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  • SIDBI - Small Industries Development Bank of India

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  • 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.25 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.

    Objective of SIDBI

    The main objective of SIDBI is to offer loans to MSMEs to help in addressing the development and financial gaps in the ecosystem of MSMEs. The company aims to ensure that the MSME sector is globally competitive, vibrant, and strong.

    Products offered under SIDBI

    1. SIDBI Make in India Soft Loan Fund For Micro Small and Medium Enterprises (SMILE)

    • The repayment tenure of the loan is up to 10 years (inclusive of moratorium period of 36 months).
    • Attractive interest rates are offered.
    • Priority will be given to services and manufacturing sectors.
    • In the case of loans of up to Rs.2 crore, cover may be provided under the Credit Guarantee Scheme.

    2. SMILE Equipment Finance (SEF)

    • The minimum loan that will be provided is Rs.10 lakh.
    • Attractive interest rates are offered.
    • The repayment tenure of the loan is up to 72 months (inclusive of moratorium period).
    • Loans are provided to MSMEs that have been running for a minimum of 3 years. The MSMEs must be financially stable as well.

    3. Loans under partnership with OEM

    • The maximum loan that may be offered may be up to Rs.1 crore.
    • Loans are provided to MSMEs that have been running for a minimum of 3 years. The MSMEs must be financially stable as well.
    • The loan that is provided must be used for investment in Plant and Machinery.
    • The repayment tenure of the loan is up to 60 months (inclusive of moratorium period).
    • Attractive interest rates are offered.

    4. SIDBI – Loan For Purchase of Equipment For Enterprise's Development (SPEED)

    • Up to 100% financing may be provided.
    • Quick disbursal.
    • Loans are provided to MSMEs that have been running for a minimum of 3 years. The MSMEs must be financially stable as well.
    • The repayment tenure of the loan ranges between 2 years and 5 years (inclusive of moratorium period of 3 months to 6 months).
    • The interest rate ranges between 9.25% p.a. and 10% p.a.

    5. SIDBI - Loan For Purchase of Equipment For Enterprise's Development PLUS (SPEED PLUS)

    • 100% financing may be provided for the purchase of high-end machineries.
    • Quick disbursal.
    • Collateral need not be provided.
    • The interest rate ranges between 8.80% p.a. and 10.50% p.a.
    • The repayment tenure of the loan ranges between 2 years and 5 years (inclusive of moratorium period of 3 months to 6 months).

    6. Top up Loan For Immediate Purposes (TULIP)

    • The loan gets sanctioned within 7 days.
    • No collateral needs to be provided.
    • The interest rate ranges between 10.00% p.a. and 11.00% p.a.
    • The repayment tenure of the loan is up to 60 months (inclusive of a moratorium period of 6 months).

    7. SIDBI Term-loan Assistance For Rooftop Solar PV Plants (STAR)

    • Loans are provided to MSMEs to help in reducing the power bill.
    • The loan amount may range between Rs.10 lakh and Rs.2.5 crore.
    • The interest rate ranges between 9.10% p.a. and 10.20% p.a.
    • The repayment tenure of the loan is up to 60 months (inclusive of a moratorium period that ranges between 3 months and 6 months).

    8. SIDBI ASSISTANCE TO HEALTHCARE SECTOR IN WAR AGAINST SECOND WAVE OF COVID19(SHWAS)

    • 100% finance may be provided.
    • Competitive interest rates are offered.
    • No processing fee is levied.
    • The interest rate ranges between 4.50% p.a. and 5.00% p.a.
    • The maximum loan amount that is provided is Rs.2 lakh.

    9. SIDBI ASSISTANCE TO MSMES FOR RECOVERY & ORGANIC GROWTH DURING COVID19 PANDEMIC(AROG)

    • 100% finance may be provided.
    • Competitive interest rates are offered.
    • Low collateral needs to be provided.
    • No processing fee is levied.
    • The interest rate ranges between 5.50% p.a. and 6.00% p.a.
    • The maximum loan amount that is provided is Rs.2 lakh.

    10. TIMELY WORKING CAPITAL ASSISTANCE TO REVITALISE INDUSTRIES IN TIMES OF CORONA CRISIS (TWARIT)

    • The interest rate is 8.25% p.a.
    • The repayment tenure of the loan is up to 48 months (inclusive of a moratorium period of 12 months).
    • No prepayment penalty is levied.

