LoC Scheme for MSMEs
| Scheme Name | LoC Scheme for MSMEs |
| Purpose | To provide guarantees and financial assistance to MSME units for executing work orders, discounting bill receivables, and acquiring machinery, equipment, or vehicles for work execution. |
| Eligibility Criteria | • All entities with MSME-Udyam Registration and all ‘Industrial Concerns’ as defined in the SFCs Act 1951. • GST Registration: Must be GST registered. (Exemptions apply for MSMEs not legally required to register: currently turnover up to Rs 40 lakh for manufacturing and Rs 20 lakh for services). • Financial Statements: Must have the latest audited Financial Statements. (Not mandatory for MSMEs with an annual turnover up to Rs 200 lakh if income tax is paid on a presumptive basis; instead, IT returns and CA-certified financial statements must be provided). • Work Order in Hand: Must possess at least one Work Order at the time of sanctioning the Line of Credit. • Operations in Kerala: MSMEs supplying goods/services to PSUs/Corporates within Kerala are also eligible, provided their due diligence report (from MIRA/D&B), CIBIL reports, and financial statements are satisfactory. |
| Upper Loan Limit | Up to Rs 50 crore. |
| LOC Validity | 5 years (subject to annual renewal). |
| Processing Fee | 0.5% of the sanctioned Line of Credit plus GST. (Subject to a minimum of Rs 10,000 + GST and a maximum cap of Rs 25 lakh + GST). |
| Upfront Fee | 0.1% of the sanctioned Line of Credit plus GST. (Subject to a maximum of Rs 50,000 + GST). |
| Internal Credit Rating | Minimum 40% credit rating score required. |
| Facilities under LOC | • Performance Guarantee • Work Execution Facility (WEF) • Early Bill Discounting Facility (EBDS) • Government Bill Discounting Facility • Equipment Finance Facility (Note: Interest rates for all facilities are linked to the LOC’s credit rating score and fixed according to applicable MSME rates. Interest rate for GBDS: 9.50%) |