LOAN FOR EXPORTER E

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Information about financial schemes provided to exporters  

Banks provide several types of loans and financial schemes approved by the government to exporters. The main ones include:

• EPC (Pre-shipment Loan),  
• PCFC (Pre-Shipment Credit in Foreign Currency)  
• CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)

EPC/PCFC  

As the name suggests, these loans are given to cover expenses incurred in manufacturing export goods, such as purchasing raw materials, labor costs, packaging of finished goods, etc.

EPC is provided in Indian Rupees, whereas PCFC is provided in foreign currency.

This is essentially a type of OD (Overdraft) limit product, so you are not required to regularly submit stock and debtors statements to the bank, which are required in a CC (Cash Credit) limit.

In EPC, the interest charged follows the standard Indian method, but you can benefit from an interest subsidy of 2.75%, which is announced by the government from time to time. For example, if your bank is charging 7.50% interest, then your effective rate would be 4.75%.

In PCFC, the interest calculation is usually based on SOFR, and since the SOFR rate is 3.65%, the bank may add its margin and charge around 5% interest.

To obtain an EPC or PCFC limit, you first need to apply to your bank. Once the limit is approved, the bank will provide it under EPC and PCFC. Whenever you want to utilize the limit, you must apply to the bank, and the amount will be credited to your account.

Here, EPC is credited in Indian Rupees, while PCFC is given in foreign currency. Therefore, you will need to convert the foreign currency into Indian Rupees, and you will have to pay conversion charges for that. However, when repaying, no such charges are required because the foreign currency will be directly credited back into the PCFC limit.

An important point to note is that since these limits are provided for export purposes, the repayment must be made from export earnings. If you are unable to repay the loan from export income, the bank may levy additional charges, and the process will be handled separately.

CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)  

The CGTMSE loan scheme has been jointly established by two government bodies of India: the Ministry of Micro, Small & Medium Enterprises (MSME) and the Small Industries Development Bank of India (SIDBI).

The biggest feature of the CGTMSE loan scheme is that you do not need to provide collateral (property) to a bank or NBFC. Therefore, it is beneficial for entrepreneurs who do not own property or cannot pledge their assets for any reason.

This loan scheme is suitable for small and new businesses.  

You can get a loan ranging from ₹5 lakh to ₹10 crore.  

To avail of this loan, you need to approach a bank or NBFC and submit the following documents:

Aadhaar Card  

PAN Card  

Address Proof  

ITR Copy  

Bank Statement  

Business Registration  

Financial Documents  

There may be additional documents required depending on the lending institution.

The interest rate depends on the bank/NBFC and the borrower’s profile, generally ranging from 8% to 14%.

Points to note:

There is no government subsidy or interest concession in this scheme. Additionally, some extra charges apply, such as an Annual Guarantee Fee, which may range from 1% to 2%. Therefore, before taking the loan, you should get complete details of all charges from the lending bank or NBFC.  

Also, if you already have an existing loan running in your firm, it cannot be converted into CGTMSE.

This is general information and ROI and loan Condition , Eligibility , Product and any other related to loan  may change from time to time . For complete details, you can click on the image provided below to get more information.

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