Looking for an instant loan to grow your business?
Looking for an instant loan to grow your business?

Union Bank of India Business Loans

Updated on:  

08 min read

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 TypesCluster 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 RatesBased on EBLR; 9.55% p.a. onwards
Loan AmountUp to Rs.200 crore
Loan TenureUp to 10 years

Types of Union Bank of India Business Loans

Cluster Specific SchemesThe 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 ParivahanThe 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 ShaktiWomen-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 IndiaThe scheme promotes entrepreneurship among SC/STs and women entrepreneurs. The loan quantum can be between Rs.10 lakh and Rs.100 lakh.
Union ProfessionalA 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 PlusThe 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 PlusGet 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 upThe 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 SuvidhaLoans 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 GainGet 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 ProgressMicro 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 PropertyThe 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 RentLandlords 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 SolutionGet financing against domestic unpaid invoices, which are registered under GSTN based on the e-Way bill number.
Union General Credit CardThe 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 SVANidhiPM 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 debtMSMEs 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 RatingInterest Rate (% p.a.)*
CR1EBLR+2.75%
CR2EBLR+3.00%
CR3EBLR+3.25%
CR4EBLR+3.75%
CR5EBLR+4.25%
CR6EBLR+4.50%
CR7EBLR+4.75%
CR8-CR10EBLR+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 ParivahanAll business units:

Individuals, HUF,
Proprietorship, Partnership concerns (including LLP), Limited
Companies engaged in transportation business or any other business
Union Nari ShaktiAll 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 IndiaScheduled 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 ProfessionalPractising Chartered Accountants, Architects, Engineers, Valuers, Management/Financial Consultants, Company Secretaries, Cost Accountants, etc
Union Turnover PlusAll Micro, Small & Medium Enterprises (MSME) engaged in manufacturing or service or trading activity irrespective of the constitution
Union Ayushman Plus SchemePractising, 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 schemeThe unit must be eligible and certified as “Start-up” by the concerned government authority as per the Start-up India
scheme
Union MSME SuvidhaAll units engaged in the manufacturing, services, and trading activity

The units must be classified as MSMEs
Union GST GainUnits 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 ProgressBusiness units irrespective of classification under Micro & Small enterprise category
Union Liqui PropertyBusiness 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 RentLandlords 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 SolutionBusiness enterprises enjoying existing Fund based working capital facility from the bank

Fees and Charges

Processing Fee on Working Capital Loan

Up to Rs.25,000Nil
Rs.25,000-Rs.2 lakhRs.400 per proposal
Rs.2 lakh-Rs.10 lakhRs.300 per lakh (minimum of Rs.1,000)
Above Rs.10 lakhRs.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.25,000Nil
Rs.25,000-Rs.2 lakhRs.1,000 per loan
Rs.2 lakh-Rs.5 crore1.30% of the limit; minimum of Rs.3,000
Rs.5 crore-Rs.25 crore1.10% of the limit; minimum of Rs.7 lakh
Above Rs.25 crore1% 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 years0.10%
3 – 5 years0.25%
5 – 10 years0.50%
> 10 years1%
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.

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