Commercial Vehicle Loan
Loans for purchase of heavy commercial vehicles in India are granted to transport operators.
- The transportation of goods by road transport is increasing day by day and it provides good self employment opportunities to new entrepreneurs as well as good opportunities to existing transport operators to expand their business.
- The person having necessary permit or letter of inprinciple approval of permit from RTO to run the commercial vehicle can avail the loan for purchase of vehicle.
- It is advisable to have a valid driving license by the borrower, else he has to produce sufficient proof of employment of driver having valid driving license.
- Margin requirement is generally 15% to 25% of cost of vehicle . In other words loan is available to the extent of 75% to 85% of cost of vehicle including cost of body building.
- Commercial vehicle loan is available under CGTSME scheme in which no collateral security or third party guarantee is required.
- All transport vehicle like auto, tempo, mini-truck/trucks and trawlers/mini-buses/buses comes under the category of commercial vehicle.
- Repayment tenure ranges from 5years to 7years by way of equated monthly installments.
- The interest on loan for commercial vehicle ranges from 10.25% to 13.5% p.a. depending on quantum of loan and financing institution.
- Just4uloan.com facilitate sanction of loan for purchase of commercial vehicle within shortest possible time at most competitive rate of interest from Banks/FI/NBFCs.
The borrower and/or the guarantors have to provide the following documents to the banks or the lending institutions while submitting the Heavy Vehicle Loan Application. Certain documents may be demanded by the bank or the lending institutions in post sanction phase or on periodical basis.
- Address Proof : Latest Electricity/Telephone Bill or Receipt of Maintenance Charges or Valid Passport or Voter?s Identity Card or Purchase/Lease Deed/ Leave & License Agreement of Residence or Office Premises.
- Identity Proof : Valid Passport, PAN Card, Voter?s Card, Any other photo identification issued by Government Agencies.
- Business Proof : VAT/CST Registration No. or MIDC Agreement or SSI Permanent Registration Certificate or Warehouse Receipts or Shop & Establishment Act Certificate or Copy of Lease Agreement along with the latest Rent paid Receipt.
- Business Profile on Company?s Letterhead.
- Partnership deed in case of partnership firms.
- Certificate of incorporation, Date of Commencement of Business and Memorandum of Title Deeds, Form 32 in for Addition or Deletion of Directors in case of companies.
- Last three years Trading, Profit & Loss A/c. and Balance Sheets (duly signed by a Chartered Accountant wherever applicable).
- Last one years? Bank statement of the Firm
- If existing loan, then sanctioning letter and repayment schedule of the same.
- Firm/Company?s PAN Cards.
- Individual Income Tax Returns of the Individual/Partners/Directors for last three years.
- Last one years? Bank statement of Individuals, Partners, Directors.
- SEBI formalities in case of listed companies.
- Share Holding pattern of Directors duly certified by a Chartered Accountant.
- List of the Existing Directors of the company from the Registrar of the Companies.
The process of issuance of heavy vehicle loan is as under:-
- Application form is accepted and acknowledged.
- Personal interview /discussions are held with the customers by the banks officials.
- Bank's Field Investigation team visits the business place/work place of the applicant. (All the documents submitted are verified by the bank with the originals so as to ensure the authenticity of the same.)
- Bank verifies the track record of the applicant with the Credit Information Bureau (India) Limited (CIBIL).
- In case of fresh projects the bank analyses the back ground of the applicant/firm/company and the Technical feasibility/financial viability of the project based on various parameters and also the existing market conditions.
- Depending on the size of the project the file is put up for sanction to the appropriate level of authority.
SANCTION AND ISSUANCE:
- On approval/sanction, the sanction letter is issued specifying the terms and conditions for the issuance of heavy vehicle loan. The acceptance to the terms of sanction is taken from the applicant.
- The processing charges as specified by the bank have to be paid to proceed further with the issuance of heavy vehicle loan.
- The documentation procedure takes place viz. Legal opinion of various property documents and also the valuation reports. (Original Documents to title of the immovable assets are to be submitted).
- All the necessary documents as specified by the legal dept., according to the terms of sanction of the loan of the bank are executed.
Issuance of heavy vehicle loan takes place after the Legal Dept. certifies the correctness of documents executed.
The Common norms for eligibility are as follows:-
- Experience-Ranging from 3 years to 5 years depending upon customer profile.
- Min 1 year repayment Track of Commercial Vehicle & Construction Equipment loan OR any other loan-up to 50% of fresh Loan request depending upon the customer category (Captive-Non Captive)
- Last 2 years Audited Financial –Compulsory in case of Pvt / Ltd Co., Partnership Firms, Trust and Society
- Ownership of min 2 vehicles/ assets from at least 1 year