    Direct loan schemes offered by SIBDI

    The direct loan schemes offered by SIDBI are given below:

    Loan Scheme Loan Tenure Loan Amount Eligibility Criteria
    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 – 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.
    Minimum net sales should be Rs.5 crore with no operating loss in the past two years
    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.
    Should be able to show cash profit in the previous financial year
    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 for existing customers and 4 years of cash profit for new customers, and satisfactory financial records
    SIDBI ASSISTANCE TO HEALTHCARE SECTOR IN WAR AGAINST SECOND WAVE OF COVID19(SHWAS) Up to 5 years Up to Rs.2 crore Cash profit in last two years for new customers. For existing customers, they need to show cash profit in the previous audited balance. The customers should also have satisfactory financial balance.
    SIDBI ASSISTANCE TO MSMES FOR RECOVERY & ORGANIC GROWTH DURING COVID19 PANDEMIC(AROG) Up to 5 years Up to Rs.2 crore Cash profit in last two years for new customers. For existing customers, they need to show cash profit in the previous audited balance. The customers should also have satisfactory financial balance.
    TIMELY WORKING CAPITAL ASSISTANCE TO REVITALISE INDUSTRIES IN TIMES OF CORONA CRISIS (TWARIT) Up to 4 years with a moratorium of 1 year Up to 20% of total outstanding loans with SIDBI up to Rs.25 crore, with cap exposure of Rs.5 crore subject to modification by Govt of India / NCGTC, All Existing accounts with outstanding credit facilities up to Rs.25 crore and with an annual turnover of Rs.100 crore.

    Indirect Loan Schemes Offered under SIDBI

    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:

    1. Assistance to NBFCs
    2. 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 the MSME sector can apply for a loan under SIDBI. The eligibility criteria will depend on a lender to lender.

    3. Refinance Scheme
    4. SIDBI will provide financial assistance to scheduled banks under various refinance schemes. Schedule banks with strong financials are eligible for loans under SIDBI.

    5. Assistance to Small Finance Banks (SFBs)
    6. 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.

    Key functions of SIDBI

    Listed below are the chief functions of SIDBI:

    • Aid financial institutions (cooperation and commercial banks) lending to small-scale industries in the Small and Medium Enterprises (MSME) sector to ensure their financial health.
    • Offer SIBDI direct loans to companies categorised in the Small and Medium Enterprises (MSME) sector.
    • Carry out marketing initiatives for small-scale industries on a global scale.
    • Offer venture funding possibilities for industries in the Small and Medium Enterprises (MSME) sector.
    • Promotion of employment and upgradation of technology in the sector.
    • Offer job opportunities for individuals who wish to work in the sector. SIDBI recruitment updates are displayed on the website - https://www.sidbi.in/en/careers/archived
    • Loan offers for development and maintenance of small-scale industries in the country.
    • Marketing of small-scale industries on a global scale.
    • Promotion of employment-oriented industries in the small-scale industry sector.
    • Ensure technology upgradation in the small-scale industry.
    • Ensures the financial health of cooperation banks and commercial banks' lending to small-scale industries.
    • Promotion of venture funds.

    5 steps to apply for a loan from SIBDI

    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. Click on ‘Online Loan Application’.

    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.

    Benefits of availing a loan from SIBDI

    Listed below are the key benefits of availing a loan from SIBDI:

    • Tailor-made - SIDBI designs loans according to the needs of your enterprise. If your needs do not fall into the usual and ordinary category, SIDBI will help fund you in the right way.
    • Specialised Size - Loans are altered according to the size of the enterprise. So micro, small and medium enterprises can get different loans tailored to suit their business.
    • Attractive Rates - SIDBI has a tie-up with many banks and international financial institutions and can get concessional rates of interest. The tie-ups include KfW, World Bank and Japan International Cooperation Agency.
    • Assistance - SIDBI doesn’t just give you a loan, it also gives your assistance and much needed advice. Relationship managers help entrepreneurs make the right decisions and provide assistance till the end of the loan process.
    • Collateral Free - Entrepreneurs can get up to Rs. 100 lakhs without offering collateral. This is done through the establishment of a Trust called Fund Trust for Micro and Small Enterprises (CGTMSE).
    • Risk and Growth Capital - Without diluting the ownership of the company, entrepreneurs can acquire sufficient capital to meet growth requirements.
    • Venture and Equity Funding - SIDBI has a wholly owned subsidiary called SIDBI Venture Capital Limited that can provide growth capital in the form of equity through venture capital funds that are focussed on MSMEs.
    • Government Subsidies - Take advantage of various schemes that have concessional rates and relaxed terms offered by the Government. SIDBI has a wider understanding and in-depth knowledge of loans and schemes available and can help you make the best decision for your company.
    • Transparency - The process and rate structure is transparent. There are no hidden charges.

