SIDBI INTRODUCE NEW SCHEMES TO ASSIST MSME LIQUIDITY NEEDS THROUGH MEDIATOR

In the duration of the Coronavirus pandemic and to assist COVID-19-affected enterprises. The RBI has given SIDBI (SLF-2) another liquidity facility of Rs.15000 crore to meet the MSME firm’s liquidity and credit needs. Special programs are being created to support MSMEs through banks, NBFCs, and MFIs to kick off the SLF-2. To ensure broader coverage, the Scheme to Assist MSME Liquidity Needs through Intermediaries would include all qualified firms with investment-grade ratings, regardless of the organization.

SPECIAL LIQUIDITY FACILITIES (SLF-1)

Last year, the RBI supplied SIDBI with a particular liquidity facility of Rs.15000 crore (SLF-1). As a result, the SIDBI has developed specific liquidity programs to assist MSME sectors that have been affected by the COVID-19 outbreak.

SPECIAL LIQUIDITY FACILITIES (SLF-2)

The SIDBI has announced the following special liquidity schemes as per the Scheme to help MSME sector liquidity needs through mediators for support to MSME sectors afflicted by the COVID-19 epidemic to operationalize the SLF-2:

  • Exceptional liquidity support for MSME through MFI(SLS-II-MFI 2021).
  • The Special refinance Scheme (SLS-II-SRS 2021).
  • NBFCs provide great liquidity support for MSME (SLS-II-NBFC 2021).

SPECIAL REFINANCE SCHEME (SLS-II-SRS)

The Scheme intends to offer qualifying PLIs with refinancing support to help them meet the liquidity needs of their Micro and Small Business end-borrowers.

The following are the qualifying criteria and other requirements for the Special Refinance Scheme 2021 for MSME Liquidity Support:

ELIGIBILITY FOR SCHEME

This plan is open to commercial banks (public, private, and foreign) and small finance banks (SFBs). SIDBI will provide support under the program to scheduled banks with large existing portfolios of MSEs/microcredit and sound financials who meet the following criteria:

Small Finance Bank

During the first three years, the SFB and the previous business preceding conversion to SFB (considered together) should have made a profit. The RBI has granted the SFB a final license to function as a Small Finance Bank, and it has begun operations. The SFB must adhere to the following Benchmarks requirements:

  • Non-performing assets (NPAs) must be equal to or greater than 7% of net capital.
  • The small finance bank’s net worth should be at least rupees 100 crores.
  • The small finance bank’s Capital to Risk(Calculated) Assets Ratio (CRAR) should be at least 15%.

Other Banks

The bank must have been in business for at least three years and profit in a minimum of two of the previous three financial years. The bank should follow the following guidelines, as per the certified financial statements:

  • The bank must have a minimum net value of Rs.50 crore.
  • The bank’s capital to risk-calculated assets ratio should not be just under 9%.
  • To be qualified for this plan, the bank’s total non-performing assets (NPAs) must not exceed 10% of its total assets.

SECURITY UNDER THIS SCHEME

This loan’s private security is centered on the Complete Consensus. The bank shall maintain in deposit for SIDBI all assets acquired directly or indirectly from MSME, including movable and immovable properties, book debts, receivables, executable claims, guarantees, assigns, transfer of funds, and other protections.

TENURE

  • The loan under the unique liquidity program must be returned within 12 months or by June 10, 20211, whichever comes first.
  • Under the SRS 2021, SIDBI will provide a 36-year repayment period for the loan, supplemented by SIDBI’s own money.

BENEFITS OF THE SCHEME

The plan is open to any organization that meets the definition of a micro or small business as defined by the Medium Enterprises Development Act of 2006 or the term specified in a GoI Gazette Notification. MSE end customer accounts up to SMA-1 type are qualified for refinancing under the scope of ECLGS 2.0 in the healthcare industry and 26 other higher stress areas. 

We at SDS Fin Advisory LLP are engaged in the field of Project Finance, MSME Loan, Working Capital, Unsecured loan, and Government Subsidy work for 20 years. We provide the best service with the most satisfactory result in a timely manner. We have more than 1000 happy clients. Feel free to contact us on 848596003 or info@sdsfin.in.

SIDBI’s NEW Scheme for MSME at attractive ROI of 6.00% to 8.00%.

The STHAPAN Scheme aims to promote capital investments in the MSME sector by assisting Greenfield Manufacturing units. It provides financial assistance by the way of term loan for plant & machinery, purchase of land, construction of factory building, purchase of equipment, Misc. fixed assets, installation of rooftop solar projects, etc. under the product linked incentive schemes. This scheme is valid up to 31st March 2022 and may be extended on a need basis.

Eligibility Criteria:

  • The main objective of STHAPAN is to provide financial assistance to Greenfield units for setting up new units.
  • The Promoters of the new entity should have 5 years of experience in the business. 

