15th December, 2017

Government to Business

Make in India Soft Loan Fund for Micro, Small & Medium Enterprises (SMILE)


Objective:

To provide soft loan, in the nature of quasi-equity and term loan on relatively soft terms to MSMEs to meet the required debt-equity ratio for establishment of an MSME as also for pursuing opportunities for growth for existing MSMEs

Target MSME Sector:

  • all the identified 25 Make in India sectors as indicated below or other sectors as may be added, in the Make In India Programme.

Eligible Enterprises:

  • Emphasis will be on covering new enterprises in the manufacturing as well as services sector.
  • Existing enterprises undertaking expansion, to take advantage of new emerging opportunities, as also undertaking modernization, technology upgradation or other projects for growing their business will also be covered.
  • Loans extended under the scheme cannot be used for repayment of earlier loans.

Minimum Promoter's Contribution:

15% of the project cost for projects upto Rs 1 Crore and 20% of the rest. 

Term Loan:

Upto 75% of the project cost. 

Soft Loan:

  • 10% of the project cost subject to a maximum of Rs 20 lacs. 
  • Upto 15% of the project cost for the enterprises promoted by SC/ ST/ Persons with Disabilities (PwD) and women, subject to maximum of Rs 30 Lac
  • Persons belonging to these categories must own controlling state (i.e. 51% or higher). On expiry of 3 years from the date of first disbursement, the outstanding soft loan together with any dues thereon shall be converted into secured term loan and the entire loan shall carry applicable rate of interest as per internal rating of the borrower.  

Upfront Fee:

  • Upfront fee of 0.5% plus applicable service tax

Rate of Interest:

  • As per credit rating and linked to PLR. 
  • However, the scheme offers concession in rate of interest for initial 3 years from the date of first disbursement to help the enterprises minimize interest burden during its implementation and initial operational stage. 

Minimum Loan Size:

  • Rs 25 Lacs

Repayment Period

  • Generally upto 7 years inclusive of the moratorium upto 1 - 1/2 year for term loan and upto 2 years for soft loan. 

Security:

  • As applicable under the scheme

Other conditions:

  • As applicable under the scheme. 

For more information, please contact us at services@indiahub.com


Direct Discounting Scheme (Equipment’s) [DDS(E)]


Objective & Purpose

  • The scheme enables the purchase / sale of indigenous machinery / capital equipment by purchaser / manufacturer in the MSME sector through deferred payment facility by discounting the Bill of Exchange with SIDBI.

Eligible customers

  • The scheme covers small machinery manufacturing units, service sector units and construction industry.

Eligibility criteria

  • Either Purchaser / Seller can belong to MSME sector.

Methodology

  • After sanction of limit to either seller or purchaser, the Bills of Exchange are lodged along with Resolution/ Declaration, Certificates from machinery supplier & purchaser, Letter from purchaser’s banker, Reconciliation statement as per prescribed formats. The applicable stamp duty on the BoE has to be paid.

Tenor

  • Usance ranges upto 5 years, which can be allowed upto 7 years.

 

Quantum of assistance

  • Quantum of limit is based on firm enquiries in hand as also projected sales, in respect of Sellers; and in respect of Purchasers, based on a specific requirement for implementation of a new project or for expansion.

Rate of Discount

  • Discount rates are linked to the internal credit rating. Presently, the rate is PLR – 2.5% for BoE co accepted by a Scheduled Commercial Bank and between 12.25% p.a to 14.50% p.a where limits are backed by security other than co acceptance by banks.

Security

  • Limits backed by Bank Guarantee or Co-acceptance of bills by a Scheduled Commercial Bank.
  • In respect of facility backed by alternate security, charges on movable / immovable assets as per prescribed norms.

Please contact for any enquiries | पूछताछ के लिए कृप्या सम्पर्क करें।

www.IndiaHub.com | Services@IndiaHub.com


Trade Finance Scheme/ Raw Material Assistance


Objective and Purpose

  • Several MSMEs source their raw material from large Corporates /PSUs , whose terms are mostly on “cash on delivery (COD), i.e. no credit period is available to the MSMEs on their raw material purchases. This adversely affects the liquidity position of the MSMEs since they also have to provide credit on their sales.
  • The scheme envisages financing such MSMEs for procuring raw materials/inventory which would ease the liquidity position of the MSMEs. The scheme would also help MSME units in availing benefits of bulk purchases such as cash discounts, etc. from their suppliers.