    Finance Schemes for Sustainable Development including Energy Efficiency and Cleaner Production in MSMEs

    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.

    Purpose

    • To promote energy efficient enterprises in the MSME sector.
    • Contribute to reducing the severity of climate change by reducing greenhouse gas emission especially Carbon Dioxide.
    • Use financial products to help reduce pollution and emissions.
    • Provide support for MSMEs who want to increase their scale, and invest in the development and commercialization of projects based on innovative technology.

    Who can Borrow?

    • MSME Units
    • The borrower’s business should be in existence for at least three years where the applicant will have to show a profit for at least two years
    • Proposal should be in the range of C1-C8
    • The unit should be audited by a technical agency
    • The unit in order to avail this loan should not have availed Performance Linked Grant under the WB-GEF Project
    • The unit should be in compliance with the Environment & Social Management Framework

    Loan amount and tenure

    • Loan amount: Up to Rs.10 lakh or 90% of the project cost. The maximum loan the unit can avail is up to Rs.1.5 crore
    • Repayment tenure:Not more than 3 years for loan amount up to Rs.50 lakh, and not more than 5 years for loan amount above Rs.50 lakh

    Appraisal & Sanction Related Sanction related

    • Post the Detailed Energy Audit, the Detailed Project Report (DPR) to SIDBI for its vetting by EEC is to be submitted by the borrower for verification.
    • Application to SIDBI BOs along-with a copy of the DPR vetted by EEC to be submitted by the borrower.
    • Eligible amount under CLCSS, TEQUP, etc. shall be sanctioned along with the loan as per the existing guidelines.
    • The loan amount will then be disbursed after the necessary terms and conditions are met.

    TIFAC SRIJAN Scheme - SIDBI Revolving Fund for Technology Innovation

    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.

    Funding

    SIDBI assists in the form of early stage “debt” funding. The terms are relaxed to help the MSME in developing, demonstrating and commercializing 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.

    Process

    • Once a proposal for finance is submitted, it will be subjected to a technical evaluation by TIFAC.
    • The proposal will have to be evaluated for financial viability by SIDBI.
    • The Project Approval Committee (PAC) consisting of officials of SIDBI and TIFAC will ten approve the assistance?

    Usage of funds

    • Capital expenditure which includes factory shed or industrial housing, and plants. It also includes machinery, equipment, utilities, quality control and testing equipment.
    • Working capital margin
    • Cost of manpower
    • Pre-operative expenses
    • Intangible asset expenses such as copyrights, patents, technology transfer fees, marketing, licensing, research and development, and branding.
    • Contingencies
    • Any other overheads that are required for the project

    Interest Rate

    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.

    Other Charges

    An upfront fee of 0.5% of the sanctioned amount + taxes is charged.

    Repayment

    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.

    Security

    • Personal guarantee of the promoters
    • First charge on moveable and immoveable assets created out of the project.
    • First or second charge on other assets of the unit to be created. This depends on if the prior charge is insufficient.

    Eligibility

    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.

    FAQs on Small Industries Development Bank of India

    1. Are MUDRA loans offered by SIBDI?

      Yes, MUDRA loan is one of the loan products offered by SIBDI.

    2. What documents should I submit if I wish to apply for a SIDBI direct loan?

      Applicants for the SIBDI direct loan should submit proof of identity and address, PAN card, documents proving their business, etc.

    3. Is the credit score of the individual taken into consideration when applying for a SIBDI loan?

      No, the credit score of the individual or partners are not taken into consideration.

    4. What the types of finance offered by SIBDI?

      SIDBI offers direct finance, in-direct finance and Micro Finance.

    5. Is SIBDI a subsidiary of the Reserve Bank of India?

      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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