KFC announces program for startups
The program, “KFC Startup Kerala”, will support startups at all stages of their growth, from proof of concept to prototype development, product testing, market entry, commercialization and deployment. At scale.
In addition, there will be a risk debt program and a provision to fund purchase orders received by startups.
Startups registered with the Kerala Startup Mission or the Department of Industrial Policy & Promotion (DIPP) and headquartered in Kerala will be eligible.
Viable projects with a scalable business model and high potential for job creation or wealth creation will be considered under the program.
The aid will be Rs 25 lakh for production, Rs 50 lakh for marketing and Rs 100 lakh for scaling up. This will be subject to 90% of the cost of the project at each stage.
The loans will be granted at concessional interest rates of 7% without any collateral. The repayment period will be 60 months including a moratorium period of 12 months maximum.
Startups must apply online at www.kfc.org. The processing will be centralized at the head office and the sanction will be examined by a committee of experts.
The scarcity of capital and the insufficient availability of credit facilities are the major problems facing startups. Start-up entrepreneurs should be encouraged with incentives and assistance on easy terms.
The government of Kerala in the budget speech declared a six point program to encourage startups. There are currently 3,900 registered startups in Kerala and the government’s plan is to add 2,500 more.
The loan will be extended to set up the workshop, buy the necessary machines, computers, servers, software, set up the infrastructure, buy raw materials, working capital, working capital, expenses costs, licenses, permits, consulting fees, marketing expenses, preliminary and pre-op fees, interest during the implementation period, etc.
The loans will be sanctioned as subsidized loans, with an option of conversion to equity, provided that KFC’s share does not exceed 30%.
Once startups get a firm purchase order, they are eligible for loans up to Rs 10 crore for order fulfillment. Entities subject to due diligence by a venture capital fund registered by SEBI may also obtain venture capital debt of Rs 10 crore.
This is the first program of its kind where all stages of startups are taken into account, with loans ranging from Rs 25 lakh to Rs 10 crore. KFC will provide mentorship and support to startups and there will be liberal exit options.