Eligible customers

Purchaser:

Existing assisted MSME units of the Bank with 2 years payment track record with at least one year’s principal repayment track record.

Other Eligibility parameters include at least 3 full years of operations, satisfactory financials viz. earning of cash profits, good repayment record, no arrears/defaults to Banks/FIs etc.

Seller:

  • Generally, large Corporates or their Authorized Dealers. Large corporate would generally mean and include listed corporate entities or entities who have AA rating and above.
  • Should not be an Associate / Group concern of the Purchaser.
  • Should be selling goods which are required by the Purchaser in its normal course of business.
  • Generally, 1-2 sellers from whom the Purchaser purchasing bulk of its requirement should be covered.

Methodology:

Disbursement is made against 100% of the value of Tax Invoice (accepted by the purchaser).

Tenor:

The eligible credit period would be normally within 90 days. The credit period to be fixed keeping in view the working capital cycle of the unit.

Quantum of assistance:

Decided on the basis of total quantum of such purchases and credit period allowed within the assessed overall working capital requirement.

Rate of Discount:

Discount rates are linked to the internal rating of the MSME.

Security:

  • Extension of charge on assets already charged to SIDBI/ Coverage under Credit Guarantee Scheme as per extant guidelines in force.
  • Demand Promissory Note from the Purchaser for the entire quantum of limit sanctioned.
  • Personal Guarantee of the promoters of the Purchaser company / firm / proprietor
  • Post dated cheques from the Purchaser.
  • Any other fixed assets including movables excepting current assets

For more information, please contact us at services@indiahub.com


Sustainable Finance Scheme (SFS)


Objective:

Sustainable Finance Scheme has been carved out with an objective to assist the entire value chain of energy efficiency (EE) / cleaner production (CP) and sustainable development projects which lead to significant improvements in EE / CP / sustainable development in the MSMEs and which are presently not covered under the existing sustainable financing lines of credits.

Eligibility:

  • New / existing MSME units, as per the definition of the MSMED Act 2006, shall be eligible for assistance under the scheme.
  • Existing units should have satisfactory track record of past performance and sound financial position and should not be in default to institutions/banks.
  • Units should have minimum credit rating of investment grade or its equivalent as per internal credit rating model.

Activities eligible for assistance:

  • Renewable energy projects such as solar power plants, wind energy generators, mini hydel power projects, biomass gasifier power plants, etc. for captive/ non-captive use (i.e., power generated is sold/supplied to the grid / off-grid).
  • Any kind of potential CP investments including waste management.
  • Green micro finance (micro loans upto INR 5 lakh to  micro enterprises for green / energy efficient equipment measures)
  • Expenditure on energy audit / environment compliance audit / pollution control & management consultancy services.

  • Expenditure on green rating, BEE star rating, ecofriendly labeling, etc.

  • ISO 50001 / 14000 or other accredited energy /environmental certification.

  • CDM registration related expenditure.

  •  Suitable assistance by way of term loan / working capital to ESCOs implementing EE / CP / Renewable Energy project provided either the ESCO should be an MSME or the unit to which it is offering its services is an MSME.

  • Suitable assistance to OEMs which manufacture energy efficient / cleaner production / green machinery / equipment. The assistance could be either in the form of Deferred Payment Guarantees, Channel Partner / Referral arrangement, etc. Either the OEM should be a MSME or it should be supplying its products to substantial number of MSMEs.

Rate of Interest: 

  • Normal lending rate on the basis of credit rating of MSMEs

For more information, please contact us at services@indiahub.com


Financing End to End Energy Efficiency Investments in MSMEs (4E Financing Scheme)


Purpose:

  • For implementing Energy Efficiency measures on an end to end basis. For meeting part cost of (i) capital expenditure including for purchase of equipment/ machinery, installation, civil works, commissioning, etc. for implementing the Energy Efficiency measures as recommended in the DPR, (ii) any other related expenditure required by the unit, provided it is not more than 50% of (i).
  • Financing of second hand machinery/equipment; purchase of land and construction of building (except minor civil works) shall not be taken up under the scheme.

