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SMILE Equipment Finance Scheme

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Status: Active

Classification: Public Sector Scheme

Release Date(s):
17th September 2022
10th March 2021

Offering: Loan/Credit

Entity Type: Development Financial Institution

Reading Time: 6 Mins

Ticket Size: Upto ₹10 Lakhs

Entity Name: Small & Medium Enterprises

#Views: 50

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…
SIDBI Make in India Soft Loan Fund for Micro, Small & Medium Enterprises (SMILE) Scheme 
was launched on August 18, 2015 under Small Industries Development Bank of India (SIDBI) by the then Finance Minister Arun Jaitley to give a boost to Government of India’s ‘Make in India’ campaign, with a focus on financing smaller Micro, Small & Medium Enterprises (MSMEs, defined as per MSMED Act 2006) in the country.

SMILE Equipment Finance (SEF) Scheme is an offshoot of SMILE Scheme that focuses on machinery loans for MSMEs.

 

How is it being implemented?

Under SEF Scheme, direct financial assistance, on relatively soft terms, is given to MSMEs in

  • 25 identified Make in India sectors indicated below or other sectors, as may be added, in the Make In India Programme
    • Click here to find 25 identified Make in India sectors
  • Deserving proposals from any other sector could also be assisted on merits

 

What’s on offer?
I. Product: 

  • Term loans
    • Minimum loan size of ₹10 Lakhs
    • Maximum loan size capped, based on financial profile of the borrower. For information around this, please contact SIDBI via means mentioned below

II. Purpose:

  • Acquisition of Plant & Machinery
  • Acquisition of Minor Fixed Asset (MFA). For information around this, please contact SIDBI via means mentioned below
  • Need based civil construction, if any

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

  • First charge over assets created out of SIDBI’s finance
  • For information around requirement of security, collateral, guarantee and insurance, please contact SIDBI via means mentioned below

V. Interest Rate

  • In line with interest rates charged under SMILE Scheme, which is as per credit rating, internal rating and linked to Prime Lending Rate (PLR)
  • However, scheme offers concession in interest rate for initial 3 years from the date of first disbursement to help enterprises minimize interest burden during its implementation and initial operational stage. For information around the same, please contact SIDBI via means mentioned below. Below is the indicative interest rates that may be charged:
    • Fixed rate of 9.15% to 9.95% per annum
    • For MSMEs promoted and controlled (with stake of 51% or higher) by SC/ST/PwD/women, further interest concession of 0.05% may be offered. For information around the same, please contact SIDBI via means mentioned below
  • Such concessional rate will be converted to normal interest rates applicable on expiry of 3 years in case the unit becomes ineligible for concessional funding under the Scheme or other events as defined in the loan agreement
  • On expiry of the said 3 years, borrower can opt for either fixed or floating rate of interest which shall be fixed at the time of sanction and will be a part of the loan agreement. For information around the same, please contact SIDBI via means mentioned below. An indicative range may be 11.70% – 12.70%

VI. Processing fee

  • 0.5% plus applicable taxes is charged under SMILE Scheme
  • For information around processing fee for SEF Scheme, please contact SIDBI via means mentioned below

VII. Margin money requirement

  • Comparatively lower margin money requirement
  • For information around margin money requirement, please contact SIDBI via means mentioned below

VIII. Tenure, Repayments & Pre-Closures

  • Maximum repayment period of 72 months including moratorium
  • For information around other conditions, please contact SIDBI via means mentioned below

IX. Turnaround Time

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

 

Interested? Read ahead to check your eligibility….

I. Are you running a Micro-enterprise or Small enterprise or Medium-enterprise defined per MSMED Act, meaning, investment in plant and machinery or equipment of your enterprise does not exceed ₹50 Crores and turnover does not exceed ₹250 Crores? (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)

II. Has your enterprise been in existence for at least three (3) years?

III. Does your enterprise command a satisfactory financial position i.e. is it profitable?

Additional criteria if you are looking to avail concessions provided to SC / ST / PwD / women as enumerated above:

IV. Is your business promoted and controlled (with stake of 51% or higher) by you?

If your answers to the questions above are an emphatic YES, you are all set to avail loans under the SEF Scheme!

 

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

I. SMILE Scheme was launched with an allocated corpus of ₹10,000 Crores

II. Latest details don’t seem to be available in the public domain

 

So, now, how should you go about it?

IMPORTANT NOTE: You may have to clear the cookies in your browser to access the links below

I. For submitting application:

II. For information on application form and indicative list of documentation that would be required, please click here and download form after selecting SMILE Equipment Finance which is the second option on the vertical bar on the right hand side

III. For any queries,

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

OR

 

Go on then…and do spread the word!

 

Sources:

  1. About Scheme 1
  2. About Scheme 2
  3. About Scheme 3
  4. About Interest Rate on SMILE Scheme
  5. About Launch Date of SMILE Scheme: Finance Minister Arun Jaitley launches two funds by SIDBI

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