Haryana Financial Corporation (HFC) was established in the year 1967 under State Financial Corporation's Act 1951. The Corporation meets the credit needs of small /medium scale industrial units Nursing Homes, Hotels, Amusement Parks, Complexes, Sfotware Development/E-commerce, Vehicles etc by advancing term loans primarily for the purpose of acquiring fixed assets such as land, building and plant & machinery. The Head office of the Corporation is at Chandigarh and Branch Offices are at each district head quarter of the State.
The maximum limit of loan accommodation is Rs. 500 lacs in the case of Companies and Rs. 200 lacs in case of others. The Corporation in Joint participation with HSIDC extends loans upto Rs. 1300 lacs. The existing units can also avail loans to the extent of Rs. 500 lacs for expansion/modernisation of the units. The Corporation provides financial assistance to such companies whose aggregate paid up capital and free reserves do not exceed Rs. IO crores. The cost of project should also not exceed Rs. 12 crores for industrial units and Rs 10 crores for service sector and industrial infrastructure projects.
Loans from the Corporation are normally repayable within a period of 7 to 8 years with a moratorium period of 1 & 1/2 years for SSI units and 10 years with gestation period of 2 years for Non-SSI units.
Various parameters for financing the industrial units are as under :
Type of Industry Rate of intesest
p.a.excl. intt. taxDebt. Equity Ratio Promoters' Contribution Margin on Fixed Assets SSI 14% 2:1 22.5% 20% Non-SSI 15% 2:1 22.5% 30%
In addition to general term loans, the Corporation also operates various special schemes to meet diverse credit needs of the borrowers. Some of the special schemes are as under :-
The Corporation provides quick financial assistance upto Rs. 500 lacs to the existing well running units for acquiring equipment at a margin of 25%. The loans is repayable between 2 to 5 years depending upon the repayment capacity of the borrowers. To be eligible for loans under equipment refinance scheme, the existing industrial concerns should be in operation for 4 years and should have earned profits / declared dividends during the lost two financial years and should not be in default with the institutions/banks.
NATIONAL EQUITY FUND SCHEME (NEF)The scheme promoted by SIDBI provides equity type support to entrepreneurs for setting up new projects in tiny and small scale sector. The promoters' contribution is only 10%. The Corporation provides 50% term loan and SIDBI gives assistance of 25% as soft loan subject to ceiling of Rs. 10.00 lacs @ 5% service charge p.a. towards equity base of the project. Balance 15% has to be brought in the shape of LTLs (intt. bearing). The project cost should not exceed Rs. 50.00 lacs.
TECHNOLOGY DEVELOPMENT AND MODERNISATION SCHEME
The Corporation provides financial assistance to existing industrial units in small scale sector for modernising their production facilities and to adopt improved and updated technology. The unit should be in operation for atleast three years and should not be in default with institutions/Banks. Minimum promoters' contribution is 20% and project cost should not exceed Rs. 100.00 lacs.
TECHNOLOGY UPGRADATION FUND SCHEME FOR TEXTILE INDUSTRYUnder this scheme financial assistance will be made available to existing as well as new textile, jute and cotton ginning and pressing industries for five years effective from 1.4.1999 to 31.3.2004 for undertaking modernisation process through technology upgradation. Interest reimbursement of 5% on the interest rate charges by the Corporation will be available to the units from Govt. of India. Minimum promoters contribution is 20% of the project cost.
SCHEME FOR FINANCING VOCATIONAL TRAINING INSTITUTE
Financial assistance is available for setting up of vocational training institute for imparting technical knowledge for job/self employment in district/Tehsil Head quarters in Haryana. Minimum loan limit is Rs. 5.00 lacs. Minimum promoters contribution is 22.5%. Margin of 20% is retained on land & building and 30% on equipments. Technical institutions such as schools, colleges etc. are not eligible for financing under the scheme.
SCHEME FOR COMMERCIAL COMPLEXES, SHOWROOMS, SALES OUTLETS, DEPARTMENTAL STORES & SHOPPING MALLS
Corporation provides financial assistance for estabilishing commercial complexes, showrooms, sales outlets, departmental stores and shopping malls. Assistance for renovation and acquisition of additional establishment cost for existing functional commercial complexes can also be considered. Minimum promoters contribution is 22.5% with a debt-equity-ratio of not more than 2 : 1. A margin of 35% is retained on fixed assets.
SCHEME FOR FINANCING OF PROJECTS FOR COMPUTER SOFTWARE DEVELOPMENT/E-COMMERCE.Financial assistance is available for acquiring software & hardware, networking including telecommunication, portal services, internet dial-up, full time link, hot line link, Fax/Voice gateways, infrastructure including A.C., G. Set, furniture & office equipments,software development projects and cable network etc. to professionally qualified promoters. Minimum promoters contribution is 22.5% with a debt equity ratio of 2 : 1, 30% margin is retained and 100% collateral security is required for loan against equipment & other non-tangible assets where the land and building is owned by the promoters. Where land and building is on lease, collateral security equivalent to 150% of term loan is required.
Haryana Financial Corporation