Eligible Borrower: 

  • MSME units in the manufacturing or services sector.
  • Applicant unit should be in operation for atleast three years and should have earned cash profit in the last two years of operation and should not be in default to any bank/FI.
  • Minimum credit rating of SME4/SER4/CR5 or its equivalent.
  • The unit should have undergone the process of Detailed Energy Audit (DEA) through a technical agency/consultants having BEE certified Energy Auditors. Further, the Detailed Project Report (DPR) prepared by the technical agency/consultant should have been vetted by EEC, SIDBI.
  • The unit should not have availed Performance Linked Grant under the WB-GEF Project for the proposed EE Project.
  • The unit should be in compliance with the Environment & Social Management Framework (refer Appendix I, II & III for details).

Loan Amount and Tenure:

  • Upto 90% of the Project cost with minimum loan amount of ` 10 lakh and maximum loan amount not to exceed ` 150 lakh per eligible borrower under this scheme.
  • Eligible loan amount should not exceed one-fifth of the total turn-over of the applicant unit.
  • The repayment period including initial moratorium period of upto 6 months, shall not be more than 36 months for loans upto ` 100 lakh and 60 months for loans beyond ` 100 lakh.

Promoter's Contribution: 

Minimum promoter’s contribution of 10% of the project cost.

Interest Rate:

2.5% below the normal lending rate as per the credit rating (both fixed and floating options shall be available).

Security: 

  • Hypothecation of assets created under the project including those belonging to the enterprise and not been charged to any other lender.
  • Collateral security, where-ever necessary for adequate asset coverage.
  • CGTMSE cover may be taken, if available.

Appraisal & Sanction related:

  • After the Detailed Energy Audit, the prospective borrower shall submit the Detailed Project Report (DPR) to SIDBI for its vetting by EEC. If required the sample format of the DPR shall be made available by EEC.
  • The Borrower shall submit an application to SIDBI BOs along-with a copy of the DPR vetted by EEC.
  •  Eligible amount of capital subsidy under CLCSS, TEQUP, etc. shall also be sanctioned along with the loan as per prevalent guidelines.
  •  Disbursement shall be made after compliance of terms & conditions of the sanction stipulated in the LoI and documentation as per the extant guidelines for DCS.

For more information, please contact us at services@indiahub.com


Energy Efficiency/clean technology financing scheme


Objective:

To encourage customers to upgrade technology to reduce energy consumption, enhance energy efficiency, reduce c02 emission and improve the profitability of the Indian MSMEs in the long run. Under different lines of credit (LOCs).

Eligibility:

New / existing MSMEs units, as per the definition of the MSMED Act 2006, shall be eligible for assistance under the scheme.

Existing units should have satisfactory track record of past performance and sound financial position and should not be in default to institution/banks.

Units should have minimum credit rating of investment grade or its equivalent as per internal credit rating model.

Activities eligible for assistance:

  • Acquisition (including lease and rental) of energy saving equipment/ facilities, including newly installing, remodeling and upgrading of those existing.
  • Replacement of obsolete industrial furnaces and/or boilers or burner etc., or introduction of additional equipment which improve performance comparable to those of replacement ,
  • Installation or improvement or adoption of such manufacturing machinery and equipment that meet the specific requirement for energy performance standard provided by the related energy conservation act/ code in  India (e.g. Top runner Equipment, energy labels etc.).
  • Green building-installation  of building envelopes, equipment, heating system, lighting and electrical power/ motors in compliance with Energy conservation building code (ECBC)/LEED/ GRIHA/ IGBC
  • Setting up health centers, pharmacy labs, pathology labs, diagnostic labs, clinics etc.
  • Introduction of the equipment that utilize alternative energy sources which can reduce GHG emission such as natural gas, renewable energy, biogas etc. instead of fossil fuel such as oil and coal etc.

