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. 

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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. 

• 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. 

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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.

• 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. 

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NBFCs provide liquidity help to Micro and Small Enterprises (MSEs) affected by the Covid-19 epidemic. In addition, the initiative will give the NBFCs assets to support operational continuity and promote onward lending to small and medium-sized businesses.

Goal of The Scheme

The scheme aims to give liquidity assistance to MSMEs affected by Covid-19 through non-banking investment firms, especially fintech NBFCs. The unique program will provide NBFCs with term loans to ensure operational continuity and advance onward funding to MSME (Micro, Small, and Medium Enterprises).

ELIGIBILITY CRITERIA

NBFC must be recognized by the RBI as an Investment and Credit Company (ICC) to be accepted for this program.

• An NBFC can make term loans through a particular liquidity program if it has been in the company for three years and has three years of balance sheets.
• To be qualified for the plan, non-banking financial companies must have a net-owned fund of Rs.50 crore and a minimum value of assets of Rs.200 crore.
• The financial institution must have a BBB or higher external ratings (as of March 31, 2020).
• The NBFC must adhere to all applicable regulatory regulations.
• According to the Bank’s internal guidelines, the NBFC must pass the Go/No Go Guidelines.

BENEFITS

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.

TENOR

After one year from the time of drawl or June 10, 2022, whichever comes first, the SLS loan must be returned in bullet installments.

SECURITY

The program provides need-based security as per the Bank’s current policies.

PROCESSING FEE

The MSME must pay 0.10 percent of the authorized amount, up to a maximum of Rs.5 lakh, plus GST if required.

ABOUT APPLICATION FORM

Mail attached copies of the duly signed registration form, certificates, and papers to rbisls2_nbfc@sidbi.in.

DOCUMENT

For the SLS program, the following documents are required:

• Information about the company’s promoters and directors.
• Issues of the Parent or Holding/Subsidiary/Associate
• As of March 31, 2021, the Consumer’s and Parent/holding Company’s shareholding patterns are detailed.
• Beneficiary ownership statement.
• A full specification of the most recent Memorandum and Articles of Association is necessary for addition to the organization certificate.
• A legal document of the RBI’s Certificate of Registration
• Annual Reports from the previous three years
• Declaratory statement on banking services
• The most recent Asset Liability Maturity Profile has been lodged with the RBI.
• The RBI has received the most recent certified returns.
• Copy of legal documents like passport and PAN CARD of the promoters/directors and permitted signatories of the firm.
• Each director must sign an assurance giving his or her agreement to examine the CIBIL database and the credit reports included in Annexure-V.
• If personal guarantees are given, the guarantor’s most recent CA verified net worth statements are required.
• Reasons for the most recent rating

FEW MORE DETAILS

NBFCs that finance two-wheeler loans and cannot provide proof of MSE status and NBFCs with a dominant portfolio of gold loans will not be eligible for the plan.

CONCLUSION

The program would provide time loans to banks, NBFCs, and MFIs to maintain system continuity and promote forward lending to MSMEs, according to Sidbi. The loans will be for 90 days. SIDBI is dedicated to assisting MSMEs in surviving the crisis caused by the Covid-19 epidemic. The money will be distributed to qualifying MSMEs through banks, NBFCs, and MFIs. They anticipate that MSMEs’ financial problems will be addressed quickly and adequately by doing so.

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. If you are looking for financial assistance in terms of machinery loan, Term loan, Cash Credit, Export finance, Capital Subsidy, interest subsidy, we are always ready to give you the best guidance and assistance. Feel free to contact us on 848596003 or info@sdsfin.in.

Several small businesses are getting benefits from the latest industrial policy published by the Gujarat government. Several incentives and subsidies are supporting businesses to invest more in the manufacturing and other operations of the business. Several talukas have multiple benefits where the business owners get direct benefits. The industrial policy shared by the Gujarat government promotes businesses on a global level and stimulates sustainable development. The government has decided to provide direct benefits to the MSMEs and increase the shares of state GDP. 

The current industrialization policy is so beneficial for the business owners that can enhance the revenue of the business on a global scale. Recently the Gujarat government is thinking to increase the MSME business by introducing an MSME award for the business. It will strengthen the micro, small, and medium enterprises and their manufacturing will get an instant boost. The government will analyze the quality, production, innovation, and employment to award the MSMEs that will motivate them to increase production on a global level. 

For startups, the government has introduced the best MSME startup program under the industrial policy in 2020. The startups will also get several benefits in the schemes, and their modal will be appreciated on an international level.

The Gujarat government has introduced the “scheme for awards to MSMEs” with the latest industrial policy.

• The name of the scheme is given as “Scheme for Awards to MSMEs” by the government. 
• The scheme is for five years from the date of commencement, i.e., 07/08/2020. The businesses will get benefits till 2025.

Now let’s check what type of industries can take benefit of the schemes and understand them properly.

Micro, Small and Medium Enterprises- The business should follow the regulations set by the government for Micro, small, and medium enterprises according to the definition given in the MSME development act 2007. The business should register with Udhyog Aadhar Memorandum or Udyam registration.

Eligible Business- 

• The business should be operable for at least three years, and continuous production or supply should be active from these three years. 
• The businesses should have all the clearances to perform the business, and all the applicable licenses should be there. 

