Single Window Scheme  

With an aim to extend financial assistance both for fixed assets as well as working capital to small units under its single window, UPFC provides long term easy loans to units which have a project cost upto Rs. 10 million (including margin money for working capital ).   

Schemes For Working Capital Term Loan  

UPFC is financing small and medium scale units with a good track record for their working capital requirements to the extent of Rs. 15 million.   

ELIGIBILITY CRITERIA  

• The Scheme is meant for all small scale and medium scale industrial units where net worth of the company /firm (excluding revaluation reserves) does not exceed Rs.10.00 Crores.  
• Units which are not financed by UPFC, should be in operation preferably for a minimum period of 3 years and should have earned profit in the last financial year.  
• Units, which have availed working capital from the banks, would also be eligible.  

• Maximum limit of Working Capital Term Loan to a Company shall be Rs.150.00 Lacs over and above the term loans sanctioned by UPFC, subject to a maximum exposure of Rs.240.00 Lacs. However, in case the borrower being firm (partnership or proprietorship) the maximum limit of Working Capital Terms Loan shall be Rs.90.00 Lacs subject to a maximum exposure of Rs.90.00 Lacs in a case.  
• Security Debt Ratio shall normally be kept at 1.5:1.  

• First charge by way of hypothecation of current assets such as raw material, finished goods, stores and spares to be acquired by the proposed Working Capital Term Loan. 
• Extension of Charge on fixed assets of the unit viz. Land, building and hypothecation of plant and machinery etc. ,or  
• First charge by way of mortgage of land and building and hypothecation of plant and machinery etc. ,or  
• First pari-passu charge on the fixed assets of the unit, it the assets are mortgaged to other Institution/Bank.  
• Collateral security to cover the Working Capital Term Loan in the shape of liquid security viz. NSC, FDR, quoted shares of Blue Chip Companies, Kisan Vikas Patra etc. or fixed assets in the form of Urban lands property viz. residential plot/house, commercial shops/plots shall be acceptable. Agricultural land or rural property will not be preferred as the marketability of the same is difficult.  

REPAYMENT PERIOD   
 
The loan shall be repayable in 5 years, inclusive of moratorium of 3 months, depending upon repayment capacity of the unit.  

SANCTIONING AUTHORITIES  
 
Internal Committee is the sanctioning authority for Working Capital Term Loan cases of all amounts.  

ANNUAL SERVICE CHARGES  
 
The borrower shall pay service charge @ 1% on the sanctioned amount of Working capital Term Loan.  

PROCESSING FEE  
 
The entrepreneurs shall be required to deposit processing fee as given below:  
 

Sr No.	Amount Of Financial Assistance Applied			Processing Fee
1.	Upto Rs.10 Lacs			Rs. 1,000 to Rs. 4,000
2.	Above Rs.10 to 30 Lacs			Rs.8,000
3.	Above Rs.30 to 60 Lacs			Rs.12,000
4.	Above Rs.60 to 90 Lacs			Rs.18,000
5.	Above Rs.90 Lacs			Rs.25,000

  
The upfront fee, is payable at the time of Ist disbursement. 
  
Equipment Lease Finance  Scheme (acquisition without own investment) 
   
UPFC provides lease assistance to acquire plant & machinery without any promoter's investment, to a concern which intends to expand, modernize or diversify its activities.   

ELIGIBILITY   

• Any Industrial concern, which has been in operation for the last three years and has earned net profit during the last two years and has not been in default.  
• Industrial concern should not be in default to any financial institution/banks.  
• New indigenous/imported equipment or second hand imported equipment.  

MODE OF PAYMENT 

• Monthly rental payable in advance with one month moratorium or  
• Monthly structuring of lease rentals according to users' need.  

CHARGES    

• Maximum Lease processing fee of Rs 2500/-, depending upon quantum of assistance.  
• Lease management fee of 1%.  

• 100% finance.  
• Quick financing with simple procedural formalities.  
• Lease rental allowed as tax deductible expenses.  
• Provision of balance sheet financing.  
• Flexible rental structuring according to user's need.  

In order to provide better and quick service to established entrepreneurs. IDBI / SIDBI have envisaged the equipment refinance scheme. Under this scheme, loan is provided to already existing and profit making units for the purchase of plant & machinery only and is sanctioned and disbursed without too many technical financial and legal formalities.   

