Equipment Refinance Scheme

What is the Equipment Refinance Scheme?

The Equipment Refinance Scheme is a specific lending scheme of the Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC), which runs under the Department of Industries and Commerce, Government of Puducherry. According to the PIPDIC schemes page, the scheme finances well performing small scale industrial units that want to buy identifiable items of equipment or machinery for diversification, modernisation, expansion or replacement, and also for balancing equipment.

PIPDIC, the Pondicherry Industrial Promotion Development and Investment Corporation Limited; was set up by the Government of Puducherry in 1974 with an authorised share capital of Rs 45 crore. PIPDIC works under the Department of Industries and Commerce and does two things: it develops industrial estates, growth centres and IT parks in the Union Territory, and it lends to entrepreneurs through a published set of loan schemes.

The Equipment Refinance Scheme is deliberately narrow. It is not a start-up loan and not a general purpose facility. PIPDIC is lending against a track record: a unit that has run for four years, made profit for two, declared dividend for two, and never defaulted, is a low-risk borrower, and the scheme lets such a unit re-equip itself without going back to first principles on appraisal.

Core features

• Need-based loan up to Rs 90,00,000.
• Money is tied to named, identifiable machines, each backed by a quotation.
• Four cumulative eligibility tests on age, profit, dividend and default.
• Interest on PIPDIC's standard slab card, from 10% to 12% a year.

Who is eligible for the Equipment Refinance Scheme?

You can apply if all of these are true:

• You own a well performing small scale industrial unit in the Union Territory of Puducherry.
• The unit has been in operation for the last four years.
• The unit earned a profit during each of the preceding two financial years.
• The unit declared a dividend during the preceding two financial years.
• Neither the unit nor its promoters have defaulted to any institution or bank.
• The purpose is the purchase of identifiable equipment or machinery for diversification, modernisation, expansion, replacement or balancing.

You cannot apply if:

• The unit is less than four years old. A newer unit should look at PIPDIC's general SSI scheme or the Single Window Scheme instead.
• The unit made a loss in either of the preceding two financial years.
• The unit did not declare a dividend in the preceding two years. A proprietary concern that does not formally declare dividend should raise this with PIPDIC before filing, because the condition is written into the scheme.
• The unit or promoter is a defaulter anywhere.
• The money is wanted for land, building, working capital or preliminary expenses. Those are financed under other PIPDIC schemes.
• You are an individual seeking a personal loan. This is an industrial credit product; individuals cannot apply for a personal benefit under it.

How much does the Equipment Refinance Scheme lend?

Because the ceiling is Rs 90,00,000, most sanctions under this scheme fall in PIPDIC's 12% slab. A unit borrowing Rs 60,00,000 at 12% should build that cost into the payback calculation on the machine before filing.

What are the interest rate and financial norms?

PIPDIC publishes a single rate card that applies across its lending schemes:

Units promoted by women, Scheduled Caste, Scheduled Tribe or differently abled entrepreneurs get a concession of 0.5% below the normal rate.

The investigation fee is 0.50% of the term loan applied for, plus service tax, where the loan is up to Rs 25,00,000, and 0.75% plus service tax above that. Scheduled Caste and Scheduled Tribe entrepreneurs pay half the investigation fee.

The debt-equity ratio expected is 2:1 for a loan above Rs 25,00,000, and 3:1 up to Rs 25,00,000.

Collateral security is required in the form of immovable property, over and above the mortgage or hypothecation of the assets being financed. Property inside the Union Territory of Puducherry must be worth at least the sanctioned loan amount. Property outside Puducherry must be worth at least 150% of the loan if it is land with a building, and at least 200% if it is bare land. For units promoted by women, SC, ST or differently abled persons the requirement is reduced to 50% of the loan amount. Valuation is done by chartered engineers and valuers on PIPDIC's approved panel, not by a valuer of the borrower's choosing.

What documents are required?

How to apply for the Equipment Refinance Scheme online

PIPDIC accepts applications only through its own portal at pipdic.in. There is no paper counter for fresh loan applications, and no agent is authorised to file on your behalf.