 

List of sectors under STHAPAN Scheme
Automobiles and Auto Components (excluding dealership but including general Engg.) Specialty Steel
White Goods (including ACs and LEDs) Textile Products: MMF Segment and technical textiles
High-efficiency solar PV modules Advanced Chemistry Cell (ACC) Battery
Drugs and Pharmaceuticals(including ingredients) Food Products
EV Charging Stations Medical devices
Healthcare Centers (including Hospitals, nursing homes, and diagnostic centers) Mobile Phone and accessories
Agri allied sectors Renewable sectors (including rooftop solar
Aerospace and defense Garmenting
Paper & Paper Products Rubber and Rubber Products
Plastic & Plastic products (excluding single-use plastic Chemical and Chemical Products
  • MSMEs projects other than the above-mentioned sectors may also be allowed to be covered under the scheme subject to in-principle approval from RO In-charge.  

Quantum of Assistance:

  • Term Loan up to Rs.1500 Lakh per unit/ borrower, subject to a maximum of 75% of the project cost.
  • Higher Term loan for plant & machinery, purchase of land and construction of the building, etc. up to Rs.2000 Lakh to one unit shall be subject in-principle approval as per Loan Policy.
  • Promoters have to contribute a minimum of 25% of the project cost.

Interest rate and Repayment:

  • Interest rate will be 6.00 % to 7.30 % p.a for the first year. From the next years, it will be as per internal rating.
  • Repayment up to 7 years including moratorium up to 2 Years.

Conclusion:

This scheme will boost capital investment in Greenfield manufacturing units.  Attractive rate of interest, term loan up to Rs. 2000.00 lakhs and quick sanctions are the main benefits under the scheme. MSME setting up their new units in identified sectors are benefited under this scheme.

If you need further clarification, we at SDS Fin Advisory LLP are engaged in the field of Project Finance, MSME Loan, Term loans, Machinery loans, Working Capital loans, unsecured loans, and Government Subsidy work for 20 years. We provide the best project finance consultancy services and MSME subsidy services in Ahmedabad with the most satisfactory result in a timely manner. We have more than 1000 happy clients. 

Feel free to contact us on 848596003 or sdsfinadvisory305@gmail.com.

SIDBI introduce NEW ARISE scheme for MSME at attractive ROI of 5.50 % to 8.00%

The scheme aims to provide financial Assistance by Term loan to the existing MSME units who want to undertake expansion/modernization/capital expenditure in the same line of business by way of purchase of land, construction of factory building, Purchase of equipment, Plant & Machinery and Misc. Fixed assets, Installation of Rooftop Solar Projects, Acquisitions of other energy efficiency devices. This scheme is valid up to 31st March 2022 and may be extended on a need basis.

 Eligible Criteria:-

  • Financial assistance shall be provided to Micro, small and medium enterprises engaged in high growth and priority sectors (including sunrise sector), thrust sectors for undertaking expansion/modernization/capital expenditure.
  • Brownfield enterprises having a minimum of 2 Years of operation and Audited accounts for at least two full years are eligible under the ARISE scheme.
  • There must be cash profits in the last audited financial results.

 

List of Eligible Sectors under ARISE scheme
Automobiles (excluding dealership) Automobile Components (include general Engg.) Medical Equipment, healthcare and hospitals, and Nursing homes and Diagnosting Centers
Chemicals and Chemical products Paper & Paper Products (include Printing) Renewable Energy including Rooftop solar Projects
Electronic systems Electrical Machinery Rubber and Plastic
Food Processing Textile and Garments Ceramics and Stone Processing
Iron and steel Drugs and Pharmaceuticals Biotechnology
Aerospace& Defence
  • MSME setting their projects other than the above-mentioned sectors may also allow being covered under the scheme subject to the approval of RO In- charge.

Quantum of Assistance:

  • Term loan up to Rs. 500 Lakh per borrower subject to a maximum of 80 % of the project cost shall be allowed.
  • For smaller loans up to Rs. 3 crore for machinery/ equipment finance, 100% of the project cost shall be allowed.
  • Higher term loan for plant & machinery, purchase of land, construction of factory building, etc. up to Rs. 700 lakh to one borrower can be allowed subject to the approval of RO In-charge.
  • Promoters have to contribute a minimum of 20% of the project cost. In case of loans up to Rs. 3 crore on machinery/equipment where 100% financing is proposed, cash collateral up to 25% of project cost on the lines of SPEED scheme shall be applicable.

 Interest rate and Repayment: 

  • Interest rate will be 5.50 % to 6.80 % p.a for the first year. From the next years, it will be as per internal rating.
  • Repayment up to 7 years including moratorium up to 2 Years.

Conclusion:

This scheme is to promote existing MSME engaged in high growth and priority sectors for undertaking Expansion/modernization projects.  The main benefits of the schemes are attractive ROI, 80% finance of project cost, maximum subsidy benefit, lowest security requirement, and quick sanction. MSME who wants machinery finance for their expansion project can avail 100% financing up to Rs. 3.00 Crore with an attractive rate of interest.           

We at SDS Fin Advisory LLP, the best Project finance consultant in Ahmedabad are engaged in the field of Project Finance, MSME loans, Term loans, Machinery Loans, Working Capital loans, unsecured loans, and Government Subsidy work for 20 years. We provide the best service with the most satisfactory result in a timely manner. We have more than 1000 happy clients. 

Feel free to contact us on 848596003 or sdsfinadvisory305@gmail.com.