Business Loans India : UCO Trader Loan

Everyone wants to expand his business so that he can compete well in the market. For such a growth, he needs regular flow of money in the business. This money is a source of energy for the business. All business needs are well accomplished with the help of this money. The businessman always seeks some external financial support so as to make the money flow regular in the business. Business loans act as such financial help for these persons. They can fulfill all business demands well in time with the help of these loans.

For expanding your business, you may have to make different strategies. You may decide to establish a new factory in any other city so that you can go beyond the boundaries. In some cases, if you renovate your marketing strategy and decide to launch a new product, then a heavy expenditure on the advertisement is needed. Thus, in every situation, you need sufficient flow of cash so that you can successfully implement your strategies to expand the business.


It is a loan for financing working capital and Term Loan needs of Retail and Wholesale trading activities other than Export. Retail and Wholesale trade in various types of commodities (not services) excluding those items which are specifically prohibited/restricted by the Bank, are financed through this scheme. Fund based Advance is granted by way of Cash Credit against stock as well as Book debt and Term Loan for acquisition of fixed assets to run the trade and business.


Existing enterprises engaged in business for at least 2 years and earning profit during the last 2 years.
New trading unit started by existing UCO Trader borrowers or their close relatives/ allied/associate/connected concern under certain terms

New trading units as well as units which have not completed two years can be financed maximum upto Rs.10 lac under certain terms

Quantum of loan

Minimum Rs. 1 Lac and Maximum Rs 200 Lac

Within fund based limit of Rs. 200 lac, term loan up to Rs. 25 lac can also be sanctioned for acquisition of fixed assets. Repayment period of Term Loan not to exceed 60 months. Besides the above quantum of fund based limit, NFB limit by way of Inland LC/Bank Guarantee if needed, may be issued maximum up to 50% of FB working capital limit.

Salient features


* No margin is required for Cash Credit in case of existing units & 20/25% for new units while computing drawing power
* Margin for Term Loan, LC & BG is 25%
* Application is simple; Balance Sheet is not required for limit up to Rs 10 lac and not compulsory for limit below Rs 50 lac subject to certain conditions.


* Primary-Hypothecation of stocks and book debt.
* Collateral-100% for Cash Credit (against stocks only ) and Term Loan, 125% for Cash Credit(against stocks and debtors)

Processing Charges- 0.50% of fund based limit, 0.25% of Non-Fund based limit.

Leave a Reply

Your email address will not be published. Required fields are marked *