Union Bank of India Business Loans

Union Bank of India is now an amalgamation of Andhra Bank and Corporation Bank. The bank serves retail, MSME, corporate, and international customers through a wide range of products and services. The products and services include accounts and deposits, loans, wealth management products, government schemes, lockers, and more. The bank also welcomes NRI customers.

Focusing on the MSME sector, here is everything you need to know about Union Bank of India’s loan schemes, interest rates, eligibility, documents required, and more.

Loan Types	Cluster Specific Schemes Union Parivahan Union Nari Shakti Union Professional Union Turnover Plus Union Ayushman Plus Union Start up Union MSME Suvidha Union GST Gain Union Progress Union Liqui Property Union Rent Union e-Way Bills Solution Union Standby Line of Credit Union General Credit Card Union Residential Real Estate Inventory Support Union Guaranteed Emergency Credit Line: 1.0 & 2.0 Prime Minister SVANidhi Union Credit Guarantee scheme for sub-ordinate debt.
Interest Rates	Based on EBLR; 9.55% p.a. onwards
Loan Amount	Up to Rs.200 crore
Loan Tenure	Up to 10 years

Types of Union Bank of India Business Loans

Cluster Specific Schemes	The bank offers several loan schemes that are specific to certain regions of the country. For example, financing to sugar mills in Kohlapur, Nagpur, Nasik, and Pune regions and financing to the hotel industry in Dehradun, Chandigarh, and Jaipur regions.
Union Parivahan	The scheme finances transport operators to purchase new vehicles. The loan amount can go up to Rs.500 lakh. The repayment tenure can go up to 60 months, including the moratorium period.
Union Nari Shakti	Women-owned and managed MSMEs can avail financing under the scheme to meet working capital requirements or a term loan for purchase/construction/renovation of factories/offices/shops. The loan amount can range from Rs.2 lakh to Rs.200 lakh.
Union Stand-Up India	The scheme promotes entrepreneurship among SC/STs and women entrepreneurs. The loan quantum can be between Rs.10 lakh and Rs.100 lakh.
Union Professional	A loan under this scheme can be availed for various purposes, such as acquiring office space for self-occupation, for purchase of ready built office premises, for purchase of land/plot for the construction of office premises, to purchase office furniture and fixtures, or for repair/renovation of office space. The loan amount differs based on the location of the office ranging from Rs.10 lakh up to Rs.5 crore.
Union Turnover Plus	The scheme offers financing to meet MSMEs’ working capital requirement in manufacturing, service, and trading activities. The loan amount can go up to Rs.5 crore.
Union Ayushman Plus	Get financing to purchase new electro medical, diagnostic, x-ray machines, MRI, and other medical equipment, acquiring space to set up a clinic/hospital, purchase an ambulance, and others.
Union Start up	The scheme finances innovation, development and improvement of products/processes/services if the business model can generate employment and wealth as per the Start-up India scheme launched by the government. The loan amount can range from Rs.0.10 crore up to Rs.5 crore.
Union MSME Suvidha	Loans are offered to meet the working capital requirement and term loan for own business use in the manufacturing, services, and trading sectors. The working capital loan can either be fund-based or non-fund based.
Union GST Gain	Get working capital loans up to Rs.200 lakh under this scheme. The bank will assess your turnover based on GSTR-1 returns filed by the borrower. An on-demand repayment structure is followed for this scheme.
Union Progress	Micro and small enterprises can meet business needs, such as purchase/construction of business/office premises and the purchase of machinery, equipment, vehicles, and other fixed assets that can be financed under this scheme. The financing can go up to Rs.2 crore.
Union Liqui Property	The scheme offers to finance for working capital requirements, purchasing a plant/machinery, renovating the factory/office, or paying high-cost debts. The loan amount can range from Rs.0.10 crore up to Rs.10 crore.
Union Rent	Landlords of the bank branches (including the residential properties leased to the bank), other public-sector banks, public-sector undertakings, post office, government departments, and the other commercial and residential properties rented out to companies, MNCs, institutions, private sector banks, and others can avail a loan for short or long-term needs.
Union e-Way Bills Solution	Get financing against domestic unpaid invoices, which are registered under GSTN based on the e-Way bill number.
Union General Credit Card	The card covers the general credit needs of individuals related to entrepreneurial activities in the non-farm sector. The maximum credit amount for this facility is Rs.50,000. The maximum repayment period is 60 months.
Prime Minister SVANidhi	PM Street Vendors’ AtmaNirbharNidhi (PM SVANidhi) scheme is a micro-credit facility that provides affordable loans to street vendors whose life has been adversely affected by the COVID-19 lockdown. e-KYC is mandatory for all direct applicants under the scheme. A loan of up to Rs.10,000 will be provided to the eligible candidates.
Union Credit Guarantee scheme for sub-ordinate debt	MSMEs whose accounts are standard as of 31 March 2018 and who are making regular operations as standard accounts or NPA accounts during FY19 and FY20 can avail of the loan. The maximum repayment tenure is 10 years.

