Venture Capital Fund for Backward Classes (VCF-BC)

Brief

A first of its kind Venture Capital Fund launched by Ministry of Social Justice and Empowerment, Government of India to promote entrepreneurship in India among the Backward Classes by providing concessional finance to them.

Eligibility

• The following are the eligibility criteria for prospective Companies promoted by Backward Classes entrepreneurs in the country for seeking assistance under the fund:
• The projects being set up in manufacturing, services sector, and allied sectors ensuring asset creation out of the funds deployed.
• Start-ups would also be eligible for finance as per the scheme guidelines.
• Women and disabled Backward Classes entrepreneurs will be preferred.
• Minimum existence and shareholding criteria:
• ✓ If assistance is below Rs. 50 Lakh - Companies having at least 51% stake holdings by Backward Classes entrepreneurs for the past 6 months with management control OR a new Company provided that the new Company is a successor entity of a Proprietary Firm or Partnership Firm or One Person Company (OPC) or Limited Liability Partnership (LLP) or any other establishment incorporated under any law in force, with the sound business model which has been in operation for over 6 months, and the predecessor entity had at least 51% shareholding of the Backward Classes promoters with management control.
• ✓ If assistance is above Rs.50 lakh - Companies having at least 51% stake holdings by Backward Classes entrepreneurs for the past 12 months with management control OR a new Company provided that the new Company is a successor entity of a Proprietary Firm or Partnership Firm or One Person Company (OPC) or Limited Liability Partnership (LLP) or any other establishment incorporated under any law in force, with the sound business model which has been in operation for over 12 months, and the predecessor entity had at least 51% shareholding of the Backward Classes promoters with management control.
• Documentary proofs of being Backward Classes will have to be submitted.

Fund / quantum

• Rs. 20 lakhs to Rs. 15 Crore Aggregate assistance not more than two times the current net worth of the Company.
• Investment under the fund will be categorized as follows: • Financial assistance upto Rs. 5 crore - Investment under this category shall be funded maximum upto 75% of the project cost and the balance 25% of the project cost will be funded by the promoters or through Government subsidy/grants under various schemes of central or state Government. In cases where Government subsidy is available, the promoters will have to contribute at least 15% of the project cost. • Financial assistance above Rs. 5 crore– Investment under this category shall be funded maximum upto 50% of the project cost. At least 25% of the project cost shall be funded by promoters or through Government subsidy/grants under various schemes of central or state Government, and balance 25% of the project cost can be funded either by promoters or by the bank or any other Financial Institutions as the case may be. In cases where Government subsidy is available, the promoters will have to contribute at least 15% of the project cost.

Benefit tags

• Funding

• Funding assistance from Rs. 20 lakhs up to Rs. 15 cr.
• Coupon - 6% p.a. (5.75% for women/ Divyang BC entrepreneurs)
• Investment Period in Company – Up to 10 years including moratorium upto 36 months.

• The following are the eligibility criteria for prospective Companies promoted by Backward Classes entrepreneurs in the country for seeking assistance under the fund:

• The projects being set up in manufacturing, services sector, and allied sectors ensuring asset creation out of the funds deployed.

• Start-ups would also be eligible for finance as per the scheme guidelines.

• Women and disabled Backward Classes entrepreneurs will be preferred.

• Minimum existence and shareholding criteria:

• ✓ If assistance is below Rs. 50 Lakh - Companies having at least 51% stake holdings by Backward Classes entrepreneurs for the past 6 months with management control OR a new Company provided that the new Company is a successor entity of a Proprietary Firm or Partnership Firm or One Person Company (OPC) or Limited Liability Partnership (LLP) or any other establishment incorporated under any law in force, with the sound business model which has been in operation for over 6 months, and the predecessor entity had at least 51% shareholding of the Backward Classes promoters with management control.

• ✓ If assistance is above Rs.50 lakh - Companies having at least 51% stake holdings by Backward Classes entrepreneurs for the past 12 months with management control OR a new Company provided that the new Company is a successor entity of a Proprietary Firm or Partnership Firm or One Person Company (OPC) or Limited Liability Partnership (LLP) or any other establishment incorporated under any law in force, with the sound business model which has been in operation for over 12 months, and the predecessor entity had at least 51% shareholding of the Backward Classes promoters with management control.

• Documentary proofs of being Backward Classes will have to be submitted.

• Rs. 20 lakhs to Rs. 15 Crore Aggregate assistance not more than two times the current net worth of the Company.

• Investment under the fund will be categorized as follows: • Financial assistance upto Rs. 5 crore - Investment under this category shall be funded maximum upto 75% of the project cost and the balance 25% of the project cost will be funded by the promoters or through Government subsidy/grants under various schemes of central or state Government. In cases where Government subsidy is available, the promoters will have to contribute at least 15% of the project cost. • Financial assistance above Rs. 5 crore– Investment under this category shall be funded maximum upto 50% of the project cost. At least 25% of the project cost shall be funded by promoters or through Government subsidy/grants under various schemes of central or state Government, and balance 25% of the project cost can be funded either by promoters or by the bank or any other Financial Institutions as the case may be. In cases where Government subsidy is available, the promoters will have to contribute at least 15% of the project cost.

Online / portal

Official application / information link: https://www.vcfsc.in/vcfbc/index.html

Source listing: https://www.startupindia.gov.in/content/sih/en/government-schemes.html