Sunday, 27 December 2015

Factory requirements

For an entrepreneur, to ensure the availability of the raw material for production is very important. The selection of the factory site has to be near the place of the availability of raw materials. The factory site has also to be near the electricity sub station in village areas to get constant power supply. It should preferably be near the market for your products also.

There are two types of loan. They are term loan and working capital loan.

The term loan is given on the machinery that you require for your industry.

The working capital requirements will include the daily recurring expenditure to run your factory that is how much you need to meet your daily expenses to run your business. You should arrange for at least three months of this recurring expenditure from banks or any other source. It is very important aspect of your business. If you need to raise this money from banks then do not wait to raise it afterwards but you should arrange it for at the time of getting term loan . The term loan and working capital loan should be financed together for smooth running of your factory. If you have been able to get the term loan from a financial institution and need to take out working capital loan from another financial institution then you can carry the approved letter for the term loan on machineries to the banks or other financial institutions.

The entrepreneur may also have to apply for a No Objection Certificate (NOC) from the Pollution Board.

In taking loan from a financial institution, you may have to show a Provisional Registration Certificate (PRC) that you obtain from District Industries Centre (DIC). You submit your Industry Scheme to DIC office for approval and after its approval you are granted a Provisional Registration Certificate which is valid for upto 5 years. This certification helps in getting N.O.C. also. You get a Permanent Registration Certificate after coming into production from DIC.

An entrepreneur needs to have a Provisional Registration Certificate, a project proposal and his/her dynamism while approaching the banks for loan.

The entrepreneur has to apply for the electricity connection from the State Electricity Board and the representative from the electricity board at the time of giving electricity connection comes for inspection of the site. The representatives from financial institution along with the representative of the supplier of machinery also comes for inspection of the site/machines after the delivery of the machines and also in the case of the supply of defective machines.

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