Rate of Interest:

  • Normal lending rate as per credit rating

Minimum promoter’s contribution:

  • 25% for existing units (relaxation as per SIDBI norms)
  • 33% for new units (relaxation as per SIDBI norms)

Eligibility investment:

As per the equipment listed at ESEL and EMEL hosted in SIDBI website and modified from time to time under respective LOC.

For more information, please contact us at services@indiahub.com


Growth Capital & Equity Assistance Scheme for MSMEs


Objective & Purpose:

To provide growth capital to deserving Micro, Small & Medium Enterprises as defined under MSMED Act 2006, for:

  • Bridging the gap in the means of finance for expansion/ modernization/ scaling up. New businesses/ diversification by entrepreneurs with established track record can be considered, selectively.
  • Intangibles or non-asset creating investments viz product development, marketing related expenditure, R&D, investments in quality control, energy efficiency equipment, etc.
  • Margin money for working capital or working capital on selective basis
  • Any other bonafide expenditure required for growth of the business

Eligible customers

The enterprise should be an MSME as per MSMED Act, 2006 at the time of application for assistance; and fulfills any one of the following criteria :

  1. 3 years profitability
  2. 2 year satisfactory banking track record
  3. Preference will be given to Customers assisted by Private Equity investors / Venture Capital Funds / Angel funds

Instruments of assistance:

  1. Non-participatory Debt Products:
    (a) Subordinated Debt (SD) viz. a debt based assistance which is subordinated to other. secured debt and is quasi-equity in nature.
  2. Participatory Debt Products
    (a) Debt products with royalty participation
    (b) Debt products with equity participation such as Optionally Convertible Debt (OCD), Optionally Convertible Subordinated Debt (OCSD) viz. Debt which is convertible to Equity along with Equity kickers
  3. Equity based products viz. Optionally Convertible Cumulative Preference Shares (OCCPS)

Quantum of assistance:

  • Need based generally not below `25 lakh and subject to internal norms of SIDBI.
  • Upto 50% of post project tangible networth

Tenure:

  1. Upto 7 years (including need based moratorium). Depending upon the cash flows and requirement of the customer, lower tenure can also be considered.
  2. For equity investments, the exit should be proposed within the above period.
  3. Repayment could be structured in a flexible manner based on the cashflows of the enterprise.

Rate of Interest (coupon rate):

  • As per the prevailing rate structure of SIDBI based on internal rating
  • Generally, 2%-3% above SIDBI’s Prime Lending Rate.

Security:

The assistance shall generally be secured by first charge on tangible assets acquired out of assistance.

For more information, please contact us at services@indiahub.com


Start-up Assistance Scheme (SAS)


Objective and Purpose:

To provide structured financing for “startups” and “early stage enterprises” mostly in sectors which traditionally do not involve physical assets like technology, biotech, asset light service sector businesses, web/ mobile based businesses, clean technologies, social ventures, etc. Innovative business models in other asset based sectors could also be considered selectively.

The financing instruments would have structural flexibility and features to enable maximum chances of the project stabilization. The key objective is to help small enterprises achieve operational stability or hand hold to get mainstream bank financing or facilitate further angel/Venture Capital financing.

Eligibility:

  • Early stage units where revenue has commenced after product acceptance by
    – At least one corporate customer with repeat orders, or
    – In case of retail consumers, a trend of revenue for 6 months.
  •  Early stage Micro, Small & Medium Enterprises (MSME) as defined in the MSMED Act, 2006 (Constitution of the units to be Private Limited Companies):
    – Generally not in existence for more than 5 years; or
    – not received adequate and regular bank credit facilities (except under Credit Guarantee Trust for Micro & Small Enterprise or Over Draft against Fixed Deposits); or
    – Could have incurred losses in past years. However, a clear plan for profitability (EBIDTA, cash and net level) should be in place over next 2 years

Instruments of assistance:

  • Optionally Convertible Debt (OCD) (OCD is a debt instrument where SIDBI has the right to convert entire/part outstanding amount into equity capital whenever a pre-determined event triggers)
  • Overall exposure could also include non-fund based facilities like Bank Guarantee, Letter of Credit, etc.
  • Sub debt (SD) (Sub debt is subordinated in security & repayments to lenders who have given secured loans to the enterprises and is quasi equity in nature) could also be considered (upto 50% of networth) under SAS in case companies have prior bank assistance.

