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  • SBI Simplified Small Business Loan

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  • The Simplified Small Business Loan from SBI falls under the SME Loans category. These loans are offered against current account balances. The loan amount varies from Rs.10 lakh to Rs.25 lakh. The repayment tenure can go up to 60 months.

    Key Features of SBI Simplified Small Business Loan

    • The main purpose of the loan is to provide funding to businesses for accumulating current assets and fixed assets.
    • This is a drop-line overdraft facility.
    • Interest rates are competitive and are linked to MCLR.
    Loan Amount 10 times the average monthly balance (in the preceding 12 months) in the current account, subject to: Minimum – Rs.10 lakh Maximum – Rs.25 lakh
    Margin 10%*
    Collateral Minimum of 40%
    Repayment Tenure Up to 60 months
    Fees and Charges Rs.7,500**

    *This is ensured through receivable statement and stocks

    **This consists of processing fee, documentation charges, remittance charges, commitment charges, inspection fees, etc.

    Eligibility Criteria

    • The target group for this loan consists of businesses involved in manufacturing activities, self-employed individuals, professionals, and units engaged in wholesale/retail trading.
    • The business should have existed for a minimum of 5 years in the same location.
    • The borrower should be the owner of the business location or he/she should have a valid tenant agreement with the owner.
    • If the premises are rented, there should be a residual period of at least 3 years.
    • The borrower should be a current account holder for at least 3 years at any bank.
    • The minimum average monthly balance in the account should be more than Rs.1 lakh throughout the past 12 months.
    • The applicant should fulfill the Go/No Go criteria as well.

    Assessment Process for the Loan

    The bank will perform need-based assessment and credit limit checks. The financial statements of the business are not required for this. 10 times the average monthly balance in the current account (in the previous 12 months) should be between Rs.10 lakh and Rs.25 lakh.


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