Small Industries Development Bank of India (SIDBI) offers a wide range of finance schemes to the Micro, Small, and Medium Enterprises (MSME) industry. Loan amounts can range from Rs.10 lakh to Rs.3 crore. Loan repayment tenures can go up to 10 years. These loans, which are offered at attractive interest rates, help provide necessary capital for the growth and expansion of MSMEs. Loans above Rs.1 crore can be availed without any collateral required. Loan subsidies are also available.
The direct loan schemes offered by SIDBI are given below:
|Loan Scheme||Loan Tenure||Loan Amount||Eligibility Criteria|
|SIDBI Assistance to Facilitate Emergency Response Against Coronavirus (SAFE)||Up to 5 years including moratorium||Up to Rs.50 lakh||New customers: 2 years of cash profits and account not in SMA1/2 category
Existing customers: Cash profits in last audited balance sheet not in the SMA1/2 category
|SIDBI Assistance to Facilitate Emergency Response Against Coronavirus Plus (SAFE PLUS)||Repayable over 4-month cycle||Linked to unit turnover-up to Rs.1 crore||New customers: 2 years of cash profits and account not in SMA1/2 category
Existing customers: Cash profits in last audited balance sheet not in the SMA1/2 category
|Smile Equipment Finance (SEF)||Up to 72 months||Minimum loan amount of Rs.10 lakh can be availed||Should have 3 years' experience in the financial or business sector|
|SIDBI Make in India Soft Loan Fund for MSME (SMILE)||Up to 10 years, including 3-year moratorium||Between Rs.10 lakh and Rs.25 lakh||New or existing enterprises|
|Working Capital (Cash Credit)||As per the terms and conditions||Depends on the financial ability of the applicant||Existing customers under SIBDI or of other banks can apply|
|Loans under partnership with OEM (Original Equipment Manufacturer)||Up to 5 years with eligible moratorium||Up to Rs.1 crore with higher amounts subjected to guidelines||Should have 3 years' experience in the financial or business sector|
|SIDBI Trader Finance Scheme (STFS)||Up to 5 years including moratorium||Between Rs.10 lakh and Rs.1 crore||Should have retailing, financial or business experience of 3 years|
|SIDBI – Loan for Purchase of Equipment for Enterprise’s Development (SPEED)||Up to 5 years including moratorium of up to 6 months||New customers: Up to Rs.1 crore
Existing customers: Up to Rs.2 crore
|3 years of existing business and profit-making for at least 2 years|
|SIDBI-Loan for Purchase of Equipment for Enterprise’s Development Plus (SPEED PLUS)||Up to 5 years including moratorium of up to 6 months||New customers: Up to Rs.2 crore
Existing customers: Up to Rs.3 crore
|5 years of business experience making profits for at least 3 years|
|SIDBI - RETAIL LOAN SCHEME FOR TRADE FINANCE (RLS)||Up to 5 years including 3-month moratorium||Up to Rs.1 crore||Should have 3 years of business experience|
|TOP UP LOAN FOR IMMEDIATE PURPOSES (TULIP)||Up to 5 years||30% of existing exposure or 20% of net sales subject to Max Rs.2 crore||You should have availed a SIDBI loan scheme for at least a year and have satisfactory financial records|
|SIDBI TERM-LOAN ASSISTANCE FOR ROOFTOP SOLAR PV PLANTS (STAR)||Up to 5 years including moratorium of up to 6 months||Up to Rs.2.5 crore||Proof of 2 years of cash profit and satisfactory financial records|
Listed below are the key benefits of availing a loan from SIBDI:
The objective and goal of SIDBI is to offer short-term loans and refinancing solutions to companies listed in the Micro, Small and Medium Enterprises (MSME) sector as well as for financial institutions directly related to such companies – offering loans for development and sustenance.
Listed below are the chief functions of SIDBI:
This scheme supports MSMEs in tiding over the economic challenges induced by the coronavirus crisis by providing up to 100% financing for working capital requirements. It ensures that MSMEs receive loans within 48 hours. There are no processing charges or no pre-payment charges. Repayment tenure for the term loan is up to 5 years including moratorium and for the Working Capital Term Loan (WCTL) it is for 18 months including moratorium. Maximum quantum of finance is Rs.50 lakh.
This scheme provides MSMEs up to 100% financing for working capital requirements for specific orders to overcome financial challenges that arise out of the coronavirus pandemic. The credit guarantee cost is borne by SIDBI. Loans are disbursed within 48 hours. There are no processing charges or no pre-payment charges. The Working Capital Term Loan (WCTL) repayment tenure is a revolving one that is repayable over a 4-month cycle. Maximum quantum of finance is Rs.1 crore and is linked to the unit’s turnover.
The main aim of this scheme is to cover both manufacturing and service sector. If you wish to start a business in the manufacturing or service sector, you can avail this loan. The minimum loan amount is Rs.10 lakh with Rs.25 lakh being the maximum. The loan repayment tenure can go up to 10 years.
You can avail this loan if your MSME entity has been in existent for at least three years. The maximum loan amount you can avail is Rs.10 lakh with a maximum repayment tenure of 72 months.
If your business has been in existence for at least three years and is in a stable financial position, you can avail this loan so that you can purchase the necessary machineries and plants from OEMs. You can avail up to Rs.10 lakh with the maximum repayment tenure of 60 months.
You can avail this if you have a business of your own and wish to raise funds for venture expansion.
If you are a MSME retailer, wholesaler, distributor, etc. and own a business which has been in existence for a minimum of 3 years, you can avail this SIDBI loan scheme. Your business should be doing well financially and in case there is a drop in sales turnover then it should not be more than 10% yearly for 2 years. You can avail a loan amount between Rs.10 lakh and 1 crore with repayment tenures up to 5 years.