Quantum of assistance:

  • Need based subject to a maximum of `200 lakh and Equity kicker (1%-2% equity on paid up capital at par or suitably structured kicker)
  • Assistance will be generally released in tranches based on milestones.

Eligible heads for financing:

Capital Expenditure, Working Capital, Intangible project heads, Preliminary and Pre-operative expenses, Interest During Construction period (IDC) / Stabilization fund, Contingencies, any other bonafide head required for the project/ business.

Rate of Interest (coupon rate):

  • Currently 14% per annum

Repayment Period:

  • Upto 7 years including need based moratorium.

Security:

  • The assistance shall generally be secured by first charge on tangible assets, acquired under the assistance.
  • The assistance may also be covered under the Credit Guarantee Scheme of CGTMSE (Credit Guarantee Trust for Micro and Small Enterprises) subject to availability of primary security including some tangible assets; Units assisted under the above arrangement shall bear all the expenses and fees for coverage under CGTMSE

For more information, please contact us at services@indiahub.com


Scheme for Asset Backed Assistance to ServiceSector Entities


Objective

To meet the credit needs of entities / projects creating fixed assets as part of the project / business or offering fixed assets as collateral.

 

Indicative Profile of Such Businesses

• Hotels, Hospitals, Logistic Companies etc.

Eligibility

• New / Existing Service Sector Entities

Forms of Assistance

• Term Loan/ Revolving Term Loan / Line of Credit

Quantum of Assistance

• Need based. Generally not less than `  50 lakh.

• Maximum assistance is subject to caps not exceeding `  50 crore for registered MSME units and `  35 crore for other eligible service sector projects.

Eligible Heads for Financing

• Project assistance: for setting up new facilities or upgradation/expansion of  existing facilities. Along with capex, assistance could also be provided for WC gap/ margin money for WC, intangibles and any other bonafide business        expenditure.

• Exclusive equipment finance : exclusive assistance for equipment

• Non project assistance: Won capex assistance for WC gap/ margin money for WC, intangibles, and any other bonafide business expenditure.

Rate of Interest

• As per credit rating and linked to PLR

Repayment Period

• Upto 12 years including moratorium for project based assistance.

• For non project assistance, upto 5 years including moratorium.

• For exclusive equipment financing, generally 3-6 years including            moratorium.

• Repayment could be fixed installments or ballooned in line with the                         expected cash flow.

• For seasonal industries/ businesses, repayment could be suitably structured

Security

• The assistance shall be secured by assets acquired under the assistance and/ or other unencumbered assets of the borrower.

• Other acceptable collateral securities, as may be stipulated.

Upfront Fee

• Upto 2 %

 

Please contact for any enquiries | पूछताछ के लिए कृप्या सम्पर्क करें।

www.IndiaHub.com | Services@IndiaHub.com

 


Asset Light Scheme for Service Sector Entities


Objective

  • To meet the credit needs of the ‘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/rented premises. The key objective is to provide finance to the emerging segments in the services sector with lower collateralrequirements.

Indicative Profile of Businesses

  • Restaurant Chains, budget hotel chains, diagnostic/specialty clinic chains, gyms/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 and stock , etc.

 

Eligibility

  • 3 years in operation
  • Established model of profitability with net profits in atleast 2 of last 3 years. VC/PE assisted companies which have not achieved profitability could also be assisted selectively if they present a clear plan/ trend for achieving profitability.
  • Other financial norms as specified from time to time.New entities could be considered selectively only if they are-
  • Promoted by entities/promoter group with such track record as above in similar/ related line of business.
  • Franchisees of well-known franchisors (with track record and franchising experience) for maximum assistance of ` 100 lakh.

