Union Bank of India Business Loan

Union Bank of India Business Loan Highlights
Interest rates	Linked to MCLR and EBLR
Loan amount	Rs 50,000 onwards
Tenure	Up to 15 years

Interest Rates of Union Bank Business Loans

Union Bank Business Loan Interest rates are linked to MCLR and EBLR, depending on the scheme. However, the bank has not disclosed its updated interest rates.

Union Bank Business Loans Fees and Charges

Processing charges

Union Professional Loan	0.75% of loan amount subject to minimum of Rs 5000 + GST.
Union Rent	Up to Rs 5 crore: 0.50% + GST Above Rs 5 crore and up to Rs 50 crore: 0.25 % + GST Above Rs 50 crore: 0.50% + GST
Union Sanjeevani Loan Scheme	NIL

Other fees and charges

Union Mudra documentation charges

Flat Rs 500 + actual stamp duty

Types of Union Bank Business Loan

Union MSME Suvidha

• Purpose: It is a fund based and non-fund based working capital requirement loan for MSMEs engaged in the manufacturing/ services/ trading sector. This loan facility is offered in the form of term loans (both fund-based and non-fund based) and/or secured overdraft facility. However, the secured overdraft facility can only be availed by MSME enterprises engaged in the service sector.

The term loan facility under Union MSME Suvidha Loan can also be availed for:

• • Purchase/ construction/ renovation of business premises, factory/ offices/ shop/ godown/ plant & machinery/ equipment etc.
  • Purchase of equipment like computers, air-conditioner, furniture & fixtures and other fixed assets like commercial vehicles
  • Any other purpose whereby asset is created out of Union Bank’s finance for the purpose of running the business

• Loan Amount:
  • Minimum: Above Rs 10 lakh
  • Maximum: Up to Rs 50 crore (Up to Rs 5 crore for overdraft facility)
• Margin:
  • Fund based working capital: 20% [stock (excluding dead stock) & book debts aged up to 90 days]
  • Non-fund based working capital: 25% (cash/FDR)
  • Term loan:
    • Plant & machinery/ equipment: 25%
    • Land & building/ building/ others: 35%
• Security coverage:
  • Minimum 75% (125% for OD facility) of the loan amount by way of immovable properties (land and building) and/ or other liquid assets like NSCs /KVPs/ deposits/ assignment of LIC policies/other Govt. securities can only be considered for security coverage
  • Value of immovable property (fully constructed, ready to occupy and ready for mortgage) acquired through the term loan (for the purchase of a fully constructed shop/ office/ warehouse) would be considered as security. No additional collateral is required for such term loans
  • Agriculture property/ educational institutions/ hospital properties/ religious trusts would not be considered as security
  • 5 times weightage for clearly defined liquid securities may be considered for the purpose of pricing only
• Top up loan under Union MSME Suvidha: Need based top up loan with a cap of 20% of the assessed limit for term loan and/or non-fund based/ fund based working capital, subject to a maximum of Rs 5 crore, can be availed.

Union Equipment Finance

• Purpose: Union Equipment Finance is offered in the form of term loan facility to purchase commercial equipment and commercial vehicles for use in existing business activity or for captive use. Borrower can also avail credit line under this loan facility as per their eligibility, in tranches as per their requirement within a period of 1 year from date of sanction. Importers can also avail Union Equipment Finance in the form of front ended Letter of Credit (L/C) to import equipment.
• Minimum loan amount: Above Rs 10 lakh
• Maximum loan amount: Rs 50 crore
• Tenure: Maximum loan tenure can go up to 5 years and 7 years, depending on the applicant, including a moratorium of 3 months.
• Security: Hypothecation of the equipment to be purchased. No extension of collateral or CGTMSE is required.
• Margin: At least 5% of the cost of the equipment along with DSRA (Debt Service Reserve Account) of 3 months. Else the required margin will be 10%.

