Since the proposal under the CGTMSE does require that the collateral mortgage /guarantee must not be taken the preparation requires that the comfort of the banks should be ensured from the viewpoint of the security of the loan.
First of all we need to understand the shift of security. Under this facility the security is ensured by the government fund as an insurance to the loan. so you pay a percentage fee as an insurance of CGTMSE and you get the facility of loan without depositing the collateral security .
in case of default this fund can be used to cater to the recovery of loan. first of all the banks initiate the process of securitisation act proceedings and try to recover the loan. Once the process is started the amount that is ensured which is from 60% to 80% of the amount is sent to the bank by the institution.
so it is important that your proposal addresses this issue. such as
- The property that will be created as a primary security .
- Your background and understanding of the business you are going for
- the current market research and status of the business.
- understanding of the policies that are current related to this business
- The margins that you are going to imbibe should be calculated from the point of recovery process that is involved in this. so that you can assure the bankers.
if you prepare the proposal keeping in view the above points chances of success will definitely be positively increased.
