Objective. The objective of the Scheme is to assist Startups in all stages of their growth starting from proof of concept, prototype development, product trials, market entry, commercialization, scaling up, etc. Further, they would need financing purchase orders, Venture Debt, etc. These facilities would enable the Startups to graduate stage wise.
Eligibility Criteria. The Startup shall meet all the following eligibility criteria for getting assistance under the scheme:
(a)Productization:
(b)Commercialization:
(c) Scaling up:
Eligible Activities. All Manufacturing/ Service sector/ IT/ ITES activities.
Purpose of Assistance. The assistance will be to set up the workshop, purchase necessary machinery, computers, servers, software, setting up infrastructure, purchase raw materials, working funds (like rent/ electricity/ salary), working capital, cloud expenses, licenses, permits, consultancy charges, marketing expenses, preliminary & preoperative expenses, interest during the implementation period, etc.
Nature of Facilities. Term Loan/ Working Capital/ Composite loan.
Term loan shall be for setting up the workshop, purchase machinery, computers, servers, software, setting up infrastructure, cloud expenses, one-time license fees, initial permits, consultancy charges, one-time marketing expenses, preliminary & preoperative expenses, interest during the implementation period, etc.
The working capital loan shall be used for paying salaries, rent, electricity, other expenses needed for the day to day running of the project, marketing expenses, other recurring expenses, etc.
Upper Loan Limit. The maximum assistance for each stage will be as follows:
Subject to 90% of the project cost in each stage.
The loan will be considered for each stage separately.
Rate of Interest. Loans shall be covered as per the interest rates applicable to CMEDP. However, other terms and conditions will be as per this Scheme.
Mode of Repayment. Term Loan: Maximum repayment period shall be 60 months including moratorium period of maximum 12 months.
Working Capital: Working Capital shall be sanctioned as a WCTL repayable in a maximum of 60 installments including 12 months moratorium.
Mode of Application, Selection and Sanction. Startups shall apply online at www.kfc.org. KFC shall do necessary screening on the application. KFC shall take the assistance of experts having domain knowledge to process the Startup loan applications. The sanction will be considered by an Expert Committee
Additional Funding. In pursuance of Government of Kerala order GO (MS) No. 79/2020/Fin dated 28.07.2020, the Corporation vide Circular No. KFC/CIR 28/CR 14/2020-21 dated 07.08.2020 have formulated three loan schemes for Startups as follows:
The schemes are operational now. Considering the experience gained in running the scheme, the operational parameters are refined to the requirements of the Startups and the modified scheme is provided as Appendix ‘A’.
The rate of interest of all the above schemes shall continue to be 9% pa. KSUM shall provide 2% pa interest subvention so as to make the effective interest rate at 7% per annum. The interest subvention will be credited in the loan account as and when received from KSUM. 0.60% additional interest (Corpus fee) will be charged for all loans under all schemes for coverage under ‘Startup Guarantee Funds’.
Appendix ‘A’.
Executing Purchase Orders
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Name of Scheme |
Scheme for Financing Working Capital Requirements of Startups for Executing Purchase/ Work Orders |
|
Additional Eligibility conditions |
The applicant Entity should have firm Purchase Orders (The Purchase Order includes Work Orders/ Letter of Intent/ Letter of Award/ Letter of Agreement which are equivalent to Purchase Orders). |
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Upper Loan Limit (LoC) |
Category ‘A’ Entities as defined in Credit Policy of KFC (like Public/ Private Limited Companies) - Rs.1000 lakh The assistance will be sanctioned as a Line of Credit (LoC) depending on the Purchase Order in hand and prospects of getting new Purchase Orders. |
|
Validity LoC |
The Line of Credit is valid for a period of two years from the date of sanction (with rollover facility). The project officer shall do annual renewal of the limit in the Software, if the repayment is good, works are progressing satisfactory and analysis of financial statements & tax returns indicate satisfactory levels. The LoC can be re-sanctioned as a fresh LoC after two years based on the past performance and repayment history of the entity. Multiple LOCs cannot be sanctioned to an entity. Existing LOC can be either enhanced or reduced. If the Corporation feels that it is prudent to get the loans repaid at any time/ not to re-sanction the Line of Credit or if the entity is not interested in re-sanction of the Line of Credit, they have to be provided with a schedule for repayment according to the expected repayment of each Purchase Order. No further facility should be provided in such cases. |
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Upper Limit for Disbursement for Each Purchase Order |
The maximum amount that can be disbursed for execution of a Purchase Order shall be limited to the expense required for its execution and shall not exceed 80% of the value of the Purchase Order. Loans for each purchase order will be treated as a separate facility (Purchase Order Facility) under the LoC. |
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Mode of Repayment |
|
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Charges/ Fees |
Processing fees: 0.20% of the sanctioned amount without upper cap, subject to a minimum of Rs.10000/- plus GST. |
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Name of scheme |
Scheme for Funding Venture Debt for IT Hardware & Software Enterprises |
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Additional Eligibility conditions |
The applicant entity has undergone due diligence by a SEBI Registered Venture Capital Fund / SEBI Registered Alternative Investment Fund and they have already invested or they have confirmed the amount to be invested and the mode of the same. |
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Eligible Activities |
IT Enterprises engaged in both hardware and software products. |
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Eligible Purpose |
To meet the requirement of the applicant for manpower, materials, marketing, etc. |
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Upper Loan Limit |
Category ‘A’ Entities as defined in Credit Policy of KFC (like Public/ Private Limited Companies) - Rs.1000 lakh |
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Promoters’ Contribution |
20% of the Project Cost |
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Mode of Repayment |
The maximum moratorium period allowable is two years and the maximum repayment period allowable, including the moratorium period, shall not exceed five years. |
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Charges/ Fees |
As per the Circular on other income. |
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Name of Scheme |
Seed Loan Assistance to Startups for developing socially relevant products prescribed by UNO and required by Government departments |
|
Additional Eligibility conditions |
|
|
Eligible Activities |
All Manufacturing/ Service sector activities |
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Upper Loan Limit |
Maximum amount per Startup is limited to Rs.100 lakh. The amount of loan shall not exceed 50% of the surplus expected to be generated by Startups from the product in 3 years or 10% of the total proceeds in 3 years from the product whichever is lower. |
|
Promoters Contribution |
20% of the Project Cost |
|
Mode of Repayment |
There will be maximum of one year repayment moratorium for the loan. The loan along with applicable interest needs to be repaid within 36 months after the moratorium period |
|
Charges/ Fees |
As per the Circular on other income. |