Interest Rates

For advances up to Rs.25 crore excluding the additional credit risk premium for term loans.

Internal Rating	Interest Rate (% p.a.)*
CR1	EBLR+2.75%
CR2	EBLR+3.00%
CR3	EBLR+3.25%
CR4	EBLR+3.75%
CR5	EBLR+4.25%
CR6	EBLR+4.50%
CR7	EBLR+4.75%
CR8-CR10	EBLR+4.75%

*EBLR is at 6.80% with effect from 11 February 2021.

Features and Benefits

• Financing for MSMEs is offered to meet the working capital requirement of the applicants and the form of term loans.
• The MSME loans are offered at reasonable rates.
• The interest rate for the loan is determined based on the applicant’s credit rating.
• An internal credit rating will be allotted to the applicant based on the credit history and other features to determine the interest rate applicable.
• The interest rates differ based on the loan amount.
• Various loan schemes are offered based on the occupation and nature of the business of the applicant.
• Short to long-term loans are offered under different schemes.
• Insurance becomes mandatory for term loans with a tenure of one year or more.
• The loan amount can go beyond Rs.25 crore subject to certain conditions.
• Minimal fees and charges are levied on the loan transactions.
• The margins for different loan schemes are set based on the applicable circumstances.
• Women entrepreneurs are encouraged through dedicated loan schemes.