Union Professional

• Purpose:
  • To finance acquisition of office premises for self-occupation.
  • For outright purchase of ready built/ existing office premises or premises under construction in commercial complexes/ independent buildings and construction of office premises in the land already owned OR for purchase of site/ land and construction of office premises thereon.
  • Where loan is for purchase of site/ land and construction of office premises, value of the land should not exceed 50% of the total project cost.
  • Loan for purchase of office furniture & fixtures, solar water/ electricity systems should be considered only for the office premises acquired under the Scheme.
  • In case of ready built property the age of the property should not be more than 30 years (i.e. at the time of sanction of loans). Further, the residual life of the property should be at least 10 years more than the repayment tenor of the loan (Certificate of residual age of the security to be obtained from empanelled valuer prior to sanction of loan).
  • Loans for repair/ renovation/ improvement/ extension of office premises may also be considered against the security of office premises or any other immovable property /other financial assets after maintaining prescribed margin on respective security.
• Loan amount:
  • Rural centres: Rs 10 lakh
  • Semi-urban centres: Rs 50 lakh
  • Urban centres: Rs 2 crore
  • Metro: Rs 5 crore
• Tenure: 7 years (including 12 months moratorium period)
• Margin:
  • Uniform margin of 35% on cost of construction/ purchase consideration (the agreement value inclusive of stamp duty/ registration, etc.)
  • 40% for furniture and fixtures etc. (only if office premises is acquired under the scheme)
  • Where loan is for purchase of site/ land and construction of office premises, value of the land should not exceed 50% of the total project cost.

Union Ayushman Plus

• Purpose: It is a term loan for purchase/construction/renovation/expansion/ modernization of premises and purchase of equipment & ambulance. This loan facility is also available as cash credit for working capital requirements.
• Amount: Rs 100 crore (term loan + working capital)
• Tenure: Maximum 7 years including moratorium up to 6 months for standalone equipment. In case of project finance, maximum tenure up to 15 years with moratorium of 1 year from DCCO (Date of Commencement of Commercial Operations) is allowed
• Margin:
  • Equipment: 15%
  • Land/construction/renovation: 35% (cost of land being financed should not exceed 50% of project cost)
• Collateral security:
  • Nil if covered under CGTMSE
  • 25% for the exposure not covered under CGTMSE/Hybrid model of CGTMSE
  • No Collateral/ CGTMSE coverage should be insisted for standalone Equipment finance to established hospitals satisfying the eligibility criteria stipulated by the Bank.

Union Contractor Scheme

• Purpose: It is a fund based and non-fund based term loan and/or working capital for contractors of railway/mining/electrical/construction. Working capital facilities based in the form of secured overdraft can also be extended to contractors.
• Amount:
  • Minimum loan amount: Rs 10 lakh
  • Maximum loan amount: Rs 50 crore
• Primary security: Assets created out of Union Bank’s finance will be charged in the favour of the bank by way of mortgage/hypothecation, etc.
• Collateral security: By way of immovable properties (land and building) and/ or other liquid assets like NSCs (National Saving Certificate) /KVPs (Kisan Vikas Patra)/ deposits/ assignment of LIC policies/others. Minimum collateral value will be as follows:
  • Cash credit: 75%
  • Overdraft facility: 100%
  • Term loan: 50%
  • In cases of bank guarantee or letter of credit, minimum security of 50% of the credit exposure will be obtained
• Margin:
  • Fund based working capital: 20 % on stock and 30 % on book debts (up to 90 days)
  • 40% on book debts above 90 days and up to 180 days
  • Non-fund based working capital: 10% cash margin
  • Term loan: plant & machinery (15%) and land/building/others (35%)

Union Solar

• Purpose: It is a term loan facility for MSMEs/business enterprises on pan-India level for purchase and installation of rooftop/ground mounted solar units aimed at cost saving and increased use of renewable energy for existing business use (captive consumption).
• Amount:
  • Minimum loan amount: Above Rs 10 lakh
  • Maximum loan amount: Rs 8 crore
• Tenure: Up to 10 years (including moratorium of 3 months)
• Primary security: All assets created out of term loan
• Margin: 20%.
  • For proposals with collateral coverage of more than 35%, minimum margin may be reduced to 15%.

