KVB Construction Plus

KVB Construction Plus is a specially designed loan for construction and interior material traders. With more than two years of profitable operations you can avail this loan and run your business smoothly.

Features and Benefits
  • This Loan is designed to meet the working capital requirements.
  • Entities dealing in trading of construction materials and interiors, viz. cement, sand, bricks, hardware, ceramic tiles, paints, hardware items, bathroom fittings, kitchen fittings, etc., with more than two years of profitable operations.
  • Minimum rating at the entry level shall be KVB BB (i.e.,) score of 51 and above.
  • Fund based limits - SOD-RE / OCC.
  • Non-fund based limits – BG / ILC / FLC.
  • The accounts may be classified as Priority Sector advances as per RBI guidelines from time to time.
Charges and Limits
Validity / Tenor
  • SOD-RE / OCC – Running account and renewable once in 12 months.
  • BG / ILC / FLC – Running facility and renewable once in 12 months.
  • ILC shall be sanctioned with tenor not exceeding 90 days and FLC with tenor not exceeding 120 days. The tenor shall be based on the operational cycle.
Limit
  • Fund based – Minimum of Rs. 15 Lakhs and Maximum of Rs. 1,000 Lakhs.
  • Non-fund based – Maximum of Rs. 500 Lakhs. Both put together should not exceed Rs. 1,500 Lakhs.
Margin
  • SOD-RE – 40% on Primary Security.
  • OCC – 25% on Stocks and 35% on Book Debts not older than 90 days (As against the applicable 40% margin for traders as per our credit policy.
  • BG / ILC / FLC – 15% cash margin.
Primary Security
  • SOD-RE – Equitable Mortgage on Land and / or Building other than agriculture property (with security coverage of minimum 167%).
  • OCC / BG / ILC / FLC – Hypothecation of entire Current Assets including Stocks and Book Debts.
Collateral Security
  • SOD-RE – Hypothecation of entire Current Assets including stock and book debts of the borrower, both present and future.
  • OCC / BG / ILC / FLC – Equitable Mortgage on Land and/or Building other than agriculture property. Minimum collateral security coverage shall be 100% as per the scheme. (No relaxation will be permitted). However, the branches and DOs shall endeavour to get 125% collateral security coverage.
  • If immovable properties are not sufficient to cover the required margin, Term Deposits / NSCs / Life Insurance Policies (all or any of them) may also be accepted to cover the difference amount. However, third-party instruments are not acceptable.
  • Third party properties may be accepted as per credit policy provisions.
Guarantor/s Partners of the firm/ Directors of the Company / Title holders of the immovable property given as security and Husband of Lady Guarantors / Proprietrix / Lady partners as per credit policy provisions.
Processing Charges
  • For fresh / takeover- 0.25% + GST (50% concession).
  • For renewal- 0.20% + GST (50% concession).

For Contractors

Eligibility
  • Contractors and Sub-contractors who undertake civil / construction works / electric works / pipe laying works for drinking water or drainage purposes / irrigation works / infra works, etc., on a contract basis, with more than two years of profitable operations.
  • The contractors with a good reputation, standing and track record alone should be considered. Minimum rating at the entry level shall be KVB BB (i.e.,) score of 51 and above. The fund based working capital limits (the peak level deficit in the cash flow statement) and non fund based limits put together generally shall not exceed 10 times the net owned funds (NOF) of the entity.
Nature of facility
  • SOD-RE – The assessment is based on the Cash Budget System. The sanction of the limit will be based on the peak level of the cumulative cash deficit derived from the projected cash flow statement. The withdrawals will be restricted to the deficit in the monthly cash flow statements. The acceptance of the projected cash flow statement will be based on the actual cash flow statements for the earlier years and the justified financial requirement.
  • HPL(M) – For purchase of machinery.
  • As construction equipment of any make can be financed under this new product, the existing “KVB – JCB CONSTRUCTION EQUIPMENTS SCHEME” stands withdrawn.
  • Non-fund based limits – ILC / BG (Bid Bond guarantees / Performance guarantees / financial guarantees).
Purpose
  • SOD-RE – For working capital purposes.
  • HPL(M) – To purchase new or second hand machinery (not older than 3 years).
  • ILC – For the purchase of raw material / machinery.
  • BG – To enable the contractor to secure contracts.
Validity / Tenor
  • SOD-RE – Running account and renewable once in 12 months.
  • BG / ILC – Running facility and renewable once in 12 months.
  • ILC shall be sanctioned with tenor not exceeding 120 days for purchase of materials and 180 days for purchase of machinery. The tenor shall be based on the operational cycle.
  • HPL(M)- Maximum 6 years (excluding holiday period & holiday period should not exceed 1 year) depending upon cash flows / DSCR.
Limit
  • SOD-RE - Minimum of Rs. 15 Lakhs and Maximum of Rs. 500 Lakhs.
  • HPL(M) – Maximum Rs. 500 Lakhs
  • Non-fund based – Maximum of Rs. 1,000 Lakhs. Funded and non-funded limits put together should not exceed Rs. 2,000 Lakhs.
Margin
  • SOD-RE – 40% on Primary Security.
  • HPL(M) – 25% on value of machinery, in case of second hand machinery 50%.
  • BG / ILC – 15% cash margin.
Primary Security
  • SOD-RE – Equitable Mortgage on Land and/or Building other than agriculture property (with security coverage of 167%).
  • HPL(M)- Machinery purchased out of bank finance.
  • BG / ILC – Hypothecation of entire Current Assets including Stocks and Book Debts.
Collateral Security
  • SOD-RE – Hypothecation of entire Current Assets including stock and book debts of the borrower, both present and future.
  • HPL(M) / BG / ILC – Equitable Mortgage on Land and/or Building other than agriculture property. Minimum collateral security coverage shall be 100% (excluding cash margin) as per the scheme. (No relaxation will be permitted).
  • However, the branches and DOs shall endeavour to get 125% collateral security coverage (excluding cash margin).
  • If immovable properties are not sufficient to cover the required margin, Term Deposits / NSCs / Life Insurance Policies (all or any of them) may also be accepted to cover the difference amount. However, third party instruments are not acceptable.
  • Third party properties may be accepted as per credit policy provisions.
Guarantor/s Partners of the firm / Directors of the Company / Title holders of the immovable property given as security and Husband of Lady Guarantors / Proprietrix / Lady partners as per credit policy provisions.
Interest Rate
  • The applicable Rate of Interest (ROI) is linked to the Credit Score / Rating.
  • For details please refer the section on Interest Rates.
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