Ujjivan Small Finance Bank

Choose the right product

• Loan against property: a term loan for a business that can offer property as security. Pick the variant whose tenure fits your repayment plan.
• Working capital: funding for day-to-day needs. Overdraft interest is charged only on the amount you draw.

Prepare these documents

• Business registration proof: GST, MSME or Udyam registration, a shop and establishment registration or a trade licence.
• Bank statements: the bank asks for 12 months of statements for the operating accounts, and for the account the loan EMI is debited from.
• Income tax returns: the latest two years for a loan against property, except for the banking programme.
• Identity and address proof: for every applicant and co-applicant, with a signed application form.
• Premises proof: title documents or revenue records for property-backed loans.

What the bank checks

• A business visit report, jointly signed by the business and the credit team.
• Bureau reports for the borrower and any guarantors.
• For a balance transfer, a copy of the sanction letter or a statement of account for the existing facility.

Ujjivan Small Finance Bank is a small finance bank with its head office in Koramangala, Bengaluru, Karnataka. It began banking operations in 2017 and describes itself as a scheduled bank under the Reserve Bank of India Act, 1934. For founders and business owners, the part of the bank that matters is its MSME lending, which it offers to micro, small and medium enterprises.

What the bank lends to businesses

The bank's MSME Loans page groups its business lending into families. Two of them suit a growing business that needs funding: loans against property, and working capital. The page says the loans are for any small or medium enterprise business need, and that the bank aims to finance the specific needs of the enterprise. Supply chain finance is also listed, but it is written for dealers, distributors and suppliers linked to an anchor company, so this page does not cover it.

Loans against property

The loan against property family includes a Secure Business Loan, a Secure Enterprise Loan, a Business Edge Term Loan, a Loan Against Rent Receivable, a Prime LAP Semi-Formal and an Elite LAP, along with a CGTMSE Term Loan. Each variant has its own loan range and interest rate on the page. The stated tenures run from 12 to 180 months, depending on the variant. The bank says a loan can help a business grow an existing operation, or pay off an earlier loan taken at a higher interest rate.

Working capital

The working capital page lists fund-based and non-fund-based facilities for working capital needs. These include a working capital overdraft or cash credit, a bank guarantee, a working capital facility backed by a fixed deposit, and a drop-line overdraft with term loans. The page also lists a business edge overdraft, an overdraft against property and a CGTMSE overdraft facility. The bank says it charges interest only on the overdraft amount a business uses. Stated tenures run up to 12 months for the overdraft, up to 84 months for bank guarantees, up to 120 months for fixed-deposit-backed facilities, and up to 10 years for the drop-line facility.

What to check before you apply

The product pages list charges on top of the interest rate. These include documentation charges, processing fees, stamp duty on the loan and security documents, and CERSAI charges on the security. The bank also says other charges, prepayment and pre-closure charges and penal interest apply as set out in the sanction letter, so ask for the full schedule before you accept a loan.

Who can apply

The bank's document checklist covers proprietorship concerns, partnership firms, one person companies, companies, limited liability partnerships and self-employed professionals with a relevant degree or qualification. The pages state no incorporation requirement. For working capital, a facility is based on the borrower's financials, GST or banking.

How to apply

The MSME Loan application form on the bank's website is the way in. The bank says the paperwork is simple. The documents depend on the product, but the checklist covers business registration proof, bank statements, GST returns, identity and address proof for the applicant and any co-applicant, and income tax returns. Property-backed loans also need proof of ownership of the business premises.

Background

The bank grew out of Ujjivan Financial Services Limited (UFSL), which began as a non-banking finance company in 2005. After it received a licence from the Reserve Bank of India, UFSL set up the bank, which began banking operations in 2017. The bank describes itself as a mass market bank that serves unserved and underserved segments through financial and digital inclusion. It is a listed company.

Locations

The head office is in Koramangala, Bengaluru. The bank lists its branches, ATMs and cash deposit machines on separate Locate Us pages.