Indian Bank Collaborates With IIT-Madras To Fund Startups
To improve the budding Indian startup ecosystem, State-owned Indian Bank, in collaboration with IIT-Madras Incubation Cell (IITMIC), launched an initiative for funding startups.
IITMIC, under the initiative ‘IND Spring Board’, will refer startups with proven technology and established cash flows to the bank. IITMIC will also extend advisory to the bank on the business model.
Padmaja Chunduru, Indian Bank MD and CEO, said it is a known fact that banks find it difficult to fund startups. And as startups do not meet the requirements under traditional models of financing, this segment gets the required funds by seed capital or private equity from India/abroad.
She also said startups had to share profit and ownership of the company to venture capital firms, private equity players or angel investors for mobilising funds.
She added, “Debt was missing in the startup ecosystem, and entrepreneurs were missing this working capital finance and equipment finance.”
Now, the lender will extend loans of up to Rs 50 crore to these startups.
And, the startups can use the amount for their working capital requirements or purchase of machinery and equipment, among others.
Padmaja Chunduru said, under the initiative, loans up to Rs 2 crore are backed by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme of the government.
Need legal assistance for your startup? Just contact us.