Overview about ICICI Bank SME Loans

ICICI Bank is an Indian multinational banking and financial services organisation offering products and services across consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, private equity, savings, securities, asset management, wealth management, credit cards and many others. It was founded in 1994 and is headquartered in Vadodara, Gujarat with corporate headquarters in Mumbai, Maharashtra.

ICICI Bank is one of the Big Four banks of India and offers lucrative rates on its loan products. ICICI Bank has reduced its base rate following the repo rate cut and thus loans from ICICI are pretty good when compared to others in the bank. A lower base rate means lower interest rates, even for schemes meant for small scale industries and entrepreneurs.

Loans available under ICICI Bank SME Loans

As of November 2015, ICICI offers traditional facilities for loans meant for small-scale industries and/or businesses. They are as follows

1. Working Capital Finance – Working capital finance is provided through cash credit or overdraft facility and it helps in the day-to-day running of the business
2. Export Credit & Letter of Credit – An Export Credit aids in financing pre-shipment and post shipment processes. A Letter of Credit is meant for aiding trading purposes
3. Bank Guarantee – An undertaking or promise given by ICICI Bank to the clients, customers and/or partners of the small business that the small business or the trade initiated by the entrepreneur will always be meeting financial and performance obligations. Any shortcomings on the part of the business are aptly covered by ICICI bank
4. Term Loan – ICICI Bank provides financing under this facility to small businesses in order to help them purchase business related assets and also in processes that can promote the growth of the business.

Interest rates for any particular loan is entirely dependent on the discretion of ICICI Bank. However, as of November 2015, secured loan facilities have an interest rate up to Base Rate + 5.00% per annum, facilities backed by CGTMSE can have an interest rate up to Base Rate + 3.10% per annum and unsecured facilities can have a higher limit interest rate of Base Rate + 7.50% per annum. The Base Rate of ICICI Bank as of November 2015 is 9.70% per annum.

Loan securities can be anything from residential, commercial, industrial properties to liquid securities. The loan tenures can be as high as 7 years and the eligible entities for availing these loans can be Sole Proprietorship Firms, Partnership Firms, Private limited Companies and Public limited Companies.

The above schemes from ICICI Bank are applicable across India. The base rate of ICICI Bank as of November 2015 is slightly higher than government-owned banks. Based on the changes to the base rate, the individual rates of dependent loans might vary. ICICI might also make changes to the interest rates of the loans as per its discretion.