What you get
Amount of Loan: | - The minimum loan size is ₹5.00 lakhs. | - The maximum loan size is ₹500.00 lakhs for Micro and Small Manufacturing Enterprises. | - ₹200.00 lakhs for manufacturing and allied services enterprises towards building, gross block of plant and machinery directly involved in production. The loan/s over and above these limits will carry contract rate of interest. | Rate of Interest: | - KSFC shall sanction loans with prevailing contract rate of interest and the promoters shall pay the interest accordingly. To avail the interest subvention under the scheme, the beneficiary / borrower shall be regular in repayment of installments of all the loans availed by the Enterprises from KSFC. The effective interest rate to be paid by beneficiary /borrower is the difference of contract rate and interest subvention of 5.5% p.a. reimbursed by Government of Karnataka. | Interest Subsidy [Subvention] Period: | - The unit is eligible for interest subsidy [subvention] for a period of 5 years from the date of first disbursement of the loan, even though if the repayment period extends beyond 5 years.
Who can apply
Required Paperwork
- Aadhaar Card
- PAN Card
- Income Certificate
- Residence Proof (Domicile)
Common Questions
Who is eligible to apply?
All categories of enterprises including proprietary concerns, partnerships, and companies that are making new investments in building, plant, and machinery for production purposes.
For how long is the interest subvention provided?
The 5.5% interest subvention is provided for a maximum of five years from the first disbursement.
Can enterprises that have availed of other subsidies apply?
No, enterprises that have already received interest subsidies under other schemes from the Government of Karnataka or the Government of India are not eligible.
What are the eligible uses of the loan under this scheme?
The loan can be used for investments in building, plant, and machinery directly involved in production.
Are SC/ST and women entrepreneurs eligible?
If they have already availed of subsidies from other schemes, they are not eligible for this scheme.
Is the purchase of land eligible for the loan?
No, the purchase of land from KIADB, KSSIDC, or any other government agencies is not covered under the scheme.
How is the interest subvention reimbursed?
The Government of Karnataka reimburses the difference between the contract rate and the 5.5% interest subvention.
What happens if I default on the loan repayment?
Enterprises that default on loan repayment will not be eligible to continue receiving the interest subvention.
Can loans be refinanced under this scheme?
No, refinancing or takeover of loans from other banks, NBFCs, or financial institutions is not allowed under this scheme.
What is the term of the loan repayment?
The loan repayment period depends on KSFC policies, but the interest subvention applies for up to 5 years.
What types of enterprises are not eligible for the scheme?
Businesses like trading, hotels, guest houses, restaurants, hospitals, commercial real estate, and certain industrial activities not eligible for incentives under the Karnataka Industrial Policy 2020-25.
Can I receive the loan for multiple projects?
Yes, as long as the total loan does not exceed the specified maximum limits and is for eligible uses.
Can I apply for both new and existing enterprises?
Yes, the scheme is available for both new and existing enterprises that are expanding or modernizing.
How do I ensure that I continue receiving the interest subvention?
You must maintain regular repayment of all KSFC loans to remain eligible for the interest subvention benefit.