Term Credit for Capex, Plant & Machinery, and Expansion
Structured repayment loans for machinery, equipment, construction, and scale-ups with collateral or guarantee support
Quick Stats
About Term Loan
Term loans fund capital expenditure such as plant and machinery, equipment, vehicles, and project build‑outs, repaid in structured EMIs over medium to long tenures with optional moratorium during installation and ramp‑up. Banks assess viability via projected cash flows, DSCR, promoter contribution, collateral/guarantee support, and compliance with PSL/MSME guidelines. [1][11]
For smaller MSMEs, collateral‑free term credit may be covered under CGTMSE subject to eligibility, while larger tickets may use collateral or hybrid security; exporters and growth‑stage firms may alternatively consider External Commercial Borrowings (ECB) subject to FEMA/RBI norms and minimum average maturity. [20][12][13]
RBI/PSL directions and bank policies govern margins, security, appraisal documentation, and periodic reviews; composite credit combining term and working capital is permitted up to ₹1 crore to simplify access for MSMEs. [11][1]
Capex Financing
Funds purchase/installation of machinery, lines, construction, vehicles, and tech upgrades aligned to project DPR.
Structured Repayment
Tenures typically 3–10 years with EMI schedules, grace period for ramp‑up, and covenant‑based monitoring.
Security Options
Primary charge on assets created; collateral or CGTMSE guarantee/hybrid cover as per eligibility and bank policy.
ECB Alternative
For eligible borrowers, ECB offers foreign/INR term debt with track‑based MAMP (3–10y) and hedging norms.
Success Stories
"Term loan with 12‑month moratorium funded new lines; DSCR‑based structuring kept EMIs comfortable."
Metro Plastics
Injection Moulding
Funded: ₹3.8 Crore
"CGTMSE hybrid security bridged collateral gaps and accelerated commissioning timelines."
Nova Foods
Processing Plant
Funded: ₹9.5 Crore
"ECB tranche matched dollar revenues; hedging plan mitigated currency risk per AD bank norms."
TransWorld Logistics
Fleet Expansion
Funded: ₹6.2 Crore
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