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Financial Products

Tourism Project Financing

TFCI provides all forms of financial assistance for new, expansion, diversification, renovation / modernization projects in tourism sector services sector and related activities, facilities and services.

Tourism Projects

Hotel Hotels & Resorts Service Apartments
Hotel Restaurant Chains
Hotel Theme / Amusement Parks
Hotel Multiplexes and Entertainment Centers
Hotel Education and Sports
Hotel Rope-ways / Safari Parks
Hotel Convention Halls
Hotel Travel and Tour Operating Agencies

Types of Financial Assistance

  • Rupee Loans (including short-term, medium-term & long-term loans).
  • Rupee Loan for corporate purpose (including against security of listed shares and immovable properties).
  • Subscription to equity / debentures.
  • Guarantee of deferred payments.
  • Advance against Credit Card Receivables.
  • Takeover financing or Refinancing.
  • Bridge Loan.

Norms for Financial Assistance

TFCI normally considers financial assistance to projects with capital cost of at least Rs.20 crore, but for providing financial assistance to heritage hotels, restaurants, food courts, pubs, tour operators, travel agents, transport sector, health spa / centers, recreational facilities and renovation / upgradation / expansion, lower project cost could also be considered depending on the nature of the project, past track & credit record, commercial viability and the prevailing Govt. policies for development of tourism in the area / region. In addition, credit facilities for working capital and against credit card receivables could be considered for smaller amounts based on requirement of the borrower with satisfactory credit record.

TFCI will provide assistance to profit-making companies with satisfactory credit record. In case of rated companies, the minimum rating should be ‘BB’.

Core Promoters’ Contribution:
The minimum core promoters’ contribution is 30% of the project cost. Relaxation is allowed upto 25% in respect of large projects involving capital cost, exclusive of the cost of land for the project, of more than Rs.100 crore.

Norms for Financial Assistance for Takeover Financing:

TFCI may consider financing well-established concerns having 3 years’ of satisfactory credit record for refinancing of existing loans and / or takeover / refinancing of loans of tourism-related viable / potentially-viable projects on the basis of the following:

  • Such loans should be ‘standard asset’ in the books of the existing lender(s) and should be substantially taken-over or refinanced.
  • The average DSCR for the proposed project / concern should be at least 1.5 and the account should not be irregular with existing lender(s).
  • All other norms for financial assistance as debt-equity ratio, promoters’ contribution, repayment schedule taking into account project life cycle and cash-flows, applicable interest rate etc. may be observed.

Debt-Equity Ratio

TFCI generally extends term loan assistance based on debt-equity ratio not exceeding 1.5:1 and in case of existing or assisted companies / entities on debt-equity ratio of 2:1. Higher debt-equity ratio upto 2:1 might be considered for new companies / entities, depending on debt-servicing capacity of the project.

Security

  • First charge on movable and immovable fixed assets.
  • Personal Guarantees of the Promoters and Corporate guarantee of the group concern, if necessary.
  • Pledge of promoters' share-holding.
  • State / Central government or bank guarantee or charge assets for state and central sector entities, while charges on project assets for others.
  • Where project assets cannot be mortgaged / hypothecated, charge on the cash flows through escrow mechanism and annuity system may be taken.
  • Tripartite Escrow Agreement among the borrower, TFCI and other lenders in case of state and central sector entities while Trust and retention Account mechanism for others.

Repayment Schedule

The repayment of the loan shall be over a period of 8-10 years after allowing moratorium upto 2 years from the date of commencement of commercial operations. However, in case of multiplexes / entertainment centers, the repayment of the loan shall be over a period of 6-7 years including moratorium period.

Rate of Interest

TFCI charges floating rate of interest on loan(s) linked to its base rate which is presently as hereunder:

11.60% p.a. for loans upto 3 years

11.70% p.a. for loans having maturity of 3-5 years

11.80% p.a. for loans having maturity above 5 years

The applicable interest rate is worked based on rating of the borrower either from an approved external rating agency or through internal rating mechanism.  The loans are considered to borrowers upto minimum rating of 'BB'. The applicable interest rate matrix for eligible borrowers, based on external or internal rating, is as follows: 

Based on Internal Rating Based on External Rating
Rating by TFCI [Internal] Applicable Interest Rate External Rating Agency [External] Applicable Interest Rate
AAA Base Rate AAA Base Rate
AA Base Rate + 0.20% p.a. AA Base Rate + 0.15% p.a.
A Base Rate + 0.50% p.a. A Base Rate + 0.30% p.a.
BBB Base Rate + 0.75% p.a. BBB Base Rate + 0.50% p.a.
BB Base Rate + 1.25% p.a. BB Base Rate + 1.00% p.a.


  • In case of loan to real-estate sector, an additional premium of 100 basis point shall be charged.
  • In case of consortium lending rate charged by other lenders subject to minimum of TFCI base rate shall be charged.
  • Credit Policy 2016-17

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