Bank of India Business Loans

Types of Bank of India Business Loans

Star MSME GST Plus Scheme	The scheme provides financing to meet the working capital requirement for traders, services, and manufacturing businesses. The working capital can be fund-based or non-fund based. The loan amount can range from Rs.10 lakh up to Rs.500 lakh with a 25% stock and 40% book debt. It requires stocks and book debts as security and a minimum of 65% collateral.
Star SME Education Plus	The purpose of this scheme is to finance the construction, repair, and renovation of buildings and the purchase of furniture, fixtures, and computers for your office. The scheme is dedicated to educational institutions, such as schools, colleges, and universities. The available loan amount is from Rs.10 lakh up to Rs.500 lakh with a margin of 20%.
BOI Star Doctors Plus	The scheme is designed for individuals and companies to provide medical, pathological, diagnostic, and other healthcare services where qualified medical practitioners hold a minimum of 51% share. Financing can be availed to set up a clinic, nursing home, or a pathology lab, to expand it with new equipment, or to modernise it. A loan of up to Rs.100 lakh can be got at a margin of 15%-25%.
Star SME Contractor Line of Credit	The scheme targets civil and mining engineers and transport contractors who require working capital in the form of cash credit, non-fund based facility, letter of credit and bank guarantee. The loan amount can range from Rs.10 lakh up to Rs.500 lakh. The margin for this scheme can be 20% for fund based option and 15% cash margin for non-fund based option. Collateral equal to 1.5 times the loan amount must be maintained.
Star SME Liquid Plus	Entrepreneurs engaged in business for a minimum of three years having audited financials can benefit from this scheme. The loan amount must be utilised for purchasing machinery, equipment, and preliminary expenses for R&D, advertising, and marketing activities. This term loan provides financing from Rs.10 lakh up to Rs.500 lakh.
Star Laghu Udyami Samekit Loan	Micro and small enterprises looking for investment and working capital can avail of a loan under this scheme. For rural firms, the loan amount can be up to Rs.5 lakh, semi-urban firms can get up to Rs.10 lakh, urban firms up to Rs.50 lakh, and firms in metro cities up to Rs.100 lakh at a margin of 15%.
Star Channel Credit	Vendors, suppliers, dealers, distributors, and corporate firms can use invoice discounting schemes with a nil margin at competitive interest rates. There is also the option of availing channel financing over and above the working capital finance facility. A maximum of 20% of the estimated annual supplies can be arranged through this scheme.
Star MSME E-Rickshaw	Individuals, proprietorship firms, or partnership firms engaged in the transport business having an e-rickshaw permit can benefit from this scheme to purchase a new e-rickshaw and/or for battery replacement. A maximum of Rs.5 lakh can be availed at a margin of 15%-20%.
Star Weaver MUDRA Scheme	Weavers can get assistance to meet their credit emergencies, investment needs and working capital. The scheme is available both in rural and urban areas. Comprehensive financing of up to Rs.5 lakh is offered with a 3-5 years repayment tenure.
Star Start Up Scheme	The scheme is dedicated to startups to receive financing for innovation, development, deployment, and commercialisation of products/processes/services. It offers term loans, working capital loans, and non-fund based composite loans from Rs.0.10 crore up to Rs.5 crore.
Trade Receivables E-Discounting System (TReDS)	Get financing based on trade receivables of MSMEs through a standardised process.
Star SME Auto Express	Existing SME units can avail of a loan under this scheme to purchase transport vehicles that will be used to deliver products/services. Only new vehicles are permitted to be purchased. The margin here is 20% of the on-road price of the vehicle.
Small Road Transport Operator (SRTO)	This scheme helps individuals and firms to purchase commercial vehicles, earthmoving equipment, and excavators at a minimum margin of 15% on the on-road cost of equipment/vehicle.
Technology Upgradation Fund Scheme	The Amended Technology Upgradation Fund Scheme (ATUFS) objective is to promote the ease of doing business, generate employment, and promote exports through the Make in India campaign. The scheme will be active until 31 March 2022 and provide a one-time capital subsidy for investments, especially for the textile and jute industries.
BOI Star Vyapar	The service sector and traders can avail financing for working capital requirements under the scheme. The loan amount can be utilised for stock and book debts. Cash credit can be availed up to Rs.1,000 lakhs.
Star Asset Backed Loan (BSABL)	MSMEs are looking for loan facilities for manufacturing and services, i.e., purchasing equipment, machinery, furniture, fixtures, vehicles, and others. The loan amount can range from Rs.50 lakh to Rs.1,000 lakh.

Interest Rates

The base rate for business loans is at 9.7% p.a. with effect from 5 October 2015. Tenor Premium will be added to this rate for all term loans exceeding Rs.10 lakh with a repayment period above one year.