Union Nari Shakti Scheme

• Purpose: This scheme is offered to women managed/owned MSMEs for purchasing/constructing/renovating their business premises and for purchasing plant and machinery. Such MSMEs can also avail this loan facility in the form of cash credit for meeting their working capital requirements.
• Amount:
  • Minimum loan amount: Rs 2 lakh
  • Maximum loan amount: Rs 10 crore (maximum amount Rs 20 lakh for SHGs)
• Margin:
  • 5% for limits up to Rs 1 crore
  • 15% for limits above Rs 1 crore
• Collateral security:
  • Nil for limits up to Rs 2 crore with CGTMSE coverage
  • Hybrid model of CGTMSE with collateral of 25% for the portion uncovered under CGTMSE for limits above Rs 2 crore

Union GST Gain

• Purpose: This scheme is offered to GST registered MSMEs to finance their need based based working capital requirements
• Amount:
  • Minimum amount: Above Rs 10 lakh
  • Maximum amount: Rs 5 crore
• Margin: 20%
• Security:
  • Primary: Hypothecation of stock and book debt
  • Collateral: Starting from 50% of the loan amount depending on the internal rating and CMR of the MSME

Union Progress

• Purpose: Union Bank offers Union Progress loan scheme to businesses in the micro and small enterprises category in the form of working capital loans and term loans. These enterprises can avail this loan scheme to finance their working capital requirements and to meet other business related needs like purchasing/constructing their business/office premises (including cyber cafe) and purchasing machinery (including generator set, equipment, etc), vehicles and other fixed assets.
• Amount: Up to Rs 2 crore
• Tenure:
  • For working capital: 1 year (subject to renewal)
  • Term loan: 7 years (including moratorium)
• Margin for working capital limits:
  • 10% for credit limit up to Rs 10 lakh
  • 25% for credit limits above Rs 10 lakh
• Margin for term loans:
  • Land and building: 35%
  • Machinery and equipment: 25%
  • Others: 25%
• Primary security: Assets created from the loan proceeds serve as primary security for the loan through hypothecation, mortgage, etc
• Collateral:
  • No collateral for loans up to Rs 10 lakh extended to units in MSE sectors
  • All loans up to Rs 25 lakh extended to micro and small enterprises and eligible for coverage under the CGTMSE scheme should be covered under the scheme without any exception

Union Liqui Property

• Purpose: Businesses can avail the Union Liqui Property loan facility as term loan or overdraft facility to meet their working capital requirements, shore-up their net working capital, purchase plant & machinery/equipment and finance repayment of existing debts availed at higher interest cost.
• Amount:
  • Minimum amount: Rs 50 lakh
  • Maximum amount: Rs 10 crore
• Tenure:
  • Term loan: Maximum 10 years
  • Overdraft: 1 year
  • The loan repayment must end at least 5 years before the end of the residual life of the property as per valuation report
• Margin: 50% of the net realisable value of the property (value of the property should be 200% of the proposed loan amount)
• Guarantee: Personal guarantee of the partners / directors /promoters (other than independent/professional director) and personal guarantee of property owners

Union Parivahan

• Purpose: It is a term loan facility offered to finance transport operators and other businesses for purchasing brand new vehicles.
• Loan amount: The loan amount for this facility can go up to Rs 5 crore, which will be inclusive of the cost of the vehicle, tanker, accessories, road tax, insurance charges, registration charges, etc. Borrowers should also note that the cost of accessories which is to be financed, should not exceed more than 5% of the actual cost of the vehicle.
• Tenure: Up to 5 years (3 months moratorium for HCV/HMV and 1 month moratorium for LCV/LMV)
• Margin: Minimum 20%
• Primary security: Hypothecation created on the financed vehicle serves as the primary security. The hypothecation on the vehicle has to be registered with the Regional Transport Authority.
• Collateral:
  • If advance is covered under CGTMSE Guarantee Scheme: NIL
  • If advances are not covered under CGTMSE: Collateral security of at least 25% of the loan amount in the form of property mortgage, NSCs (only surrender value), KVPs (only surrender value), FDR/LIC Policy (surrender value) and/or units of eligible mutual fund has to be submitted.

Union Stand-up India

• Purpose: Union Bank of India offers Stand-up India loan facility to Scheduled Caste (SC)/ Scheduled Tribe (ST) borrowers or women borrowers to set up greenfield enterprises in manufacturing, service, trading and agriculture-allied activities.
• Loan amount:
  • Minimum amount: Rs 1 lakh
  • Maximum amount: Rs 1 crore
• Tenure: Up to 7 years (including moratorium of 18 months)
• Working capital: It is usually sanctioned based on CCH (cash credit hypothecation) limit. However, a working capital limit of Rs 10 lakh can be sanctioned as an overdraft facility. Rupay Debit card is also issued to the borrower.
• Margin: 15% of the project cost has to be submitted as margin. However, subsidies provided by the state or central government will be treated as margin money provided the borrower contributes at least 10% of the project cost from his own resources.

