Project Loan : Overview Project Loan is given by the lending institution or banks to the borrower for the purpose

of business expansion, reconstruction etc. Project loan is also available to acquire the fixed assets like land & building, plant & machinery etc. Project Loans are available to the existing business or industrial houses for growth purpose and equally available to the new business entrants in form of seed or startup capital. Projects loans are generally mid or long term period loans but lending institutions may consider the short term loan applications depending upon the feasibility of the project. The short term Project Loan can be availed for one year whereas the mid and long term project loans can be obtained for up to 10 years. The rate of interest is quite competitive as the loan term is longer and may be affected by the periodic changes made by the lending institutes. Construction & Infrastructure, Engineering, Automobile, Power, Gas & Petrochemical industries are some of the business domains generally leverage on the Project Loans. The aspirants should have the detailed project report ready as it is the very basis of getting project loan sanctioned. The lending institutions seek good credit, strong solvency ratio, strong management systems, technology penetration etc. as granting criteria for project loans

Baroda Arogyadham Loan

PURPOSE To meet the financial requirements for setting up of new Nursing Home/Hospital including Pathological Laboratory, Expansion/renovation/modernization of existing Nursing Home/ Hospital including Pathological Laboratory, Purchase of medical diagnostic equipments as also office equipments, viz. computers, air conditioners, office furniture, Purchase of ambulance etc and to meet working capital requirements. ELIGIBILITY All entities, i.e. MSMEs, Enterprises other than individuals like Proprietorship, Partnership firms, Private Limited Companies and Trusts engaged in providing medical/pathological diagnostic services to the Society and with turnover uptoRs. 150/crores. Note : The Promoters should have requisite qualification in any branch of medical science from a recognized University and should have minimum 2 years of work experience. LIMIT

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Notes :

Rural Centres - Rs. 0.50 crores Semi-Urban Centres - Rs. 6.00 crores Urban & Metro Centres - Rs. 12.00 crores

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Working Capital limits upto 10% of the annual sale or gross income, subject to 20% of the above ceiling limit in case of borrowers requiring both Term Loan and working capital facilities. In case of borrowers requiring only working capital limit, 20% of the above ceiling limit.

SECURITY

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Equitable mortgage of Land & Building/premises of Nursing Home/Hospital Hypothecation of medical equipment/office equipment acquired out of loan amount. Personal guarantee of Promoter Directors in case of Limited Companies and Trustees in case of Trusts. Hypothecation of medicines, receivables and other chargeable current assets. Charge on unencumbered assets of Promoter Directors in case of Private Limited Companies, or any other collateral by way of FDR, mortgage of properties in the personal name of the relatives of Promoters, etc.

MARGIN : 25%. Higher margin if collaterals are inadequate RATE OF INTEREST : As per credit rating of the borrower. REPAYMENT PERIOD : 35 months to 84 months including moratorium depending upon the projected cash flow.

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Project Loan
You can get projects loans like Educational projects (Management Schools, colleges), Hotel projects, Agriculture projects, diary firm projects, small scale industries loan, hospital project, nursing home project, medium scale industries loan etc. with a good term and low interest rates. For more details

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BANK LOANS FOR HOSPITALS AND HOTELS ARE NOT COMMERCIAL
Loans extended by banks to hotels and hospitals may no longer be treated as commercial real estate category. The Reserve Bank of India revised norms on real estate exposure where it included loans extended against security of future rent receivables from commercial real estate exposure. The revised norms will not immediately impact banks balance sheet. This is because standard provisioning for real estate companies were brought on a par with all other industries on November 15, 2008.

As a part of the stimulus package, the general provisioning requirement on standard advances for commercial real estate sector has come down from 2% to 0.04%. However, under reducing the standard provisioning for commercial real estate, RBI had said that they were counter cyclical prudential measures. This means that as and when the economic cycle changes, RBI may increase provisioning norms on commercial real estate sector. Meanwhile, on Thursday, RBI has continued to maintain that SEZs will be treated as commercial real estate. In case of hotels, the cash flows would be mainly sensitive to the flow of tourism, not directly to the fluctuations in the real estate prices. In the case of a hospital, the cash flows in normal course would be sensitive to the quality of doctors and other diagnostic services provided by the hospital. In these cases, the source of repayment might also depend upon the real estate prices to the extent that the fluctuation in prices influences the room rents, but it will be a minor factor in determining the overall cash flows. In these two cases, the recovery in case of default may partly depend upon the sale price of the hotel or hospital. Considering that repayment is not dependent on real estate prices, recovery is only partly dependent on the real estate prices, RBI decided not to treat them as real estate exposures. Justifying its stand on treating loan against future rent receivable as real estate, RBI pointed out that a few banks have formulated schemes where the owners of existing real estate such as shopping malls, office premises agree to repay loans from the income that is generated from the rentals by these properties. Such finance may or may not be secured by the mortgage of the underlying properties. In case it is unsecured, the repayment will be sensitive to fall in real estate rentals and there would be no source of recovery in case of default. In case the loan is secured by mortgage of the underlying property, both the repayment and recovery would depend upon property prices.