Quantum of Assistance

  • Need based. Generally not less than `  50 lakh.
  • Maximum assistance is subject to caps not exceeding ` 50 crore for registered MSME units and ` 35 crore for other eligible service sector projects.

Eligible Heads for Financing

  • Capex including investment in light assets like interiors, equipment, furnitures& fixtures, project related intangibles etc.
  • Working Capital Gap

Rate of Interest

  • As per credit rating and linked to PLR

Repayment Period

  • Generally 5-7 years including moratorium.
  • Repayment could be suitably structured for seasonal businesses.

Security

  • The assistance shall be secured by tangible assets, acquired under the assistance and/or other unencumbered assets of the company.
  • Collateral requirement of 30-50% of assistance.

Upfront Fee

  • Upto 2 %

Please contact for any enquiries | पूछताछ के लिए कृप्या सम्पर्क करें।

www.IndiaHub.com | Services@IndiaHub.com

 


TIFAC - SIDBI, Technology Innovation Fund (SRIJAN Scheme)


Objective

To support MSMEs towards development, up-scaling, demonstration and commercialization of innovative technology based project. The Scheme will providedevelopmental loan at flexible terms & interest rate to encourage / promote development / innovation of new technology / process / productandits commercialization.

Eligible customers

New / existing MSME units eligible for assistance fromSIDBI.

TERMS OF ASSISTANCE UNDER THE SCHEME

Quantum of assistance

1. Upto 80% of the project cost subject to maximum of`100 lakh.

2. Assistance more than ` 100 lakh may be considered selectively.

Eligible Project Cost

• Capital expenditure [land, building, plant & machinery, MFA, etc.]

• Intangibles– patents/ copy rights / R&D / purchase of technology

• Pre - operative expenses / Interestduring construction period Working capital margin

• Marketing / brand building expenses

• Contingencies

• Any other head required for the project

Upfront Fee

• Not more than 0.5% of the sanctioned amount + service tax as applicable.

Instruments

Term Loan

Rate of Interest

Not more than 5% p.a.

Repayment Period

The loan repayment period including moratorium should generally not be more than 6 years from the date of the completion of the project.

Security

• First charge on assets (both moveable / immoveable) created under the project.

• First / paripassu charge on other assets of the unit.

• CGTMSE cover could be taken, wherever possible.

• Personal guarantees of promoters.

Promoter’s contribution

• Minimum 20% of the project cost.

Please contact for any enquiries | पूछताछ के लिए कृप्या सम्पर्क करें।

www.IndiaHub.com | Services@IndiaHub.com


Working Capital Assistance to MSMEs


Objective

To provide timely and adequate WC assistance to eligible MSMEs for meeting WC requirements under the SIDBI – IDBI Working Capital Arrangement.

 

Eligibility parameters

Should be an eligible MSME unit.

WC assistance shall be considered to any of the following category of customers:

i. Existing customers who are solely banking with SIDBI (including enhancement).

ii. Existing customers of SIDBI (who are also banking with other banks) and have placed major share of immovable security with SIDBI.

iii. Existing well performing units who do not enjoy WC facility with any other bank.

iv. New entities, where term loan is considered by SIDBI.

Nature of assistance

All forms of rupee assistance for financing WC requirement.

Financial Parameters

Satisfying minimum financial parameters under the scheme.

Desirable Financial Parameters

Total outside liabilities/ tangible Networth(TOL/TNW)

Not to exceed 4:1

Current Ratio

1.25

Interest Coverage

Minimum 1.5 times

Overall Asset Coverage

1.3 for existing units and 1.4 for new projects

Internal Rating

As per existing Bank’s Norms

 

For more information, please contact us at services@indiahub.com


Secured business loan for MSMEs (SBL)


Objective:

  • To provide fast dispensation of credit to MSMEs in manufacturing as well as service sector for planned or unplanned business related expenditure on the strength of the collateral security and repayment capacity based on current operations.

Eligibility:

  • Existing MSME units having net profits in 2 years out of last three years with cash profits in all three years.
  • The borrowers should not be defaulter to any bank/FI
  • Other financial norms as specified from time to time

Nature of Assistance:

  • Open term Loan

Quantum of Assistance:

  • Linked to gross cash accruals and collateral security value
  • Maximum assistance not exceeding `10 crore

Eligible Heads for Financing:

  • For any bonafide business expenditure.