Union Turnover Plus

• Purpose: Union Bank of India offers Union Turnover Plus to MSMEs adopting digital channels for their business transactions. Such MSMEs can avail this loan facility on the basis of their projected sales turnover to finance their need based working capital loan.
• Loan amount: Up to Rs 5 crore
• Tenure: This loan facility is offered as ‘on demand’ facility, with annual renewals.
• Margin: 20%
• Primary security: Assets created out of the loan proceeds should be charged in favour of the bank by way of hypothecation/mortgage, etc.
• Collateral:
  • No collateral for loans up to Rs 10 lakh for eligible borrowers covered under applicable credit guarantee scheme
  • Minimum 60% of total credit facility obtained where the account could not be covered under any credit guarantee scheme

Union Sanjeevani Loan for Healthcare Sector

• Purpose: Union Bank of India offers Union Sanjeevani Loan for healthcare sector to set up oxygen plants with power back up (for purchasing generator sets or inverter) in hospitals for medical use & for financing units engaged in the manufacturing of oxygen cylinders, liquid oxygen, etc. UBI offers this facility as a term loan or non-fund based (letter of credit – CAPEX) scheme.
• Loan amount: Up to Rs 2 crore
• Tenure: Up to 5 years (including moratorium of 6 months)
• Margin: 20%
• Primary security: The primary security for this loan facility is the assets created out of bank finance.
• Collateral: The collateral security for this loan facility includes 25% SARFAESI compliant tangible securities unless covered under the CGTMSE.

Union Bank Business Loan Eligibility Criteria

The eligibility criteria required for different types of Union Bank Business Loan is mentioned below:

Eligibility of Union MSME Suvidha

• All units engaged in the Manufacturing/ Services/ Trading activity, eligible to be classified under MSME
• Enterprises engaged in speculative activities/Real Estate activities are not eligible for finance under this scheme

Eligibility Criteria for Union Equipment Finance

• All MSME and Non-MSME units irrespective of line of activity availing Working capital (FB/NFB (both LC and BG) limits from our Bank
• New to Bank MSME (all activities) and New to Bank Non-MSME (Contractors) with External Credit Rating BBB and above
• Borrower should be in business for a minimum of 2 years. Unit must be profit making and not under SMA category as on date of sanction. Account should not be SMA-2 during last 12 months
• New to Bank MSME borrowers with compliance to the following (in place of external rating of ‘BBB’ & above) are also eligible with maximum limit of Rs 10 Crs:
  • To be in operation for a minimum of 3 years
  • Registered Net profit for past 3 years
  • Account should not be appearing as SMA-1 and SMA-2 with any lenders in the past 2 years
  • CIC score of the promoters/directors should be 700+
  • CIBIL CMR, Financial benchmark ratios as per Bank’s extant policy

Eligibility Criteria of Union Professional Loan

Practising chartered accountants, architects, engineers, valuers, management/financial consultants, company secretaries, cost accountants, etc.

Eligibility Criteria for Union Contractor Scheme

• All Construction Contractors / Electricals Contractors/ Mining / Railway Contractors eligible to be classified as MSME with a valid UDYAM Registration. Minimum experience should be of two years.
• MSME units regardless of constitution, that is, Individuals, Proprietorship, Partnership Concern (including LLP), Limited Companies having all the necessary statutory licences / NOCs.
• Unit to avail loan under Sole Banking arrangement (Except Retail loans), however exception to be given to those borrowers availing credit facilities under Equipment Finance/ Loan Against Property (LAP)/ Commercial Vehicle loan/ Term Loan (From Government Owned Financial Institution other than PSBs/SBI) for existing business purpose.

