Thiruvananthapuram, Aug 10 (IANS): State owned Kerala Financial Corporation (KFC), the leading lending institution has come out with what is billed as the biggest financial support programme for funding up to Rs 10 crore for startups.
The Scheme, 'KFC Startup Kerala', will support startups in all stages of their growth starting from proof of concept to prototype development, product trials, market entry, commercialization and scaling up.
Furthermore, there will be venture debt scheme and provision to finance purchase orders received by startups.
Sanjay Kaul, CMD of KFC, said the assistance will be Rs.25 lakh for productisation, Rs 50 lakh for commercialization and Rs 100 lakh for scaling up.
"Loans will be provided at concessional interest rates of 7 per cent without any collateral. Repayment period will be 60 months including moratorium period of maximum 12 months. Startups need to apply online at www.kfc.org. Processing will be done centrally and the sanction will be considered by an expert committee," said Kaul.
"The scarcity of capital and inadequate availability of credit facilities are the major problems confronting startups. Entrepreneurs should be encouraged through incentives and assistance on easy terms", added Kaul.
Incidentally this bonanza comes close on the heels of the announcement made by State Finance Minister K.N. Balagopal in his maiden Budget speech.
At present there are 3,900 startups registered in the state and through this new programme Balagopal plans to add another 2,500 more in five years.
The loan will be extended to set up the workshop, purchase necessary machinery, computers, servers, software, setting up infrastructure, purchase raw materials, working funds, working capital, cloud expenses, licenses, permits, consultancy charges, marketing expenses, preliminary and preoperative expenses, interest during the implementation period.
The loans will be sanctioned as soft loan, with option to convert into equity capital, on condition that the KFC share shall not exceed 30 per cent.
Once the startups get a firm purchase order, they are eligible to get loans up to Rs 10 crore for executing the orders.
Those entities which have undergone due diligence by a SEBI Registered Venture Capital Fund can also get venture debt of Rs 10 crore.
"This is the first of its kind of scheme where all stages of startups are considered. KFC will provide mentoring and handholding to startups and there will be liberal exit options," added Kaul.