Rate of Interest:

  • Fixed Interest Rate linked to PLR as per credit rating

Repayment Period:

  • Upto 10 Years including moratorium

Security:

  • Immovable properties by way of collateral

Foreign Currency Assistance:

  • Foreign Currency assistance can be availed under the scheme towards creation of tangible assets subject to natural hedge & Other terms & Conditions.

For more information, please contact us at services@indiahub.com


Inland Letters of Credit (INLCs)


Purpose:

Inland Letters of Credit (INLCs) are being provided to our existing MSME customers:

  1. INLCs for purchase of capital equipment, which forms part of the project cost against which SIDBI has sanctioned assistance.
  2. INLCs for purchase of raw material against theWorking Capital assistance sanctioned by SIDBI.

Amount of assistance (limit):

Need based. INLC is sanctioned to the unit as a sub limit, i.e. the total Fund based and non fund based exposure at any point of time shall not exceed the aggregate financial assistance sanctioned to the customer.

Margin:

Not applicable, since INLC is proposed to be opened against aggregate sanctioned assistance where the margin / promoter contribution requirements have already been taken into account

Security:

Since the INLC facility shall form part of the aggregate sanctioned assistance, no separate security norms has been stipulated.

Any other special new conditions to be imposed:

Depends on the operational requirements of the customers.

Financial Parameters:

Satisfying minimum financial parameters under the scheme.

For more information, please contact us at services@indiahub.com


Guarantee Scheme for MSEs


Purpose

  • Guarantee shall be provided on behalf of industrial concerns & service sector units in Micro & Small Enterprises Sector (MSEs).

Product

  • Both Financial and Performance Guarantee.
  •  

Purpose of Guarantees

  • Guarantee shall be issued only for the customer’s normal trade / business.

 

Nature of Requirement

  • Guarantee shall also be offered for meeting the adhoc / one time requirement of the borrower.

Eligible Customers

  • Existing customers (industrial concerns and eligible Service Sector units in MSE Sector) with satisfactorytrack record.
  • New customers (MSEs sector and eligible ServiceSector units) shall also be considered both fundbased and non-fund based limits.
  • Guarantee would not be available as a standalonefacility, i.e. Guarantee would not be considered onbehalf of customers who have not / are not willingto avail debt assistance from SIDBI.

Financial Parameters

  • Satisfying minimum financial parameters under the scheme.

For more information, please contact us at services@indiahub.com


General Purpose Term Loan


Objective:

  • Setting up of a new MSME unit.
  • Expansion / Diversification/ modernisation/ technology upgradation/ quality certification of existing units in MSME sector.
  • Acquisition of additional machinery/equipment.
  • For undertaking various marketing related activities
  • Any other activity (having linkages and benefits accruing to MSME sector from the proposed assistance).

Desirable Financial Parameters

Debt Equity Ratio(DER)

Not exceeding 3:1

Minimum Promoter’s Contribution

New Projects- 33%

 

Existing well performing units- lower contribution [up to 25%] could be accepted

Period of Loan

Generally maximum 8-10 years for term loan (including moratorium upto 18 months)

Upfront Fee (non refundable)

Generally 1% of the term loan sanctioned

Asset Coverage Ratio (ACR)

Minimum overall asset coverage of 1.3 for existing units and 1.4 for new entities including FACR of 1.00

Nature of assistance:

Term loan and other forms of assistance such as Working Capital Term Loan, etc.

Amount of assistance (limit)

Need based (minimum `10 Lakh).

 

For more information, please contact us at services@indiahub.com


Scheme for facilitating payments to MSMEs in Construction Sector (CRE)


Objective

  • The scheme will facilitate timely payments to such • In all other cases (i.e., rentals or sale or both etc) the
  • The scheme is intended to cover Commercial Real Estate [CRE] exposures in construction sector Line of Credit [excluding solely residential projects].

