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    Table of Contents

    The Rupee Term loan is a financial instrument introduced by the North Eastern Development Finance Corporation Ltd. (NEDFi). Established under the Companies Act 1956, NEDFi’s primary goal is to support the Micro, Small, and Medium Enterprise (MSME) sectors in north-eastern states of India. Apart from this, it provides a wide range of financial schemes and products to uplift the MSMEs of this region, including the Working Capital Term Loan scheme, Corporate Finance scheme, Equipment Finance scheme, Loans for Artisans, etc. This includes Sikkim, Arunachal Pradesh, Assam, Meghalaya, Nagaland, Manipur, Tripura, and Mizoram. Here, in this article, we’ll help you understand better what is the meaning of a Rupee term loan, its objectives, eligibility criteria and more.

    Business Loans

    What is RTL?

    The full form of RTL is a Rupee Term loan and is specifically designed to provide medium to long-term financial assistance, facilitating the establishment, expansion, diversification, and modernisation of projects in the manufacturing and service sectors within this region.

    Features of the Rupee Term loan scheme

    Here are some of the features of RTL in India

    • A maximum financial support of up to 12% per project.
    • Provision for loans exceeding ₹10 crores for individual projects.
    • Flexibility to adapt the loan as per specific project needs.
    • Competitive interest rates pegged at a Prime Lending Rate (PLR) of 3% p.a.
    • A Debt Equity Ratio maintained at 1.85:1.

    Objective of the Rupee Term Loan scheme:

    The scheme supports the north-eastern regions of the country by facilitating medium to long-term financial and uplift their economic stability. Below-mentioned are the key objectives of the RTL scheme:

    • Facilitate the establishment and growth of new and existing businesses in the north-eastern states of India.
    • Aid in the expansion, diversification, and modernisation of projects within the manufacturing and services sectors.

    Moreover, the RTL scheme is designed to be flexible, ensuring that loans can be tailored as per specific project requirements. Additionally, it promotes lowered capital investments by investors and offers competitive interest rates.

    Who can apply?

    The eligibility criteria to apply for the Rupee Term loan scheme involves:

    1. The proposed unit seeking financial assistance must be situated within any of the eight north-eastern states of India.
    2. Proceeds from the term loan should be utilised for creating fixed assets that will generate revenue for the unit.
    3. The unit should operate within the manufacturing or services sector.
    4. These units must be duly registered with the GST authority.

    Note– These are the primary eligibility requirements to consider when applying for the RTL scheme. It’s always recommended to consult with the sanctioning authority or official guidelines for any additional specifics or recent updates.

    Advantages of the Rupee Term Loan (RTL) scheme:

    Here are some of the advantages of the scheme:

    • Loans can be designed based on specific project requirements.
    • For every project, there’s a provision of up to 12% financial support. Further, financial support of more than ₹10 crores is available for eligible projects.
    • Loans come with a Prime Lending Rate (PLR) plus a maximum spread of 3% annually.
    • A minimal upfront charge of 1% for loans up to ₹10 crores and 0.75% for higher amounts.
    • There are flexible security requirements. Depending on individual cases, both primary and collateral securities might be considered.
    • Borrowers have an extended repayment period ranging between 5-8 years.

    Financial loan products and schemes under NEDFi

    Loan for existing & new businesses

    Objective: To provide financial support over a medium to long-term period for businesses aiming to start, grow, diversify, or update their operations in the manufacturing or services sectors.

    Who can apply

    • Entity: Sole proprietors, Private Ltd. companies, partnership firms, LLPs,
    • Business types: Manufacturing, services and trading
    • Type of unit: New and existing businesses.

    Eligibility criteria:

    • A photo ID and address proof.
    • Proof of business: It includes a business licence, company papers, tax papers, and partnership agreement.
    • Any other additional information may be required when you apply.

    Features of the scheme:

    Business Loan
    • Rate of interest: at least 7%
    • Repayment period: up to 84 months
    • Loan Type: Term loan (fixed time)
    • Upfront charges: 1% of the loan amount

    Security required:

    • They get first rights on your business’s fixed assets
    • They can claim your business’s current items
    • Include the promotor’s personal guarantee
    • Additional security as per availability

    Working Capital loan scheme

    Objective: To provide one-time financial assistance as a term loan for existing trading businesses that need key funds to run day-to-day operations.

    Who can apply

    • Business Types: Open to Sole Proprietors, Partnership Firms, LLPs, and Private Limited Companies.
    • Location: Must be based exclusively in North East India.
    • Business Status: Only for businesses that are already up and running.


    Required documents:

    • Personal details: Photo ID and address proof in line with the RBI’s KYC guidelines.
    • Business verification: Trade License, MOA & AOA, GST Registration, Income Tax Return, Partnership Deed, and any other related documents as needed.
    • Note: More documents might be asked for during the loan application, based on specific needs.

    Features of the scheme:

    • Rate of interest: at least 8%
    • Repayment period: up to 84 months
    • Loan type: Term loan (fixed time)
    • Upfront charges: 1% of the loan amount

    Security requirements:

    • Assets: Current assets of the business will be pledged as collateral.
    • Guarantees: Personal commitment to repay by the main business owner(s). Besides, if there are group companies, their corporate guarantee might be needed.
    • Additional collateral: More security might be needed based on what’s available and required.

    Note: For more updated details, always check directly with NEDFI for full details by visiting- https://www.nedfi.com/.