The salient features of Equipment Refinance Scheme are detailed below:    

ELIGIBILITY   

• Assistance under the Scheme will be available to the existing industrial concerns eligible for refinance assistance from IDBI / SIDBI and which have a good past record of performance and sound financial position. The concern should have been in operation for at least 4 years, have earned profits and/or declared dividend on equity shares during preceding two financial years, and not in default to institution /banks in the payment of their dues.  
• Assistance under the Scheme may be availed for the purchase of identifiable items of plant and machinery and other equipment including energy saving systems for modernization / expansion / balancing /replacement or for any other purpose except for new project. Only actual users will be eligible for assistance. Only imported second hand machinery can be considered on case to case basis provided that capital goods should not be more than seven years old with a minimum residual life of five years. Purchase of indigenous second hand machinery would not be eligible.  

• Loan amount per proposal under the scheme: upto Rs.150.00 Lacs. 

• Total loan assistance per concern (existing outstanding plus proposed): subject to a ceiling of Rs.240.00 Lacs . 

• New Units - UPFC provides monetary assistance to new units for acquisition of fixed assets such as land, building, plant and machinery etc.   
• Existing Units - Easy assistance for upgrading and modernising units with an eye on giving a boost to production and increasing efficiency.   

Over the years UPFC has been assisting larger number of Doctors, Chartered Accountants. Architects and Cost Accountants to set-up their own professional enterprises.   

Scheme For Hotel And Tourism Sector   

With an aim of giving a fillip to the burgeoning tourism industry in Uttar Pradesh, UPFC provides easy financial aid for establishment of hotels, motels, restaurants, travelling agencies, amusement parks etc. Assistance is also within arm's reach for the expansion and refurnishing of existing facilities in the tourism sector.   

Scheme For Nursing Homes and Electro-Medical Equipment   

The UPFC cares not only for industry but also for health. With a view to provide modern medical care and diagnostic facilities, the UPFC provides financial assistance for setting-up small hospitals and nursing homes having 20 or more beds and/or for the purchase of the latest electro-medical equipment for diagnostic purposes.   

Scheme For Marketing Assistance 

UPFC provides financial assistance for setting-up new sales outlets/showrooms as well as for the renovation and expansion of existing sales outlets for marketing products of small/cottage and village industries. Under this scheme, the project cost should not exceed Rs. 2.5 million.   
  
Foreign Currency Loan Scheme  
  
This scheme is meant primarily for export oriented units who want to import capital goods to either diversify/expand /modernise or setup new unit to increase their competitiveness in global market at competitive interest rate. The maximum limit shall be rupee equivalent of Rs. 240 lakhs and interest rate shall be 7% above libor 06 months. The borrower has to make the repayment of loan in foreign currency. Foreign Currency Loan shall be restricted to foreign currency requirement for importing plant and machinery. Other operational parameters are simllar to normal FATL scheme except as mentioned above.  

The assistance under this scheme is meant for units having good track record for improving marketability of their products by undertaking activities such as market research, advertising, creating or enhancing the value of brand, providing audio/video for electronic media, participation in trade fair and setting up distribution network etc.  

The maximum loan amount per borrower shall be Rs.20.00 lacs and minimum Rs.5.00 lacs. The assistance rendered under this scheme shall be usually 05 to 10% of turnover of the unit and disbursement may be made in three strokes depending upon requirement of funds.  

SECURITY   

• Extention of charge over existing assets.  
• Collateral security of 150% of loan if existing security is not sufficient.  
• Exclusive charge on assets acquired under scheme.  

PERIOD OF TERM LOAN  
 
3 to 4 years with gestation period of 06 months.  

This scheme is meant for meeting short term funds requirement of existing borrowers, having good track record of profit and repayment, like working capital requirement to execute large work orders within short time, to meet temporary working capital shortage, development /expansion of new markets/products, margin money for opening of LC till the sanction and release of funds from financial institutions for capital goods or for imported raw material etc.  

ELIGIBILITY   
 
The borrower should be engaged in manufacturing activity, have been in operation for more than 3 years and also be in profit during the last two years after providing depreciation and interest.The borrower should not be in default on payment of dues of the Corporation, bank or any other financial institutions. The borrower shall also have to submit certificate from a Chartered Accountant indicating therein that it is not in default to any financial institution/bank as on that date. Leasing and finance companies shall be outside the purview of scheme.  
   
AMOUNT OF ASSISTANCE  
 
The amount of assistance shall be minimum of Rs. 10.00 lacs and a maximum of 60.00 lacs.  

SECURITY 

• Personal guarantee of the partners / directors.  
• Loan Agreement with the Corporation alongwith Demand Promissory Note.  
• Post dated cheques for interest as well as principal repayment.  
• The loan shall be secured either by extension of charge on existing assets mortgaged with the Corporation or by way of collateral security to entire satisfaction of the Corporation. Minimum security cover of 150% shall have to be maintained in each case. Valuation of the collateral security shall be done by the Corporation as per its norms.  

