AMF - FAQs
- What does AMF stand for?
AMF is an abbreviation for our product named “Alfalah
Milkiat Finance”
- What kind of financing facility does the Bank provide
under AMF?
AMF is a long term finance facility offered to the customers
for the following purposes
- AMF-1: Acquisition of rented commercial/ industrial
property by present tenant.
AMF-2: Construction on owned and possessed commercial/
industrial premises/ plot.
AMF-3: Purchase of constructed commercial/ industrial
property/Land.
AMF-4: Renovation of owned and possessed commercial /
industrial property.
Please note that all the four facilities shall be provided
solely to help SMEs improve and build business infra
structure. AMF shall not be provided for personal asset
building or for purchase or renovation / construction for
onward sale or rent purpose. The property shall be in the
name of the borrower
How is it different from similar products offered by
other commercial banks?
With the introduction of AMF, Bank Alfalah has become the
only bank providing long term financing facility to SMEs for
infra structure capacity building
Is there an age restriction for availing AMF?
The maximum age of the borrower shall be 65 years at the
maturity of loan
What is the amount of financing offered under AMF?
AMF-1, 2 & 3 can be availed by the customer within the range
of Rs.0.50M to Rs.30.00M whereas AMF-4 can be availed within the
range of Rs.0.50M to Rs.3.50M.
How much equity participation shall be required by the
borrower?
For AMF 1&3 minimum 30% equity participation is required
whereas no equity is required for AMF 2 & 4. The value of land /
property owned by the borrower shall be counted towards his /
her equity.
What shall be the tenure of AMF?
Minimum & Maximum tenor for AMF 1, 2 & 3 shall be 2-15 years.
Loans under AMF 4 shall be repaid within 2-4 years.
What is the frequency & mode of repayment?
AMF shall be repaid through equal monthly installments. Bank
will obtain post dated cheques for the entire facility tenure at
the time of disbursement.
What is the mark-up rate?
Market based mark-up (1 YEAR KIBOR +4%) shall be charged on
the outstanding principal balance.
Is there a grace period for repayment?
Under AMF-1, AMF-2 and AMF-3 a grace period can be allowed
for a period not exceeding 3 months, 9 months and 6 months
respectively inclusive in the total tenor of facility. Monthly
mark-up shall however be serviced during the grace period.
What is the security that I will have to offer to avail
AMF? The property being financed shall be mortgaged in favor
of the bank along with personal guarantee of the proprietor/
partners / directors.
How long is the processing time?
The loan shall be disbursed approximately within one month
after completion of documentary requirements by the customer.
Is there an early repayment option available? Is there a
penalty charge?
Full and final repayment from own sources shall not attract
any penalty. Once a year partial repayment shall be allowed
without any penalty however in case the outstanding liability is
swapped by another bank 5% of the outstanding principal balance
shall be charged.
Can I simultaneously avail more than one type of facility
under AMF?
Yes, if you fulfill criteria for each facility and total
financing under AMF does not exceed Rs.30M.
Can I avail AMF for purchase of land?
AMF-3 has now been allowed for purchase of
commercial/industrial land subject to the condition that within
six months after disbursement, the customer will also avail
AMF-2 for construction on the same land.
How many times will I have to visit Bank Alfalah to get
the facility?
Approx three visits only
(i) To hand over the required documents.
(ii) To sign the agreements
(iii) For disbursement
What are the Insurance Requirements under AMF?
Bank will undertake two types of insurance under AMF.
Firstly, the property mortgaged under AMF shall be insured and
secondly, in case of individual/sole proprietor, life insurance
of the borrower shall be obtained with Bank as loss payee in
both cases. Insurance premium shall be built in the installment
amount. First Year insurance premium shall be taken upfront
before disbursement of facility.
Why personal insurance, I do not believe in such
instruments so why should I pay for it?
This facility is being offered at a concessional rate to
secure the client’s interest in case of any unfortunate event.
It will help ease debt burden on the legal heirs of the client.
Is there any restriction on geographical location of
property for availing AMF?
All urban commercial/industrial properties which are
acceptable to banks approved legal advisor(s).
Can I avail AMF to acquire business premises for my new
product line?
Yes, however it will depend on Bank’s evaluation and
satisfaction regarding the borrower’s prior experience and
expertise in the respective line of business.
I do not maintain proper books of accounts nor do I
prepare financial statements of my business. Does that make me
ineligible for AMF?
No, even if you have an informal record of business
transactions for last one year the Bank will arrange the
preparation of formal financial statements.
I do not have the legal documents of my commercial /
industrial plot. I want to avail AMF for construction. Will the
Bank accept my residential or another commercial property as
collateral?
Such an arrangement will not be possible under AMF.
I have no credit history with any bank. Does it make me
ineligible for AMF?
No, you can still avail AMF if you fulfill other eligibility
criteria.
I have recently purchased/constructed a commercial
property from my own sources. Now I am short of cash to invest
in my business. Can I avail AMF against such property recently
purchased or constructed?
For such financing needs we would like to introduce Alfalah
Karobar Finance (AKF) to you.
Can I avail AMF to own a commercial property and rent it
out to repay the installment? The rent + cash flows from my
existing business would repay the loan.
AMF is being offered for capacity building of SME’s in their
existing lines of business. Renting out the property acquired
through AMF shall only be allowed in exceptional cases subject
to the condition that the rent is assigned in favour of the
bank.
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