NPA Finance: Common Challenges Faced by Borrowers and Lenders
However, here are some general issues related to Non-Performing Assets (NPA) finance or funding:
NPA One Time Settlement with the Bank NBFC
How to Came out of NPA Status Permanently Click Here to fund your NPA Account NPA account is like a nightmare, but it is sure that one can pass this night also. Best way to pass this nightmare, to get a loan or finance or Takeover of NPA account in some other lenders company. But, people feel financing their NPA as the most hard thing as they never dealt this kind of situation before and they are also new to Loan process for NPA account. But, we will let you know, how you can came out of this NPA Status Permanently. Kindly focus on the following point : OTS or One Time Settlement with the bank/NBFC is the beneficial for borrowerOTS can be applied directly, without any external helpOTS Financing or Outstanding NPA Finance is a possibilityNPA account finance works in a way like: Transfer of NPA Account in new lenders CompanyTakeover of NPA Account can be done in a registered company & under RBI ComplianceYou require a financial consultant to help you in this financing, because he knows about this market and have ready contacts for this.Choose a Financial Consultant who is well versed & knowledgeable on the subjectGive him complete clarity of your case & provide all documents & information requiredMost important ; Take this funding as Bridge FundingTaking this financing, borrower get rid of the NPA Status instantly, but cibil score is still an issueBut, Track record or repayment of this new loan will improve your cibil also. Usually, cibil updates on every quarter. So it will take around a year to improve cibil score.Good repayment with this new lender is also very helpfulSecond Round of Finance : Now, after a year try for second round of funding in some regular NBFC or BankImproved Cibil score is very helpful in this second round of financing, while good repayment schedule will give confidence to this lender or NBFC/Bank in giving approval.In this second round, you can also get working capital at some good rates and different financial products needed in businessNow at this stage, you are permanently free of all NPA issues. Click Here to fund your NPA Account
Case Study- Takeover of NPA Account from ARC Company
Here, we are sharing case study of one of our client located in Mumbai. Client was running a business of manufacturing high class TMT steel bars of 550D. Business started in year 2011 and they were really doing the good turnover of Rs.210 cr in year 2015 with good margins. They also availed loan facilities from SBI(State Bank of India) to the tune of Rs.18.50 cr which increases year on year to Rs.45 cr. This loan was secured by the way of their Residential house property, factory land & building and other current assets of company. Click Here to fund your ARC Loan Account In the year of 2016-2017, China started a dumping price war in India and breaks the price from Rs.50 to Rs.30. After this china raw material pressure, Indian government impose anti- dumping duty for five years, which is now extended for another five years. But due to this price war of almost two years, business of our client immensely affected, turnover crashed hugely, which swaps away margins and due to this client was unable to service the bank loan and which ultimately slips in to NPA Account or their loans turns in to NPA account. And bank increases the outstanding amount of our client to Rs.55 cr including interest & other charges. After government impose of anti –dumping duty, business of client again started rising from 2019 and by the end of year 2021, they regain their sales to Rs.125 cr. And in the meantime, in year 2020 one of the premium ARC(Asset Reconstruction Company) take their account directly from the bank at some reduced prices. So, ARC company approached our client for repayment of this loan at some reduced prices. Therefore a new loan agreement is signed between ARC & our client. Hence loan amount now reduced, this benefits our client but, again as per RBI guidelines account in ARC company is still considered NPA. So client was unable to transfer his loan to some regular bank as no bank can takeover a loan from ARC Company. Client wanted to do so because he was badly required working capital for his business as previously he managed the working capital for business from his family personal savings or assets and also wanted to came out this NPA Status, which unable them to excel in business. After lots of fail trials with lot of banks & NBFC’s, client approached us with intention to transfer his NPA Account & requirement of working capital . We at Fund Source India, analysed client business & terms with ARC company and ensure the client that, we can do this takeover of NPA Account and additionally able to arrange some working capital as business required some funds to be infused at that time. We introduced one of our NPA finance company and put up all case facts in such a way that they immediately shows interest in the proposal. We arrange a one to one meeting of both parties and terms & conditions decided between both and after due diligence of around 45 days, this new loan was disbursed. Benefits of this new loan to client :-: NPA Account is closed directly by new company through direct RTGSSecurity documents transferred directly to this new NPA Finance CompanyA new repayment for 5 years is given to clientMoratorium of six months was also givenFreedom of liquidation of assets towards repayment( if required)A new repayment track is createdUpdate & improvement in CIBIL ScoreNow client can easily move to other bank for further funding options
