Finance assistance to small business

by Madugundu Krishna    July 21, 2012

 Under the small business finance, the following assistance is available.

A)    Traders – working capital up to rupees 65000 is going as advance to retailers in grains, spices, pulses, soaps, etc. with turnover of not more than rupees four lakh, for keeping the stocks in a store room or on display.

B)    Business enterprises – bank grants facilities for working capital requirements and cost of equipments to individual of firm owning and managing a business established for providing services like restaurants, book binders, stamp vendors, etc. up to rupees 65000. But their investment in equipment, present and future, should not exceed rupees two lakh.  

Medium term loan

Medium term loans for buying land, building, against equitable /registered mortgage of properties and movable machinery or equipment are granted by banks. Such loans are repayable in installments in 3 to 7 years.

Letters of credit

Letters of credit are issued by the bank on behalf of its clients in favor of their suppliers. This is sort of guarantee by the bank that payment will be made to the suppliers if conditions of sale are satisfied.

Assistances to professionals and self-employed persons

Professionals like doctors, engineers, architects, journalists, contractors and those trained in arts or crafts, having degree/ diploma from recognized institutions are given finance for working capital or to buy equipment required for their profession.   

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