Disclaimer…before you read ahead!
The information contained herein is of a general nature and for information purposes only, with the intent of raising awareness around various resources, schemes etc. available for women entrepreneurs in India. It is not intended to address the circumstances of any particular individual or entity. It does not purport to be all-inclusive or necessarily contain all the information that may be relevant for the reader, and may be subject to updating, revision or amendment. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to remain accurate in the future. The reader, therefore, is required to exercise their discretion; and not act on such information without appropriate professional advice after a thorough examination of the particular situation.
Furthermore, we are not a lender and are not authorized by the Reserve Bank of India to act as one. By disseminating the information contained herein, we are not soliciting any borrower or customers for the company or organization mentioned herein nor do we intend to syndicate any capital for the reader of this article.
About this scheme…
Finance to Start-Ups (MSME UDAAN) Scheme is a loan offering by State Bank of India (SBI) for MSME Start-ups to meet their funding requirements for very specific needs.
How is it being implemented?
Under this Scheme, financial assistance in the form of loans is given exclusively to,
- MSME Start-ups registered with or recognised by Department for Promotion of Industry and Internal Trade (DPIIT), Government of India
Financing under this Scheme will be done only by select SBI branches identified and authorised by the Circle. You may look for a SBI Start-up branch nearest to you here under Startup Branch tab
The Start-up accounts which have been financed so far under SBIs usual credit dispensation will be migrated to the identified or designated Start-up Branches, so as to offer dedicated value added services and cater to the entire Start-up value chain or ecosystem
What’s on offer?
I. Product
- Term Loan, Working Capital Facility (fund based, non fund based, cash credit)
- Ticket Size: upto ₹50 Crores categorized into
- upto ₹50 Lakhs
- more than ₹50 Lakhs upto ₹50 Crores
II. Purpose:
- Prototype creation, product or website or app development
- Team hiring
- Legal and consulting services
- Purchase of raw material and equipment
- Licenses and certifications
- Marketing and sales
- Purchase or leasing of office spaces and administrative expenses
III. Borrower Type:
- Registered Partnership, Limited Liability Partnership (LLP), Private Limited Company, Public Limited Company
IV. Security or Collateral or Guarantee or Insurance
- Security:
- Hypothecation of Assets financed by the Bank
- Hypothecation of Stocks & Receivables
- Charge on Intellectual Property Rights financed by the Bank
- Right or lien on all Products or Patents or Copyrights and Results created out of Bank Finance, in consultation with empanelled reputed Law Firm or Law Department of the Bank
- Collateral:
- upto ₹50 Lakhs
- To be covered under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) or Credit Guarantee Scheme for Startups (CGSS)
- If CGTMSE or CGSS coverage is not available, at least 25% tangible collateral security needs to be provided
- more than ₹50 Lakhs upto ₹50 Crores
- Investment by an Alternative Investment Fund (AIF) is compulsory
- To be covered under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) or Credit Guarantee Scheme for Startups (CGSS)
- If CGTMSE or CGSS coverage is not available, at least 25% tangible collateral security needs to be provided
- upto ₹50 Lakhs
- Guarantee: Personal Guarantee of all Promoters
- Insurance: For more information around this, please contact SBI via means mentioned below
V. Interest Rate
- External Benchmark Linked Rate (EBLR) = Repo Rate + Spread + Credit Risk Premium (CRP) + Business Strategy Premium (BSP)
- May range between 9.15% – 16.00%
VI. Processing Fee
- Nil
VII. Margin Money Requirement
- For loans upto ₹10 Lakhs: Nil
- For loans above ₹10 Lakhs:
- Term loan: Equity requirement specified under this Scheme
- Working capital facility: at least 25% of stock and receivables, if any
VIII. Tenure, Repayments & Pre-Closures
- Tenure: 120 months including moratorium
- Repayments: EMIs. Bullet repayment options may also be available
- Pre-payment & Foreclosure Charges: Nil
IX. Turnaround Time
- For information around turnaround time, please contact SBI via means mentioned below
Interested? Read ahead to check your eligibility….
I. Is yours a Start-up registered or recognized by DPIIT, Government of India?
II. Is yours a Start-up registered as MSME with a valid Udyam Registration Certificate?
III. Has it been 10 years or less since your Start-up got incorporated or registered?
IV. Has the turnover of your Start-up been 100 Crores or less in any financial year after incorporation₹
or registration?
V. Your Start-up has not been formed by splitting or reconstructing an already existing business?
VI. Your Start-up has the support from recognized incubators or accelerators or investors available as
per the Start-up India portal?
VII. Has the equity portion of your Start-up been fully tied?
If your answers to the questions above are an emphatic YES, you are all set to avail loan under SBI’s Finance to Start-Ups (MSME UDAAN) Scheme!
So…how big is this scheme and what has been done so far?
I. Details of progress under this Scheme do not seem to be available in the public domain
So, now, how should you go about it?
I. For submitting application:
OR
II. For information on documentation requirements, please scroll here
III. For any queries, please contact SBI via
- Toll Free Numbers: 1800 1234, 1800 2100, 1800 11 2211, 1800 425 3800
OR
- Toll Number: 080-2659 9990
OR
OR
- Chat with an agent by scrolling here
OR
Go on then…and do spread the word!
Sources:
