KSIDC - Bill Discounting Loan
The KSIDC Bill Discounting Loan Scheme is a working capital support scheme implemented by the Kerala State Industrial Development Corporation (KSIDC) under the Government of Kerala. The scheme is designed to provide short-term finance through discounting of bills arising from genuine trade transactions with Government Departments and Public Sector Undertakings (PSUs). It helps eligible contractors and firms manage cash flow delays caused by payment cycles in government projects. The scheme is currently active and applicable across Kerala.
Key Features
- Bill discounting only for Government / PSU receivables: Finance is provided only against bills that arise from genuine trade/work transactions with Government Departments or PSUs. Private sector invoices are not the basis for this product.
- Applicant type and minimum experience requirement: Only a corporate entity or partnership firm with minimum three years of relevant experience in civil/mechanical/engineering works or similar eligible business can apply. Pure trading activities are excluded.
- Mandatory certification / support from authorised agencies: The proposal must be supported by a certificate from authorised agencies such as PWD, KWA, etc., validating the firm’s eligibility and the nature of work/transaction.
- Funding linked to contract value with defined exposure control: KSIDC restricts the total exposure by linking it to the contract/purchase value and applying defined caps on how much can be outstanding at a time. This ensures financing remains proportionate to the approved work value.
- Floating interest rate structure: The interest rate is specified as floating under this product. The applicable rate may change based on KSIDC’s lending conditions and the sanction terms.
- Strong security and payment-routing mechanism: The loan is secured through personal guarantees, agreements/POA, and a tripartite arrangement so that bill proceeds can be received directly from the issuing Government/PSU authority towards loan recovery.
Financial Assistance
Eligibility Criteria
Who can apply:
- Corporate entities or partnership firms
- Minimum 3 years’ experience in civil, mechanical, engineering, or similar works
- Firms executing works for Government Departments or PSUs
- Contracts supported by certification from authorised agencies such as PWD, KWA, etc.
Who cannot apply:
- Trading-only businesses
- Firms without minimum experience requirement
- Contracts not backed by Government / PSU work orders
- Proposals not meeting KSIDC appraisal norms
Documents Required
- Company / partnership constitution documents
- Government / PSU work order and contract agreement
- Experience certificate from authorised agency (PWD, KWA, etc.)
- Bills raised for executed work
- Personal guarantee documents of partners/directors
- Power of Attorney and tripartite agreement documents
Application process for the scheme
Option 1: Apply with Bullit (Recommended)
Start instantly with our guided application support, where our team verifies eligibility, prepares documentation, and coordinates with the Industries Department on your behalf. Using our business loans and compliance calendar, you can track progress while focusing on project execution, we manage the application end-to-end.
Recommended for: Firms handling multiple government contracts.
Option 2: Apply Directly through KSIDC
- Submit proposal with contract and bill details to KSIDC
- KSIDC evaluates eligibility, experience, and contract value
- Execution of required agreements, POA, and guarantees
- Tripartite agreement signed between firm, purchaser, and KSIDC
- Bill amounts routed directly to KSIDC as per sanction terms
Power combo with the scheme
Related Schemes
Frequently asked questions
What is the purpose of the KSIDC Bill Discounting Loan?
The scheme provides working capital by discounting bills raised for work done for Government departments or PSUs. It helps businesses manage cash flow while waiting for payments from public authorities.
Who is eligible to apply for this loan?
Corporate entities or partnership firms with at least three years of experience in civil, mechanical, engineering, or related works executed for Government or PSU bodies are eligible, subject to certification from authorised agencies.
How much finance can be availed under this scheme?
Financial assistance ranges from ₹200 lakh to ₹500 lakh, with total exposure limited to 80% of the contract value, subject to a maximum of ₹5 crore at a time.
What is the interest rate applicable?
The bill discounting loan carries a floating interest rate of 10.50%, as per KSIDC’s prevailing lending terms at the time of sanction.
What security is required for the loan?
The loan is secured through personal guarantees of partners or directors, execution of necessary agreements and POA with KSIDC, a tripartite agreement, and irrevocable authorization for KSIDC to receive bill payments directly.
Is this scheme applicable for trading businesses?
No. Trading activities are explicitly excluded. The scheme is meant for execution-based contracts involving civil, mechanical, engineering, or similar works for Government or PSU entities.