Overview about SBI SME Loans
State Bank of India (SBI) is a government-owned Indian multinational public sector 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.
Being a government-owned bank, SBI naturally offers the very low interest rates on loans of any kind because of a low base rate. State Bank of India has gone in accordance with RBI’s move of reducing the repo rate and thus gets a very low base rate. A lower base rate means lower interest rates, even for schemes meant for small scale industries and entrepreneurs.
Loans available under State Bank of India (SBI) SME Loans
As of November 2015, there are a set of 9 specialised loans available for small-scale industries and/or businesses. They are as follows
SBI Fleet Finance Scheme
This scheme is aimed at providing financial aid to companies who would be purchasing new vehicles or upgrading old ones for use in their business. The loan is provided only to entrepreneurs who have a fleet of minimum 10 vehicles and have a requirement of a minimum of 10 vehicles. The loan amount can range from INR 50 lakhs to INR 10 crores. One needs to have a minimum of 2 years’ experience in the concerned business and should have a 35% or above score under the approved scoring model. Necessary permits for vehicle operation are also mandatory. The current rate of interest for this loan ranges from Base Rate + 0.50% per annum to Base Rate + 1.75% per annum
Cluster Specific Package for Auto Ancillary Cluster
This loan scheme is meant for providing financial aid towards purchase, maintenance or upgrades of automobiles owned by companies falling under the small-scale business category. The applicable interest rate ranges from Base Rate + 1.25% per annum to Base Rate + 3.00% per annum
Cluster Specific Package for Ceramic Cluster
This loan scheme is meant for providing financial aid towards purchase, maintenance or upgrades of portions of assets that fall under the ceramic classification owned by companies falling under the small-scale business category. The applicable interest rate ranges from Base Rate + 1.25% per annum to Base Rate + 3.00% per annum
Construction Equipment Loan
As per the name of this loan, this financing option allows funding help for construction of facilities by the purchase or rent of equipment that helps in the building process. The applicable rate of interest for this loan ranges from Base Rate + 1.00% per annum to Base Rate + 2.00% per annum
Nabakalebar Special SME Scheme
This is a specialised loan for SMEs that is available only in a few regions in the state of Orissa and can be used for a variety of purposes that can come up for small businesses. This loan has a set interest rate of Base Rate + 3.00% per annum
Asset Backed Loan
This is a secured loan utilising a predefined asset belonging to the business or the entrepreneur as a security. The loan can be used for any purpose aiding in the growth of the business. The interest rate is fixed at Base Rate + 1.75% per annum
Asset Backed Loan for Commercial Real Estate
A variation of the Asset Backed Loan, this loan has higher limits in the loan amount as well as higher interest rate at Base Rate + 2.50% per annum
Boutique Finance Scheme
Applicable only for the state for West Bengal, this loan scheme from SBI allows individuals interested in entrepreneurship in the aesthetic sector to avail financing for setting up their own shop catering to clothing and accessories. The interest rate of this loan ranges from Base Rate + 2.25% per annum to Base Rate + 3.65% per annum
Medical Equipment Finance
Useful for doctors who are about to set up their own private practice or individuals wishing to set up nursing homes or diagnostic centres in remote locations. The interest rate ranges from Base Rate + 1.25% per annum to Base Rate + 2.50% per annum
The above schemes from State Bank of India are applicable across India excepting the ones which are explicitly meant for specific states. The base rate of State Bank of India as of November 2015 is 9.30% per annum. Based on the changes to the base rate, the individual rates of dependent loans might vary. SBI might also make changes to the interest rates of the loans as per its discretion.
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