1. Open pipdic.in and click Login, then choose the New customer link. Enter a username, an email ID, a password and the captcha, and click Register.
2. Log in with the registered email ID. PIPDIC sends a one-time password to that email address; enter the OTP and click Login to reach the customer dashboard.
3. Open Edit Profile from the top right corner of the dashboard, complete every required field about yourself and the enterprise, and click Submit. An incomplete profile blocks the application form.
4. Click the Applications tab. A pop-up shows the checklist of general terms and conditions, the interest rate structure, the investigation fee and the collateral security norms. Read it, gather the listed papers, and click I Agree.
5. Choose the correct application form. PIPDIC publishes four forms: Up to 25 Lakhs, Above 25 Lakhs, Transport, and the Merit Loan Letter — and fill the multi-step form, completing every mandatory field.
6. Read the declaration, which covers the truth of the information, the absence of any unauthorised borrowing arrangement and consent to verification. Tick I agree to terms and click Submit.
7. Enter the bio-data of the promoter, partner or director on the screen that follows, and upload each KYC and supporting document using the Choose File button beside the field.
8. Pay the application fee: Rs 100 for a loan up to Rs 25,00,000 and Rs 200 for a loan above Rs 25,00,000. Online payment redirects you to a summary page before the debit.
9. Save or print the fee receipt generated after payment. Keep it, because it carries the reference PIPDIC uses when you call about the file.

How to check the status of a PIPDIC application

1. Log in to pipdic.in with the registered email ID and the OTP sent to it.
2. Click View My application on the dashboard.
3. Select the relevant loan application from the drop-down menu.

A freshly filed application shows as UNDER REVIEW. The status moves on as PIPDIC completes the technical appraisal, the site inspection and the valuation of the property offered as collateral. If the status has not changed for several weeks, call the corporation on 0413-2334361 quoting the application number on your fee receipt rather than filing a second application, since a duplicate file attracts a second application fee.

Why PIPDIC applications get rejected or delayed

• Profile not completed on the portal, so the application form never opens.

• Collateral property falls short of the prescribed value once PIPDIC's panel valuer files the report. A borrower who relies on a private valuation from outside the panel is the most common casualty here.

• Title defects: property that is jointly held without every co-owner joining the mortgage, or property with an unreleased earlier charge.

• Default with another lender. PIPDIC checks credit records, and an outstanding default against the promoter or a group concern stops the file.

• Missing or unreadable uploads of KYC and financial documents.

• Application fee unpaid. The file is not taken into appraisal until the Rs 100 or Rs 200 fee is received and the receipt generated.

• Activity outside Puducherry. PIPDIC finances units located in the Union Territory of Puducherry, covering the Puducherry, Karaikal, Mahe and Yanam regions.

• Dividend not declared in one of the preceding two years, which is an easy condition to overlook in a family-run concern.

• Generic machinery description. The scheme requires identifiable items, so a request for "plant and machinery" without make, model and price is sent back.

Key dates

The Equipment Refinance Scheme has no application window and no last date; PIPDIC keeps the form open all year. The only calendar that matters in practice is the audit calendar, because eligibility turns on the audited results of the two preceding financial years. A unit whose accounts for the last completed year are still unaudited should finish the audit before filing rather than submit provisional figures.

Whom to contact for help or a grievance

• Managing Director, PIPDIC, No. 60, Romain Rolland Street, Puducherry 605001 to phone 0413-2334361, email info@pipdic.com.
• General Manager (Administration), mobile 9894653835.
• Online grievance form at pipdic.in/grievance_form, which is the route that creates a written record.
• PIPDIC also holds virtual open house hearings for public grievances, notified on the portal.
• Department of Industries and Commerce, Government of Puducherry, is the administrative department above PIPDIC if a grievance is not settled by the corporation.

Filing an application on pipdic.in costs only the notified application fee. No official or intermediary is authorised to collect anything else for processing a file, and PIPDIC never asks for the OTP sent to your registered email.