If you own a stable business which has been in existence for a minimum of 3 years and is making suitable profits, you can avail this loan scheme to raise capital and expand your business. You can avail a loan at rates of interest ranging between 9.25% p.a. and 10% p.a. with repayment tenure ranging between 2 years and 5 years.
If you own a business which has been doing well for the past 3 years and has been in existence for a minimum of 5 years, then you are eligible to avail this loan scheme. You can avail this loan to purchase high end machineries for your business.
You can avail this loan if you wish to avail a loan so that you can raise working capital, then you can avail this loan scheme. Your business must be in existence for a minimum of 3 years and should be making profits for the past 3 years. You can avail a loan between Rs.10 lakh and Rs.1 crore with rates of interest levied between 10% p.a. and 11.50%.
If you have availed a SIDBI loan scheme for at least a year and need more capital to build your business, you can avail this scheme. You will be eligible to receive up to 100% finance on 10% FD and extension of charge at interest rates ranging between 10% p.a. and 11% p.a.
You can avail this SIDBI loan scheme if you own a MSME and wish to reduce the power bill. You can avail a loan between Rs.10 lakh and Rs.2.5 crore with interest rates ranging between 9.10% p.a. and 10.20% p.a.
SIDBI also offers indirect loans to various banks, NBFCs, and other types of financial entities. The indirect loans that a financial body can avail from SIDBI are given below:
Non-Banking Financial Companies (NBFCs), Asset Loan Companies, or any finance company which is registered with RBI and are engaged in providing finance enterprise in MSME sector can apply for loan under SIDBI. The eligibility criteria will depend from lender to lender.
SIDBI will provide financial assistance to schedule banks under various refinance scheme. Schedule banks with strong financials are eligible for loans under SIDBI.
SIDBI provides assistance to those banks by providing equity investments for capitalisation of SFBs to meet their equity gap. SIDBI has also been providing refinance support to MFIs and NBFCs post their transformation to SBFs.
Applicants should follow the steps mentioned below to apply for a loan from SIBDI:
Step 1: Visit the official website of SIBDI
Step 2: Click on the ‘Borrower’s Corner’ tab.
Step 3: Enter your username and password.
Step 4: The applicant has to then enter the desired loan amount and choose a scheme.
Step 5: The applicant has to enter personal details such as his/her name, username, email ID, mobile number, business address, state, district, etc. Click on ‘register’ to complete the application process.
These schemes are aimed at helping companies and manufacturers who deal with saving energy, facilitating cleaner production and the like. These schemes strive to provide attractive rates of interest to encourage energy saving projects. Companies can reduce their energy costs and enhance their profit. The schemes help achieve waste reduction, control pollution, recover valuable by-products during production and participate in sustainable growth.
The schemes are funded in the following ways:
Who can Borrow?
Loan amount and tenure
Many MSMEs face the problem of delayed payments for the credit sales made to larger purchaser companies. SIDBI recognises the problems that can arise out of this situation for the MSME and how it can significantly affect the financial health of the company. Therefore, it devised a scheme under which these companies can acquire finance against the bills or invoices that the MSME holds against the credit purchase made by the purchaser company.
To help MSMEs maintain their financial health which depends greatly on how quickly their receivables are realised. This scheme helps reduce the issues suppliers face with receivables belonging to MSMEs. It aims to help them improve their liquidity and cash flow. The scheme’s objectives are to help the MSMEs in the following activities.
Usage of Funds
There is a need for constant upgrading when dealing with technology. Companies need to modernize and upgrade their technological processes to stay on par with the current conditions. Companies also need to expand their capacity every now and then. SIDBI plays an important role in these situations to help companies meet their financial needs. SIDBI has been marked as a Nodal Agency to help in assisting and monitoring the interface and coordination with banks, financial institutions and the Government.
Under this scheme, SIDBI provides financial assistance to MSMEs who want to invest in development and upscaling. It also helps out in the demonstration of innovative technology based projects and the need for commercialization.
SIDBI provides assistance in the form of early stage “debt” funding. The terms are relaxed to help the MSME in developing, demonstrating and commercializing new innovations. The scheme supports emerging technology, new products, unproven technology and new processes that have not been commercialized yet. Assistance granted is usually 80% of the cost of the project. The maximum funding granted per project is Rs.1 crore. It could exceed this limit in special cases based on the innovative factor of the project.
Usage of funds
The Project Approval Committee is in charge of approving the interest rate granted under this scheme. The interest rate offered does not exceed 5% per annum.
An upfront fee of 0.5% of the sanctioned amount + taxes is charged.
The loan should be repaid within 6 years from the date of project completion. This 6-year period includes the moratorium period granted. In special cases, this period can be extended.
New and existing MSME units are eligible to apply for finance under this scheme.
SIDBI has a lot to offer to MSMEs and has been identified as a Nodal Agency when it comes to Government Schemes for this sector. Enterprises can secure finance more conveniently. SIDBI will provide assistance to go about it the right way and get the most which will benefit the company and ultimately benefit the country.
Yes, MUDRA loan is one of the loan products offered by SIBDI.
Applicants for the SIBDI direct loan should submit proof of identity and address, PAN card, documents proving their business, etc.
No, the credit score of the individual or partners are not taken into consideration.
SIDBI offers direct finance, in-direct finance and Micro Finance.
No, it is not a subsidiary of the RBI. Shares of SIDBI are owned by the Government of India and other institutions which are owned or controlled by the Central Government.
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