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Service Sector Asset Light Scheme

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Status: Active

Classification: Public Sector Scheme

Release Date(s):
22nd July 2021

Offering: Loan/Credit

Entity Type: Development Financial Institution

Reading Time: 5 Mins

Ticket Size: ₹50 Lakhs to ₹50 Crores

Entity Name: Small Industries Development Bank of India

#Views: 63

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 updation, 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 email.

 

About the scheme…

Service Sector Asset Light Scheme was launched by Small Industries Development Bank of India (SIDBI) to meet the credit needs of asset light type of businesses mostly in the new emerging segments of service sector, which do not involve creation of fixed assets and generally operate from leased or rented premises.

 

How is it being implemented?

Under Service Sector Asset Light Scheme, direct financial assistance is given to

  • Service businesses registered as Micro Small Medium Enterprise (MSME) units or other eligible service sector projects as defined by SIDBI
  • Indicative profiles of these service businesses are as follows:
    • Restaurant Chains, budget hotel chains, diagnostic or specialty clinic chains, gyms or fitness centers, media, entertainment companies, and other service businesses which invest in tangible but light assets like interiors, equipment, computers, etc.
    • Organized retail outlets which invest primarily in interiors, stock etc.
  • Note that definition of Micro-enterprise or Small-enterprise or Medium-enterprise per MSMED Act has been changed since July 1, 2020. Please click here for concise details

What’s on offer?
I. Product:

  • Term loans
  • Revolving term loans
  • Ticket size:
    • Minimum loan size of ₹50 Lakhs
    • Maximum loan size of ₹50 Crores for registered MSME units, and ₹35 Crores for other eligible service sector projects. For information around other eligible service sector projects, please contact SIDBI via means mentioned below

II. Purpose:

  • Acquisition of light fixed assets
  • Project related intangibles
  • Working capital requirements
  • For information around this, please contact SIDBI via means mentioned below

III. Borrower Type:

  • Individuals, Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Limited Liability Company (LLC), Private Limited Company, Public Limited Company
  • For information around this, please contact SIDBI via means mentioned below

IV. Security or Collateral or Guarantee or Insurance:

  • Security: First charge over assets created out of SIDBI’s finance and/or other unencumbered assets of the borrower
  • Collateral: 30-50% of assistance
  • For information around requirement of guarantee and insurance, please contact SIDBI via means mentioned below

V. Interest Rate

  • As per credit rating, and linked to Prime Lending Rate (PLR)
  • For information around this, please contact SIDBI via means mentioned below

VI. Processing Fee

  • For information around this, please contact SIDBI via means mentioned below

VII. Margin Money Requirement

  • Ranges between 20-33%
  • For information around this, please contact SIDBI via means mentioned below

VIII. Tenure, Repayments & Pre-Closures

  •  Tenure ranges between 5 – 7 years including moratorium
  • Repayment can be suitably structured for seasonal businesses
  • For information around other conditions, please contact SIDBI via means mentioned below

IX. Turnaround Time

  • For information around this, please contact SIDBI via means mentioned below

 

Interested? Read ahead to check your eligibility…

For existing entities:

I. Has your business been in operation for at least 3 years?

II.

Does your business have an established model for profitability with net profits in at least 2 of the last 3 years?

OR

If you are a Venture Capital or Private Equity assisted business which has not achieved profitability, do you have a clear plan or trend for achieving profitability?

 

For new entities:

I.

Are you promoted by entities or promoter group with such track record or eligibility criteria as mentioned above for existing entities, in similar or related line of business?

OR

Are you franchisees of well known franchisors (with track record and franchising experience) and looking for maximum assistance of ₹1 Crore?

Additionally, there may be other financial norms specified from time to time. For information around this, please contact SIDBI via means mentioned below

If your answers to the questions above are an emphatic YES, you are all set to avail loans under the SIDBI’s Service Sector Asset Light Scheme!

 

So…how big is this scheme and what has been done so far?

I. Details around SIDBI’s Service Sector Asset Light Scheme don’t 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 application form and indicative list of documentation that would be required, please contact SIDBI

III. For any queries,

  • Please contact SIDBI on toll free number 1800226753 from 10.30 am to 6.00 pm

OR

OR

OR

 

Go on then…and do spread the word!

 

Sources:

  1. About the Scheme
  2. SIDBI’s Loan Policy for FY 2020-21 for Direct Credit Operations

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