ELIGIBILITY  
 

• Any Industrial concerns, which have been in operation for the last three years and have earned net profit during the last two years. 
• Industrial concern should not be in default to any financial institutions/bank.  
• New indigenous /imported equipment or second hand imported equipment.  
• Concerns engaged in activity like nursing home, restaurants etc.  
• Office equipment like Xerox, Fax, Computer etc. for professionals.  
• Commercial transport vehicle operators having business for at least 3 years and with positive net worth.  

MODE OF PAYMENT  
 
Monthly instalments payable in advance with one to 6 months moratorium.  

LIMIT OF ACCOMODATION  
 
Besides the existing limit of term loan, maximum assistance upto Rs.240 lacs can be extended.  

RATE OF INTEREST 
 
Varies from 9.5% to 11% per annum (flat)  

CHARGES 

• Maximum Hire Purchase processing fees of Rs.35,000/- depending upon quantum of assistance.  
• Hire Purchase management fees of 1%.  

• 90% finance.  
• Quick financing with simple procedural formalities.  
• Depreciation benefit available to concern  

The borrower concerns will pay present rate of interest, which varies from 16.0 % to 17.0 % per annum including interest tax on the loan amount, on a quarterly basis. Rate of higher interest in case of defaulted amount and for period of default will be kept at 2.5%. However above interest rate is subject to revision from time to time.   
 
INTEREST RATE [including interest tax] 
   

Sr No	SCHEME	PROPOSED (W.E.F. 1/4/99)
1	TERM LOAN	15.5% TO 16.5% FOR SSI AND 16.5% TO 17.5% FOR NON SSI
2	EQUIPMENT REFINANCE	16.0% FOR SSI AND 17% FOR NON SSI
3	EQUIPMENT FINANCE SCHEME (EFS)    EQUIPMENT CREDIT SCHEME	16.5% FOR SSI AND 17.55 FOR NON SSI
4	SHORT TERM LOAN SCHEME [STL]	19.0% FOR ALL
5	WORKING CAPITAL TERM LOAN [WCTL]	17.0% TO 18.0% FOR SSI AND 18.0% TO 19% FOR NON SSI
6	SUPPORTING MARKETING STRUCTURE IN INDUSTRIAL DEVELOPMENT AUTHORITIES AND PRE DOMINATING INDUSTRIAL AREA	18%
7	PENAL INTEREST	2.5%
8	TERMINAL INTEREST REBATE BENEFIT	Rebate @1% per annum to all the entreprenures to remain regular in payment throughout the currency of loan.

  
LIMIT OF ACCOMODATION   

1. Up to Rs.90.00 lac for Sole Proprietorship and Partnership Concern   

2. Up to Rs. 150.00 lac for Private/Public Limited Company   

[Loans up to Rs.240.00 lacs can be sanctioned with prior approval of IDBI]   

SECURITY   

Like Other Financial Corporations, UPFC stipulates security clause depending on risk perception on case to case basis. Indicative guidelines are given in successive pages.   
  
PROCESSING FEE & SERVICE EXPENSES    

Processing Fee    
The borrower is required to deposit processing fee as given below:   
   

Sr No	Amount of Financial Assistance Applied	Processing fee
1	Up to Rs. 10 Lacs	1000 to 4000
2	Above Rs. 10 to 30 Lacs	8000
3	Above 30 to 60 Lacs	12000
4	About Rs 60 to 90 Lacs	18000
5	About Rs 90 Lacs	25000

   
UPFRONT FEE   
 
The Upfront fee @ 1% of ERS Loan amount along with interest tax applicable shall be payable by the borrower on or before disbursement   

SANCTIONING AUTHORITY   
 
Internal Committee is the sanctioning authority for all amounts of loans.   

PERIOD OF REPAYMENT    
 
The loan shall be repayable between 2 to 5 years inclusive of moratorium of six months, depending upon repayment capacity of the unit.   

SECURITY    
 
Loans granted under the scheme shall be secured by Ist charge by way of hypothecation of capital goods/equipments financed, alongwith Ist charge or subsequent charge on the other fixed assets of the concern wherever possible.   

HOW TO APPLY    
 
The entrepreneurs are required to apply for loan on the prescribed application form along with the Project Report. Simplified application forms are available at UPFC regional offices as well as at head office.   

Factoring is a financial service designed to help firms to arrange their receivables better. Under a typical factoring arrangement a factor collects the accounts on due dates, effects payments to the firm on these dates and also assumes the credit risks associated with the collection of the accounts.   

Sometimes the factor provides an advance against the values of receivables taken over by it. In such cases factoring serves as a source of short-term finance for the firm.    

