46 XX | Enlightener Series | B. Central Government Schemes | B.10 SIDBI’s Term Loan to Enhance Production of MSMEs

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 this scheme…

SIDBI’s Term Loan to Enhance Production of MSMEs (STEP) Scheme was launched by Small Industries Developmental Bank of India (SIDBI) with the aim of providing financial assistance to meet the working capital requirements of MSMEs.

How is it being implemented?

Under STEP Scheme, direct financial assistance in the form of loans is given to,

MSMEs
- For augmenting Net Working Capital (NWC) and/or to execute urgent confirmed orders
- To fund incremental working capital requirement resulting from non-enhancement of regular Working Capital (WC) limits from existing lenders

What’s on offer?

I. Product

Term loan in rupee and foreign currency
Ticket Size:
- Existing customers: upto ₹3 Crores
- New Customers: upto ₹2 Crores

II. Purpose:

Working capital requirements

III. Borrower Type:

Individual, Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Limited Liability Company (LLC), Private Limited Company, Public Limited Company
For more 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 the loan disbursed under the Scheme
Collateral: Availability of cover under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Guarantee: Nil
Insurance: For more information around this, please contact SIDBI via means mentioned below

V. Interest Rate

Marginal Cost of Funds Based Lending Rate (MCLR) based Return on Investment (ROI) as per internal rating
For more information around this, please contact SIDBI via means mentioned below

VI. Processing Fee

Likely to be nil
For more information around this, please contact SIDBI via means mentioned below

VII. Margin Money Requirement

Can be as low as 0% as the Scheme envisages to finance upto 100% of borrower’s finance requirement
For more information around this, please contact SIDBI via means mentioned below

VIII. Tenure, Repayments & Pre-Closures

Tenure: upto 3 years including a moratorium of upto 6 months
For information around repayments, re-closures, other terms etc., please contact SIDBI via means mentioned below

IX. Turnaround Time

Features of the Scheme include simplified documentation, quick sanction and disbursement
Hence, loan under the Scheme is likely to be sanctioned within 2 days. For more details around this, please contact SIDBI via means mentioned below

Interested? Read ahead to check your eligibility….

I. Are you a Micro-Enterprise, Small-Enterprise or a Medium-Enterprise per MSMED Act 2006?

II.

If you are a new customer, has your business been in operations for a minimum of 3 years?

If you are SIDBI’s existing customer, has your business been in operations for a minimum of 2 years?

III.

If you are a new customer, has your business been generating operating profits for the past 2 years?

If you are SIDBI’s existing customer, has your business been generating operating profits for the past 1 year?

IV.

Is your business NOT availing WC limits or Overdraft (OD) facility from any Banks or Financial Institutions (FIs)?

Has your WC limits from existing lenders not been enhanced?

V. Has your business been in NO default to any bank, financial institution?

If your answers to the above is an emphatic YES, you are all set to avail loan under STEP Scheme!

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

I. Details of progress under STEP Scheme don’t seem to be available in the public domain

So, now, how should you go about it?

I. For submitting an application:

Visit SIDBI’s nearest branch office. Scroll this page to find one

Visit their Regional Incharge. Find one nearest to you here

II. For information on loan application and indicative list of documentation required, please contact SIDBI’s nearest branch office or their Regional Incharge. You may also refer here or here

III. For any queries,