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www.pharmawc.com
www.pharmawc.com
Lowest Rate Working Capital for India Pharma

Frequently Asked Questions

How much is Loan Amount?

1. Loan Amount is linked to Monthly Sales Turnover of a Company for a given Distributor
2. Currently we are offering 2 months (or 60 days)

Example: If sales of Sun Pharma is average INR 25 Lakhs, then loan amount is INR 50 Lakhs


Do I Have to Break Relation with Existing Bank?
Not Necessary as this facility is offered is OVER & ABOVE existing collateral loan
However there is a process of intimation / approval which varies bank to bank – for existing bank

It is recommended to transfer your collateral backed loan to ICICI Bank for overall pricing benefit and better limit structure.


What is COR?
Corporate Opinion Report – Corporate provides the distributor details to ICICI Bank officially from Company which consists of:
  • Distributor Name, Address etc
  • Association with corporate
  • Last 12 months sales (Month on month)
  • Information about dealer payment track record
  • Limit recommendation

Above information is provided by the corporate on bank digital platform or through an E-Mail. 



Loan Charges - Up to ₹3 Crore Limit (Digital Journey)

  • Rate of Interest: 9.75% to 10.75%
  • Processing Fee:
    • 1st Time: 0.25% of the loan amount
    • On Renewal: 0.15% of the loan amount

Interest is calculated on day end balance like CC/OD and payable once in a month on date of debit.


Loan Charges -Above ₹3 Crore Limit (Physical Journey)

  • Rate of Interest: 9.75% to 10.75%
  • Processing Fee:
  • 1st Time: 0.25% of the loan amount
  • On Renewal: 0.15% of the loan amount
Interest rate and processing can be varied on case to case basis depending upon balance sheet and collateral


DistiGrow Charges Overview
DistiGrow will charge Program Management Fees of 0.25% recurring per year on sanctioned limit by company
DistiGrow charges include below services:
  • Bank Coordination
  • Onboarding Companies
  • Day to day Company Coordination
  • Fetching Corporate Opinion Report (COR)
  • Managing Enhancement Requests basis higher turnover
  • Technical Option to Request Delay in Payment (work in progress)

Is There Any Limit to non-collateral Loan?
Yes – upto Rs. 1 Cr per company and upto Rs. 3 Cr overall
Beyond this – Stockist will have to backup with Collateral
Non-collateral part can be > Rs. 3 Cr if collateral part is also done with same bank offering non-collateral.
Example:
  • 3 Cr Non-Collateral Bank A and 5 Cr Collateral Bank B.
  • 4 Cr Non-Collateral Bank A and 5 Cr Collateral Bank B – NOT POSSIBLE
  • 4 Cr Non-Collateral Bank A and 5 Cr Collateral Bank A – POSSIBLE 

Why no Cheque Hassles in Channel Finance?

A Channel Finance account is exclusively meant for purchasing goods from a company.
It should not and cannot be used for any other purpose.

Withdrawals by the distributor—whether in cash, by cheque, or through pledging—are not permitted.
The account is debited only when:

  1. The company sends a debit instruction (e.g. payment of an invoice on the due date), or
  2. The bank periodically debits the interest amount.

What factors determine the Interest Rate in India?

Interest rates vary on a host of factors including

1. CIBIL Score of Borrower (Company as well as individual CIBIL score of Partners / Directors)

2. Quantum of Loan (lower amounts are subsidized by government in many categories)

3. Repo Rate set by RBI

4. MCLR rate of Bank (varies by bank and current as well as 6 month forecast is shared generally by each major bank)

5. Nature of Loan - whether backed by collateral or not (Non-collateral loans come under Personal Loans) and Reason for Loan (Working Capital, Expansion etc)


What is interest rate offered?

Currently we have a tie-up with Multiple Banks

1. We are offering 9.5% to 10.5% for non-collateral loan which is lowest in Pharma Supply Chain

2. Interest Rate will be updated every quarter and be in range of MCRL + 1% to MCLR + 1%

3. Upto Rs. 3 Crore per Customer without collateral. Beyond that you may be asked to secure the same with marginal collateral

4. Quantum of Loan will depend on the average monthly turnover for the Principal company for which loan is being applied for and will update basis growth


Are there any Restrictions in Usage?

Since this is a Working Capital Loan by Bank and WITHOUT collateral there are certain restrictions in usage of the Current Account

1. No withdrawal by the Distributor - by cheque, cash, online banking or any other form

2. The amount has to be used only for stocking & giving credit to retailers of that particular company

3. Company will debit on due date or invoice payment date like currently it is doing in Cheque system

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