Uttar Bihar Gramin Bank Tractor, Harvester Loan for Non-Agricultural Use

Need heavy-duty muscle for your business—but not for farming? Whether you haul construction materials, run earthworks, manage logistics, or operate a hiring service, the Uttar Bihar Gramin Bank (UBGB) Non-Agricultural Tractor & Harvester Loan helps you acquire a new tractor, harvester, or allied machinery that earns from day one. Here’s a clear, no-jargon walkthrough so you can decide fast and borrow smart.

What this loan is for (Purpose)

A Term Loan to purchase new tractors/harvesters and related equipment for non-agricultural commercial use. Typical use cases:

• Construction and site logistics
• Material haulage (sand/brick/stone) and trailer operations
• Roadside maintenance, landscaping, utilities
• Hiring out tractors/implements as a paid service (as per techno-economic appraisal)

Important: The bank assesses utilization via hiring/contracting to ensure the machine will generate steady cash flows.

Who can apply (Eligibility)

You’re likely eligible if you:

• Are engaged in business operations (individuals and partnership firms are welcome)
• Are a permanent resident within the bank’s command area
• Do not have any loan defaults with banks/NBFCs
• Are ready to operate or hire out the machine as per techno appraisal (route/demand viability)

Bring basic KYC and proof that your business can deploy the machine effectively (contracts, route plans, demand letters, etc., if available).

How much you can borrow (Loan Amount & Margin)

• Financing up to 80% of the total asset cost (bank finances up to 80%; you bring 20% margin)
• Margin: 20% of the total cost (down payment/own contribution)

Example: Tractor + implements on-road cost ₹12.5 lakh → Bank may finance up to ₹10.0 lakh (80%); you bring ₹2.5 lakh (20%).

Pricing you can plan around (Interest Rate)

• Current rate: 13% p.a., applied monthly (subject to change per bank policy)

Quick EMI feel (illustrative, per ₹1 lakh)

• 5 years (60 months): ~₹2,275/month
• 7 years (84 months): ~₹1,819/month
• 9 years (108 months): ~₹1,575/month
  Your sanction letter will show exact figures for your loan and date.

Tenure, moratorium, and repayment

• Maximum tenure: up to 9 years, including moratorium
• Repayment: EMIs (equated monthly installments) after moratorium (if granted)
  A short start-up buffer helps you register, secure permits, and land initial contracts before full EMIs begin.

How funds are released (Disbursement)

• Direct to supplier/dealer by cheque/draft after documentation and hypothecation are in place. This keeps pricing and invoicing transparent and speeds up delivery.

Security & insurance (What you pledge)

• Primary security: Hypothecation of the financed tractor/harvester (bank’s charge is noted on the RC)
• Collateral security: As per scheme, collateral valued at about 2× the loan amount may be required
  • Example: ₹10 lakh loan → collateral worth ~₹20 lakh (as per policy/circular)
• Comprehensive insurance with bank clause is mandatory (consider add-ons like zero-depreciation and roadside assistance if your operations demand it)

Operational note: One key and a copy of the RC (with bank clause) remain in branch custody for security.

Must-have compliance (KYC & practical checks)

• KYC: PAN (or Form 60/61), ID/address proof, photographs
• Business proof: GST (if applicable), registrations, partnership deed (if any)
• Utilization evidence: Route plans, demand letters, hire agreements, or techno-economic notes that show viable monthly earnings

What “techno appraisal” really means (in plain words)

The bank wants to see how the machine will earn:

• Where will it work (routes, sites, clients)?
• What are the rates (per hour/shift/ton/km)?
• How many days/shifts per month can you operate?
• Monthly costs (fuel, driver, maintenance, tyres, insurance, permits) vs monthly receipts
  If your net surplus comfortably covers EMIs (with a safety cushion), your case is strong.

Step-by-step: from quote to keys

1. Get a dealer proforma invoice with on-road cost (machine + implements + RTO + insurance).
2. Meet UBGB with KYC, business details, and a simple cash-flow plan or contracts/LOIs.
3. Sanction: The bank sizes the loan (up to 80% LTV), sets rate/tenure, and confirms collateral.
4. Documentation & hypothecation; insurance with bank clause arranged.
5. Disbursement: Payment goes to the dealer; you take delivery and start operations.
6. Run & repay: After moratorium, EMIs begin; keep utilization high and downtime low.

Smart operating tips (so EMIs don’t feel heavy)

• Lock early demand: An anchor route/client (contractor, site, transporter) stabilizes cash flow from month one.
• Price for the real world: Quote rates that cover fuel, driver, tyres, insurance, permits, maintenance and EMI—don’t rely on best-case utilization.
• Stick to service schedules: Timely maintenance avoids breakdowns during peak demand.
• Track TCO, not just EMI: Factor in tyres, lube, filters, unforeseen repairs; build a monthly reserve.
• Insure smartly: Zero-dep and downtime coverage can pay for themselves on busy runs.
• Plan top-ups: After good seasons, part-prepay to cut tenure—small lumps can save a lot of interest.

Frequently asked (straight answers)

Is this for agriculture?
No—this scheme is specifically for non-agricultural commercial use.

What’s the maximum I can get?
Up to 80% of cost (you bring 20% margin). Sanction also depends on repayment capacity and collateral.

How long can I repay?
Up to 9 years (including moratorium), via EMIs.

Who receives the money?
The supplier/dealer, directly from the bank.

What collateral is needed?
In addition to hypothecation, policy requires collateral roughly equal to twice the loan amount (bank circular applies).

What about paperwork?
Standard KYC, business proof, dealer quote, insurance arrangements, and RC with bank clause (one key + RC copy stay with branch).

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Bottom line: UBGB’s Non-Agricultural Tractor & Harvester Loan gives you a straightforward path to own income-earning machinery: 80% finance, 20% margin, ~13% p.a. (monthly application), up to 9 years with moratorium, direct dealer disbursal, and strong risk cover through hypothecation, collateral, and insurance. Bring a solid route/demand plan and your KYC to the nearest UBGB branch—then put your new machine to work where it earns best.