Corporate Funding

Corporate Funding

Corporate Funding

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Foreign Currency Term Loans (FCTLs or FCLs)

 

What are FCTLs/ FCLs?

These are Term Loans, denominated in foreign currency, the repayment of principal and interest also being in foreign currency. These are loans taken to fund a new project, expansion, purchase of fixed assets like plant and machinery, etc.  These loans come with specified term (period) of repayment, usually between 3-7 years.  The installments are usually payable every quarter, though other periods like monthly, half yearly can be negotiated.  FCTLs/ FCLs are similar to External Commercial Borrowings (ECBs), however, the difference is that while ECBs are directly negotiated with overseas lenders, FCTLs are negotiated and contracted by large, Indian banks and distributed to local, Indian companies.

 

Who is Eligible?

All business organizations, proprietary, partnerships, private and public limited companies are eligible.  A good business track record is desirable.  In order to avail this the project should involve significant imports; The loan should be    for a new project (me replacement of costly Indian debt by cheaper foreign debt is not permitted by RBI);   The project should have reasonable foreign currency earnings, say by way of exports!                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

 

Interest Rates

Why should an Indian enterprise opt for an FCTL? The reason is that interest rates are lower (presently 5-6%). Further, the foreign exchange risk, which is inherent in a foreign currency loan is usually hedged, which costs another 2-2.5%. Including the Indian bank’s profit margin, the overall cost of borrowing presently comes to about 9%, which is still cheaper by a good 25%, compared to a

 

Minimum Size of TLs we can handle:

o         Proposals from National Capital Region (NCR) of Delhi: Minimum:  Any Size; Maximum:  Any Size

o         Other cities/ towns of the Northern Region: Minimum 10 Cr, Maximum: Any Size

o         Other cities/ towns of Rest of India: Minimum 25 Cr, Maximum: Any Size

 

 

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Professionals

 

Tel: 0124-4386541, 4105424; Cell:  P.Anand (Director) 09312636681, Suresh Sharma (Sr. Associate) 09310636681.

anand  @ acebuiss.com   /  sales  @  acebuiss.com

                                                                                                                      

SERVICE, ANYWHERE IN INDIA, AT YOUR DOORSTEP

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