In order to provide a gamut of financial services under one roof, the Corporation has also started factoring services. Under the scheme Corporation shall be at the time being only providing advances or prepayments against receivables and other services provided by the factor such as debt collection and administration of sales ledger etc. shall be taken later on.   

Under the Scheme receivables arising out of domestic trade only shall be considered for factoring. Supplier/Borrower shall draw bills of exchange for goods supplied and the purchaser shall accept that. After acceptance of bills of exchange, Corporation shall make prepayment of 80% of invoice value after deducting its discount charges @ 17% to 18% p.a. for period of bill of exchange to supplier. Balance payment of 20% of the invoice value shall be made after collecting the payment from purchaser. If purchaser fails to pay the due amount on due dates, the supplier shall make the payment. Borrower/ Supplier shall submit Bill of Exchange alongwith invoice LR/RR receipts. Suppliers to be eligible for factoring must have minimum track record of 3 years with consistent profitability and minimum net worth of Rs. 25.00 lacs.   

Usually before providing advance payments to supplier an agreement is entered with supplier for arising debts of purchaser to Corporation and Corporation makeS advances only against invoices drawn to this particular purchaser. Sub-limit of each purchaser is fixed and sum of these sub limits is over all limit of supplier. Usually purchaser should have been dealing with supplier for minimum period of two years. Maximum limit of each purchaser should not exceed Rs. 25.00 lacs at a time.   

Usually limit for factoring is calculated on the basis of the projected receivables on credit sales of the company and deducting existing bills/books debts limits enjoyed by the company from bank. Maximum limit shall not exceed two months average turnover of the supplier as per last audited balance sheet or projected turnover of current year subject to maximum of Rs. 100.00 lacs 3 to 4 years with gestation period of 06 months.   
  
MERCHANT BANKING & FINANCIAL SERCIVES 
 
Decades ago UPFC has taken a humble step for the industrial development of U.P. by providing term loan assistance to small & medium scale units. Since then it has acquired a matured professional approach in industrial financing. Several small-scale units nurtured by UPFC have grown into big enterprises.  

In order to meet the challenges of liberalized policy of the Government & changed economic scenario, UPFC has started Merchant Banking & other financial services to serve its valued clients. UPFC, a category-I Merchant Banker with unmatched expertise in project appraisal and term lending offers a whole gamut of Merchant Banking Services.  

• Issue Management: UPFC provides expert services to manage public issues of the companies successfully. It has already managed Public Issues as a lead Manager with great success.
• Underwriting: In order to provide a protective umbrella to the public issues of its clients, UPFC also underwrites the issues.
• Subscription to Equity Share: UPFC subscribes to the equity shares reserved under FI quota, to enable the company to market the public issue effectively.
• Advisory services: UPFC, with its long experience, advises its clients for various advisory services such as Capital Structuring, Loan Syndication etc.
• Project Certification: UPFC also certifies the projects going to capital markets for raising funds. This is a specialized activity of the Corporation.
• Other Financial Services: As a part of its commitment to provide professionalised financial services to its clients, UPFC also offers Bill Discounting, Equipment Leasing & Hire Purchase Services, Short- Term Loan, Brand Equity loan, etc to meet diversified requirements of its clients.

Corporation will charge service charges / commission @, 0.05% of the amount of FLCs subject to minimum of Rs. 20,000/- per FLC for 90 days from borrower and an additional service charge / commission @ 0.25% for every quarter or part thereof will be charged from the borrower beyond 90 days.   

DEFERRED PAYMENT GUARANTEE   
 
 It is a non-fund-based activity. Here the Corporation guarantees the payment of amount to be paid by the customers for purchase of capital goods within India, which has been spread over or deferred over a period of time. Here the supplier selected should be reputed and he should be agreeable to supply the capital goods on deferred payment basis.   

The maximum amount of guarantee should be Rs. 20 million and the maximum period should be 5 years. The guarantee commission @ 2% per annum is to be charged on reduced liability basis and the same may be charged upfront for the entire period.   

LINE OF CREDIT FOR CAPITAL GOODS   
 
This scheme helps the entrepreneurs who have good track records and are in pressing need of funds to acquire capital goods as a part of their expansion/ diversification/ modernisation plans. It helps them to implement their project timely as the funds would be available readily.   

The borrower should be engaged in manufacturing activity, should be in operation for more than 04 years and how annual profit during last year after providing depreciation and interest. He must have paid atleast 40% of the earlier loan availed from the Corporation, He should also not have defaulted in paying dues to the Corporation, bank or to any other financial institution.   

Under this scheme a maximum of Rs. 2.5 million (included within overall limit of Rs. 24 million)can be sanctioned in favour of borrower.   
  
Debt Equity Ratio   

1:1 to 3:1 depending upon the quantum of loan, nature of industry and nature of scheme.