Eligibility Criteria for Union Solar

• All business enterprises regardless of constitution. (Individual/Proprietorship/Partnership/Companies/Trust/Association etc.) other than HUF
• CIC Score in case of Individual/Proprietary concerns should be minimum 700
• Installation of Solar Unit to be grid connected and should have the net metering arrangement/site feasibility approval from jurisdictional DISCOM/Chief Electrical Inspector to Government (CEIG))
• Savings in electricity cost post installation of renewable energy sources should cover at least the monthly repayment obligation of the Term Loan availed for the same under the subject scheme
• Only onsite projects to be financed under the scheme
• Property where the Solar Unit is proposed to be installed should be under the ownership of the borrower or the borrower should have the leasehold rights (including option of renewal) on the property covering the tenor of the loan.
• In case of existing borrowers, the account should not be overdue or under SMA at the time of sanction.

Eligibility Criteria for Union Nari Shakti Scheme

• All women owned and managed MSMEs ( MSMEs having share capital of minimum 51% with women)
• Self Help Groups (SHGs) having Udyam Registration

Eligibility Criteria for Union Equipment Finance

• All MSME and Non-MSME units irrespective of line of activity availing Working capital (FB/NFB (both LC and BG) limits from our Bank
• New to Bank MSME (all activities) and New to Bank Non-MSME (Contractors) with External Credit Rating BBB and above
• Borrower should be in business for a minimum of 2 years. Unit must be profit making and not under SMA category as on date of sanction. Account should not be SMA-2 during last 12 months
• New to Bank MSME borrowers with compliance to the following (in place of external rating of ‘BBB’ & above) are also eligible with maximum limit of Rs 10 Crs:
  • To be in operation for a minimum of 3 years
  • Registered Net profit for past 3 years
  • Account should not be appearing as SMA-1 and SMA-2 with any lenders in the past 2 years
  • CIC score of the promoters/directors should be 700+
  • CIBIL CMR, Financial benchmark ratios as per Bank’s extant policy

Eligibility of Union Ayushman Plus

• Hospitals/Clinics/Nursing Homes/ Diagnostic Centres, Pathology labs etc
• Qualified Medical Practitioners in the age group of 25 to 65 years

Eligibility Criteria of Union GST Gain

• All MSME units engaged in manufacturing/service/trading activity with Udyam Registration
• Unit avail credit facilities under Sole Banking arrangement only
• To secure internal credit rating CR-1 to CR-4
• The borrower should be in possession of requisite registration under GST Act viz. i.e. Provisional Registration (Form GST REG-25) or Final Registration (Form GST REG-06)
• Must have filed last 12 month GST returns (Either monthly or annual return) with exception to newly established MSME units where the requirement is filing of GST return for minimum 3 months (monthly return) or for minimum one quarter (quarterly return)
• Minimum 80% of the turnover in Current/ CC accounts should be against the sales mentioned in the GST Return.

Union Progress Eligibility Criteria

• All business units irrespective of classification under Micro & Small enterprise category.

Eligibility Criteria of Union Liqui Property

• All business enterprises irrespective of constitution (Proprietorship/ Partnership/ Companies/ Trust/ Association etc) other than individuals and HUF engaged in business activity for a minimum of two years.
• Enterprises engaged in speculative activities/real estate activities are not eligible for finance under this scheme.

Eligibility Criteria of Union Parivahan

All business units of following constitution i.e. Individuals, HUF, Proprietorship, Partnership concerns (including LLP), Limited Companies, engaged in transportation business or any other business.

Union Stand-up India Eligibility Criteria

• Scheduled Caste (SC) or Scheduled Tribe (ST) borrower or woman borrower, above 18 years of age, for setting up a Greenfield enterprise indulged in manufacturing, service or trading activity, Loans for enterprises in “Activities allied to Agriculture”.
• In case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by either a SC/ST or women Entrepreneur.
• Women from all strata of the society are eligible under the scheme.

Union Turnover Plus Eligibility Criteria

All Micro, Small & Medium Enterprises (MSME) engaged in manufacturing activity or service activity or trading activity regardless of constitution will be eligible under the scheme.

Union Sanjeevani Eligibility Criteria

All manufacturers and suppliers of oxygen cylinders, medical oxygen, existing hospitals or nursing homes, excluding those accounts eligible under UGECL 4.0 or ECLGS 4.0.

Documents required for Union Bank of India Business Loan

Union Bank of India has not disclosed the documents required for the lender’s business loan schemes. Apart from the documents required for the purpose of KYC verification, proof of residence/business address, income proof and proof of business continuity of the MSME unit, the lender may ask its loan applicants to submit additional documents based on the features of the loan scheme.