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Repayment of Loans: |
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Banks and financial institutions are extremely careful in selecting prospective entrepreneurs (borrowers) and ascertaining their creditworthiness before giving them loans.
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- The owner of a small scale enterprise is permitted to repay the loan amount in installments,
generally spread over a period of 8 to 10 years. These are determined by taking
into account the cash generation and profitability aspects of the project.
- Normally banks and financial institutions insist on repayment of the loan amount,
along with interest charges.
- The interim period normally permitted for repaying the instalments of the principal
amount varies from 12 months to 24 months from the date of the first release of
the loan.
- Before deciding the interim period, you should impress upon the banker the actual
development period involved in respect of his project and then start the repayments.
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