Eligibility Criteria

Union Parivahan	All business units: Individuals, HUF, Proprietorship, Partnership concerns (including LLP), Limited Companies engaged in transportation business or any other business
Union Nari Shakti	All women-owned and managed MSMEs engaged in manufacture or production, processing or preservation of goods, or enterprises engaged in providing or rendering of services or engaged in trading activity Units with partner’s capital/share capital in case of private/public limited companies of minimum 51% with women shall be considered as units owned by women
Union Stand-Up India	Scheduled Caste (SC) or Scheduled Tribe (ST) borrower or woman borrower Above 18 years of age For setting up a Greenfield enterprise indulged in manufacturing, service or trading activity In the case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by either an SC/ST or women entrepreneur The borrower should not be in default to any bank/financial institution
Union Professional	Practising Chartered Accountants, Architects, Engineers, Valuers, Management/Financial Consultants, Company Secretaries, Cost Accountants, etc
Union Turnover Plus	All Micro, Small & Medium Enterprises (MSME) engaged in manufacturing or service or trading activity irrespective of the constitution
Union Ayushman Plus Scheme	Practising, qualified medical practitioners with a recognised graduate degree in any branch of Medicine/Surgery/Dental Science/Physiotherapy/Radiology/Pathology/Diagnostic imaging etc. Minimum practising experience: One year Age group: 25-65 years Any branch of medical science Minimum qualification – MBBS – BAMS – BHMS – BDS – BV.Sc & AH – Degree in Paramedical services – X-ray Technology and Radiology – Medical Laboratory Technology – Physiotherapy – Optometry of Ophthalmic Technology
Union Start Up scheme	The unit must be eligible and certified as “Start-up” by the concerned government authority as per the Start-up India scheme
Union MSME Suvidha	All units engaged in the manufacturing, services, and trading activity The units must be classified as MSMEs
Union GST Gain	Units engaged in trading, services, manufacturing activities Retail traders, wholesale traders including supermarkets, malls, departmental stores Dealers in groceries, consumer durables, co-operative stores, manufacturer, repairs shops irrespective of the constitution and Must be classified as MSME (Manufacturing/Service Enterprise)
Union Progress	Business units irrespective of classification under Micro & Small enterprise category
Union Liqui Property	Business enterprises, irrespective of the constitution Proprietorship/Partnership/Companies/Trust/Association Individuals and HUF engaged in business activity for a minimum of the last two years not eligible Enterprises engaged in speculative activities and real estate activities are not eligible
Union Rent	Landlords of the bank branches (including residential flat/houses leased to the bank) Owner of property (commercial/residential) who have rented the same to Public Sector Banks, Public Sector Undertakings, Post Office and Government Departments Owner of property (commercial/residential/IT parks/malls/properties in industrial area/SEZ) who have rented the same to other reputed companies/MNCs/ Institutions/Private Sector Banks
Union e-Eay Bills Solution	Business enterprises enjoying existing Fund based working capital facility from the bank

Fees and Charges

Processing Fee on Working Capital Loan

Up to Rs.25,000	Nil
Rs.25,000-Rs.2 lakh	Rs.400 per proposal
Rs.2 lakh-Rs.10 lakh	Rs.300 per lakh (minimum of Rs.1,000)
Above Rs.10 lakh	Rs.350 per lakh Priority Sector: Maximum of Rs.30 lakh Other advances: No limit

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• No processing charge for micro and small enterprise loans of up to Rs.5 lakh.
• 50% concession in processing charges on advances against government securities, UTI/Mutual fund units, NSCs, Life Insurance Policies, KVPs, IVPs, RIBs.

Processing Fee on Term Loan/DPGL/Demand Loan

Up to Rs.25,000	Nil
Rs.25,000-Rs.2 lakh	Rs.1,000 per loan
Rs.2 lakh-Rs.5 crore	1.30% of the limit; minimum of Rs.3,000
Rs.5 crore-Rs.25 crore	1.10% of the limit; minimum of Rs.7 lakh
Above Rs.25 crore	1% of the limit; minimum of Rs.30 lakh Priority Sector: Maximum of Rs.100 lakh Other advances: No limit

Frequently Asked Questions

In the case of refinancing the SME loan, how is the processing charge calculated?

In refinancing your SME loan, the processing fee will be levied on the outstanding loan amount and not on the sanctioned loan amount. The percentage of the fee will be based on the applicable loan type.

Should I pay a prepayment penalty if I decide to pay off the debt well before the loan tenure?

Please understand that a prepayment facility is not available for working capital loans. When it comes to term loans, a prepayment penalty will be levied at a flat 2% of the term loan prepaid as on the date of prepayment. This is applicable only for loans with a repayment tenure of 36 months and above.

Should I pay loan insurance premiums in the case of term loans?

You have to pay premiums towards the additional credit risk for term loans with a tenure of over one year. This premium will be payable over and above the interest rate applicable to the term loan. The premium calculation for the term loans is given in the table below.

Total Tenure (including moratorium period)	Premium
1 – 3 years	0.10%
3 – 5 years	0.25%
5 – 10 years	0.50%
> 10 years	1%

Is there a limit on the date of the invoice that is eligible to avail financing under the Union e-way bills solution scheme?

Yes. The financing will be provided only on invoices that are not older than three months. Book debts covered under this scheme will not be covered under any other credit facility. This is to avoid double financing.