Availing Seed Fund

 

The processing of seed capital involves:

  1. A company desirous of getting seed loan may submit an application for seed fund after three months of incubation at SIIC.

  2. The seed loan will be sanctioned based on the eligibility criteria as decided by SIIC. It would also be subject to the terms stipulated as per the Seed fund Guidelines of SIIC. One of the criteria for approval of the seed loan will be the contribution brought in by the promoters to the capital of their companies. Preference will be given to the companies who already have some sources of revenue or some customer order booking.

  3. The final decision regarding it will be announced within a month. SIIC will have the sole discretion to sanction or reject an application for seed loan and the decision of SIIC in this regard shall be final. SIIC is not bound to give any reason in case an application for seed loan is rejected.

  4. The applicant would then enter into a Seed Fund Agreement with the Institute.

  5. After execution of agreement, the funds will be transferred to the project account within 10 days. Both the company’s CEO and the SIIC coordinator will be in charge of the bank account.

  6. Though seed loan may be sanctioned at the time of approval of the proposal for admission, disbursement shall be subject to SIIC Head's satisfaction over the suitable progress made by the company. Notwithstanding anything contrary contained herein, the Seed fund sanction and disbursal shall be governed by Seed Fund Guidelines of SIIC.

  7. The company will be subjected to regular performance reviews.

  8. Repayment Options: The repayment options have been decided by a committee comprising members from the grant agencies, IITK, Industry Experts, CA & legal consultant.

Option I:

Full amount would be paid back with an interest, which will be prime lending rate of SBI (on the date of sanction) less 4% and remains fixed for the tenure of the loan.

Option II:

50% of the total seed fund sanctioned will be interest free loan; repayment would start after 18 months from the date of first disbursement.

50 % of the seed fund sanctioned would be convertible into equity (@ 4% equity against loan up to ₹ 5 lakh).

Option III:

75% of the total seed fund sanctioned will be a loan and will be paid back with an interest of PLR less 6%.

25% of the seed fund sanctioned would be convertible into equity (@ 2% equity against loan up to ₹ 5 lakh) at par.

 

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