Alternatively, a Special Purpose Vehicle (SPV) promoted by the company can be created irrespective of the nature of the industry.
Eligibility:-
- Export oriented firms with exports (actual or projected) of at least 20% of annual turnover.
- R&D finance is generally extended up to 7 years. However, longer tenors with suitable interest rates are considered on a case-to-case basis. A company can opt for our structured repayment option to match its cash flow.
- Upto 80% of the total project cost can be funded.
- Security to include, appropriate charge on the assets, Corporate Guarantee, charge/assignment on the regulatory approval/IPR, personal guarantee etc.
2. Pre-Shipment / Post-Shipment Credit Programme: -
Primary obstacle for Indian exporters is the lack of a dependable source of financing. Main Object is to bridge this gap by extending export credit to Indian exporters to meet a wide range of their trade financing requirements.
They provide working capital finance by way of pre-shipment credit and post-shipment credit. They also extend non-fund based limits including issuance of Letters of Credit (both foreign & inland) and Bank Guarantees (both foreign & inland) as part of our export credit assistance to clients.
The credit limits are generally operated as a running account facility. The facilities can be drawn in either Indian Rupee or Foreign Currency.
Eligibility:-
- Indian exporters with a proven track record.
- The limit should be within the maximum permissible banking finance (MPBF) of Borrower's assessed bank finance.
- Margin of around 15%-20% under pre-shipment and around 10% under post-shipment.
- Adequate security to be provided. Typical security includes appropriate charge on the current assets including export receivables, Export Credit Guarantee Corporation (ECGC) cover, etc.
3. Lending Programme for Export Oriented Units:-
In order to enhance international competitiveness and the capabilities of export-oriented Indian companies, Exim Bank provide term loans to finance various capital expenditures including certain soft expenditures of such companies.
Loans or guarantees are extended for the expansion, modernization, upgradation or diversification projects. This includes acquisition of equipment, technology export marketing, export product development and setting up of Software Technology Parks.
4. Import Finance Programme:-
They offer a comprehensive range of products and services covering financial needs of borrower companies at all stages of business cycle to enhance the competitiveness of Indian companies.
The Companies involved in manufacturing/services, having only domestic operation and no exports, are eligible for financing from Exim Bank for import of equipment/machineries for domestic projects.
Financing is done towards bulk import of machineries, services for capacity expansion, modernization and infrastructure projects.
5. Production Equipment Finance Programme:-
Extension of credit to eligible export oriented enterprises to enhance the export capability creation through financing non-project related equipment procurement.
We offer loan for acquisition of plant and machinery, purchase of ancillary equipment including equipment for packaging, pollution control, utilities, quality assurance etc. The loans are flexible and can be extended for equipment procurement for balancing, replacement, modernization and capacity up-gradation.
Eligibility:-
- Companies with a minimum export orientation (actual/projected) of 10% of their annual turnover, or exports of ₹5 crore p.a., whichever is lower (inclusive of exports through Export/Trading Houses).
- Available in Indian Rupees and in foreign currency (as per extent RBI guidelines). Commercial interest rates are charged on the term finance.
- The tenor range is usually 7-10 years with a suitable moratorium, and repayments in suitable monthly / quarterly instalments.
- Promoter margin is a minimum 20% and appropriate charge on the fixed assets of the company/project plus any other acceptable security including personal guarantees may be stipulated.
This article has been written by CS Tanuj Chandra Saxenaa (ACS, M.COM, MBA (FINANCE), CFI (FMVA) (Pursuing) SAP FICO Certified. He is a Practicing Company Secretary and Trademark Agent in Tanuj Saxena & Associates in Lucknow, Uttar Pradesh.