Eligibility:

Entities in construction sector (exposure classified as CRE as per RBI guidelines). Preferably corporate entities. 

Assistance is subject to MSME linkages.

Other financial norms as specified from time to time.

Forms of Assistance:

  • Term Loan
  • Line of Credit

Quantum of assistance:

  • Based on MSME engagement in the project(s)
  • Not exceeding `35crore per project. 
  • Assistance shall not exceed `10 crore for sole proprietary concerns.

Rate of Interest

As per internal rating of the Borrower and linked to PLR

Repayment Period

Term loan

  • Repayment period including moratorium should be commensurate and aligned to the projected revenues. 
  • Generally up to 3-5 years including moratorium in case, where the revenue will be by way of sale of
  • In all other cases (i.e., rentals or sale or both etc) the MSME vendors in the construction sector repayment including moratorium may be allowed up to 8-10 years.

Line of Credit

  • Repayment period of 1-3 years including moratorium period of 3 months

Security:

For project specific assistance

  • All movable and immovable assets of the project
  • Other Collateral securities, if any stipulated
  • Escrow of project receivables for project based assistance

For LoC

  • Collateral security by way of Immovable property of at least 150% of assistance.

Upfront fee:

  • Upto 2%

For more information, please contact us at services@indiahub.com


Coming Soon

Liaison Services in USA


  • Liaison Service with County & State Government for License & Permits
  • Liaison Service for Grants, Financial Assistance, Project Financing
  • Introduction to third-party service providers; Immigration Attorney, Corporate Attorney, CPA (Accountants), Banks, Freight Forwarding Agents, Custom Clearing Agents etc..

For more information, please contact us at services@indiahub.com


MSME Receivable Finance Scheme (MSME RFS)


Objective and Purpose:

To mitigate the problem of delayed payments to MSMEs in respect of their credit sales to large purchaser companies by offering finance against bills of exchange/ Invoices arising out of such sales.

The scheme covers discounting of bills of exchange/invoices arising out of sale of indigenous components / parts / sub-assemblies /accessories /intermediates by an MSME unit. Services provided by an enterprise in the services sector (eligible service provider) to purchaser companies are also covered.

The scheme helps the MSMEs in

  1. Quicker realization of receivables.
  2. Discounting at competitive rates.
  3. Efficient Cash Management.

Eligible Customers: 

Limites are sanctioned to: 

  • Well-performing Large Corporates / Purchaser Companies with sound financials for covering their purchases of components / sub-assemblies / parts / accessories and services obtained from MSMEs.
  • MSME sellers for early realization of dues from large Corporates by discounting the bills.

Eligibility criteria: 

  • Either the Purchaser or Seller needs to qualify as SME (manufacturing/service sector unit).
  • Eligibility parameters include satisfactory financials viz. Turnover, net worth, profit, positive cash flow, liquidity position, external/internal credit rating, security, etc.

Methodology:

  • MSME suppliers draw Bills of Exchange on Purchaser companies against supplies made/ services provided by them and the Bills of Exchange are accepted by the Purchaser companies.
  • Wherever Bills of Exchange are not furnished by the large Corporates, discounting is made as per agreed terms between the Corporate and SIDBI based on acceptance on the Invoices and proof of delivery challan / Goods Received Note.

Instruments of assistance:

Bills of Exchange backed by Invoices / Invoices

Tenor:

Usance of Bills of Exchange/ Invoice not exceeding 90 - 180 days. 

Quantum of assistance:

Need based. Not more than `50 crore in respect of eligible large purchaser corporates.

Validity of limit:

Limits are sanctioned with validity for one year, with a half-yearly review and annual renewal.

Rate of discount:

Discount rates are linked to the internal/ external credit rating of the MSME / large corporate

Security:

Depending on whether the Purchaser Corporate is eligible for secured exposure or unsecured exposure, limits are sanctioned based on either:

  • Tangible security, viz. Charge on movable / immovable assets, Fixed Deposits, etc.;
  • Letter of Credit
  • Bank Guarantee
  • Security on residual charge on movable/immovable  assets of eligible large purchaser corporates.

For more information, please contact us at services@indiahub.com