ECB for start-ups has better norms on all parameters than regular ECBs by established companies, NBFCs, etc.
ECB facility for Startups:
A select category of banks are permitted to help startups to raise ECB under the automatic route.
This is any entity recognised as a Startup by the Central Government as on date of raising ECB.
MAMP is 3 years. It means you have to borrow with loan period of more than this in the loan contract. See the MAMP definition in main ECB service description on our site.
Types of loans:
The borrowing can be in form of loans or non-convertible, optionally convertible or partially convertible preference shares and many other variants.
The borrowing should be denominated in any freely convertible currency or in Indian Rupees (INR) or a combination.
Amount: The borrowing per Startup will be limited to USD 3 million or equivalent rupees per year.
It shall be mutually agreed between the borrower and the lender.
For any expenditure in connection with the business of the borrower. Not for real estate, further lending, etc.
Conversion into equity:
Conversion into equity is permitted in full or part, at the end or gradually.
Movable, immovable assets
Intangible assets (including patents, intellectual property rights), financial securities, etc.
Corporate or personal guarantee (no bank guarantee)
Desirable & not compulsory
Market rate as on the date of agreement.
Apohan provides end-to-end ECB procurement services from foreign lenders ( or existing equity investors in the start-up) who can pay the retention fees to Apohan & also have sufficient liquidity to carry out all the processes and expenses