The interest rate will be according to the limit proposed and credit rating assigned as per the model given below:

Limits	Rating Model in Force
Rs.1 lakh up to Rs.10 lakh	No Rating
Rs.10 lakh up to Rs.5 crore	SBS
Rs.5 crore up to Rs.30 crore	MS
Rs.30 crore and above	HLC

Features and Benefits

• Different loan schemes are available for different occupations and purposes.
• Financing is offered up to a loan quantum of Rs.1,000 lakh based on various criteria and scheme chosen.
• A loan repayment tenure of up to 7 years is available according to the scheme.
• Collateral may or may not be required subject to the loan scheme.
• The loan amount can be used to purchase equipment and vehicles, modernise the workspace as working capital, expand the business, and serve many other purposes.
• Most loans can be thought of as a term loan.
• Get attractive interest rates on the financing.
• Certain government-approved loans come with subsidies and other benefits.
• The rates and terms applicable to rural applicants vary from that of the urban applicants making it easier for the rural ones to access funds.

Eligibility Criteria

• For the Star MSME GST Plus scheme, units engaged in trading/manufacturing activities having GSTIN are considered eligible. The account rating should have an entry-level investment grade.
• For the Star MSME Education Plus scheme, the applicant must be approved by educational institutions, i.e. schools, colleges, and universities, with the last 3 years’ audited financials and record of profit-making for at least two straight years.
• For BOI Star Doctor Plus, the professionally qualified persons must be in the age group of 25 to 60 years.
• In the case of Star SME Contractor Credit Line, established contractors engaged in business for the last three years having Audited Financials and entry-level rating SBS 5 are eligible for the loan.
• Enterprises making a profit for the last two years with an entry-level rating of SBS 5 are eligible for financing under the Star SME Liquid Plus scheme.
• All micro and small enterprises are eligible for loan under the Star Laghu Udyami Samekit Loan.
• Star Channel Credit can be availed by Sponsor Corporate (the bank’s existing customer) or Corporates with External rating A.
• Individuals, proprietorship firms, or partnership firms engaged in the transport business having an e-rickshaw permit can avail of the loan under the Star MSME e-Rickshaw Finance scheme.
• Any startup defined as per the bank policy is eligible to loan under the Star Start Up scheme.
• Existing accounts with a satisfactory conduct and net worth with entry-level ratings can apply for Star SME Auto Express.
• To qualify for the BOI Star Vyapar scheme, you must have satisfactory business experience for the last two years with respective financial statements.
• MSMEs comply with GST registration being operational for a minimum of three years and those units that have earned a profit for a minimum of two preceding years.

Documents Required

• GSTN registration proof
• XML file of the Income Tax Returns filed
• Last six months’ bank account statements in PDF format
• Personal, educational, and ownership details of directors and owners of the business
• A letter from all the directors/owners stating their consent for the loan

Any other documents and proofs as requested by the bank on a case-by-case basis.

Fees and Charges

Processing Fees

Loan Amount	Charges in Rural and Semi-Urban Branches	Charges on Urban and Metro Branches
Up to Rs.1 lakh	Nil	Nil
Rs.1 lakh and above	Rs.250 per lakh; Maximum of Rs.12.5 lakh	Rs.300 per lakh; Maximum of Rs.20 lakh

Documentation Charges

Loan Amount	Maximum Documentation Charges
Up to Rs.1 lakh	Nil
Rs.1 lakh up to Rs.5 lakh	Rs.1,000
Rs.5 lakh up to Rs.10 lakh	Rs.2,000
Rs.10 lakh up to Rs.25 lakh	Rs.3,000
Rs.25 lakh up to Rs.100 lakh	Rs.5,000
Rs.100 lakh up to Rs.500 lakh	Rs.10,000
Rs.500 lakh up to Rs.1,000 lakh	Rs.20,000
Rs.1,000 lakh and above	Rs.30,000

Frequently Asked Questions

What interest subsidy can I expect from the government for weavers?

Under the Star Weaver MUDRA scheme, the government provides an interest subsidy, i.e. the loan is provided at the interest rate of 6% to the handloom sector. The maximum interest rate subsidy will be capped at 7%, and this subsidy will be offered for a maximum of three years from the date of the first disbursement. The interest subsidy will be credited to the borrower’s account every month.

How does TReDS work?

TReDS is an online way of financing trade receivables of MSMEs through multiple financiers. This mechanism enables the discounting of MSME invoices raised against large corporate clients to reduce the working capital needs. 

Sellers deliver goods on credit, issue invoices and upload the invoices on TReDS. On the other hand, buyers log into TReDS and agree that the invoices are accepted. Upon accepting, TReDS will send this information to the buyer’s bank as their TReDS account is linked to their bank account. 

Sellers have the option to bid as quoted by the financier. The funds are credited to the seller’s account on a T+1 day basis. On the due date, the financier will raise a payment request to the buyer. Non-payment, in this case, will be considered as a default.

Do I get a moratorium facility on my business loan?

You may get a moratorium on specific loan schemes. For example, a moratorium of 3 months is offered on the SRTO scheme during the monsoon.