State awards for Best MSME

• Different awards for micro, small and medium enterprises-  
• There are three awards in each category for MSMEs. 
  • Hike in production and profit.
  • All the measures are there to prove the quality and not affecting the environment.
  • Technological advancement and innovations.
• There is prize money of 2 lakhs for the winners that will strengthen their business. Also, they will get an appreciation letter from the government with a trophy. 

Awards for Commercial startups MSMEs

The winner will get the prize money of 2 lakh rupees, a trophy, and the appreciation letter. 

What will be the procedure of the scheme?

There are several things the government will introduce every year.

• The MSME commissioner will offer schemes through local newspaper advertising every year. The awards groups will be notified by the widely spread advertising media and newspapers. 
• The MSME commissioner will release the application and procedure for these schemes, and businesses can check these out while registering their business. 
• There will be the constitution of a committee that will check the procedures and applications of the business. 
• After the registration, the selected businesses will be announced by the MSME commissioner. 

The MSME startup will get only one award in each category; there are not several awards for the startups in the industrial policy 2020.

Who will sanction the budget?

The government has decided on a budget head to sanction the amount of the schemes. The budget head will grant the amount to the commissioner.

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• SIDBI has launched two loan programs for micro, small, and medium-sized enterprises (MSMEs) to assist them with the required financial support in the battle against the COVID-19 outbreak. Thanks to these two new fast credit distribution schemes, MSMEs will access financing for manufacturing and services related to the procurement of oxygen tanks, oxygen concentrators, oximeters, and critical medicines.
• SIDBI is implementing these new programs to help MSMEs swiftly developing their facilities, which will help the country tackle the disease.

The two new loan programs:-

1. AROG:- MSMEs that manufacture pulse oximeters, approved medications, ventilators, and personal protective equipment will be eligible for this funding.
2. SHWAS:- This program will provide funding to MSMEs that manufacture oxygen cylinders, oxygen generators, oxygen concentrators, and liquid oxygen and offer transportation facilities, storage, and refilling facilities for these products.

• The programs were developed with the support of the Government of India (GoI), and they make it easier to finance the manufacture and delivery.

Eligibility Criteria for AROG (ASSISTANCE TO MSMES FOR RECOVERY & ORGANIC GROWTH)

• In the most recent audited financial statements, existing customers – cash benefit (i.e., FY 2020).
• In the last two years, additional SIDBI customers have resulted in a cash profit.
• Exceptional Credit history with current bankers and financial institutions (FIs).

Eligibility Criteria for SHWAS (SIDBI ASSISTANCE TO HEALTHCARE SECTOR IN WAR AGAINST the SECOND WAVE)

• Existing Customers – Benefit in cash in the most recent audit reports financial statements (i.e., FY 2020)
• In the last two years, SIDBI has added new clients, resulting in a cash profit.
• It is essential to have a credit record with a present banker / financial firm.

Amount Of Loan And Interest Rate For AROG:-

• Term loan for the buying of machinery or equipment
• Capital Expenditure is a term used to describe the amount Purchase of raw resources or fulfillment of verified orders with a term loan
• A maximum loan of 2 crore
• Return on investment 5.5% to 6% per annum

Amount of Loan and Interest Rate for SHWAS:-

• Term loan for the buying of machinery or equipment
• Working Capital is a term used to describe the amount Buy of raw resources or fulfillment of verified orders with a term loan a maximum loan of 2 crore
• Return on investment 4.5% to 5% per annum

Some Extra Features:-

• Time of repayment Term Loans is available for up to 60 months. WCTL – For a period of up to 18 months
• A twelve-month moratorium is added.

Documents for Both Schemes:-

• Documentation for an easy loan
• To acquire supplies, machines, MFAs, and raw materials, the balance is paid directly to the provider.

Application:-

• The application is just one page long.
• Proper research and standard KYC scans.
• After receiving the mandatory details, the sanction is issued within 48 hours.

Attractive Part of AROG Scheme:-

• Financing is available up to 100%.
• Choice with very low collateral.
• There is no payment charge.
• Desirable interest Rates.
• Loan Assurance is also a choice (Charges to be borne by SIDBI).

Attractive Part of SHWAS Scheme:-

• Financing is available up to 100%.
• There is no payment charge.
• Desirable interest Rates.
• Credit Assurance is also a choice (Charges to be borne by SIDBI).

Official Announcement for Schemes:-

“The Endeavour is to provide financial services to respectable MSMEs that have grown to the opportunity in protecting the people in this time of need by holding their operations operational and providing medical care at all stages,” stated SIDBI Chairman and Managing Director on this subject.

Given the ongoing harm caused by a corona virus and the fact that it is a national emergency, SIDBI has developed these schemes to aid medical professionals in their battle against the deadly virus.

If you are planning to loan and subsidy, you are on the right page. We are engaged since last 20 years in the field of Project Finance, MSME Loan, Working Capital, Unsecured loan and Government Subsidy work. We provide best service with most satisfactory result in timely manner. We have more than 1000 satisfied customers.

We at SDS Fin Advisory LLP are engaged in the field of Project Finance, MSME Loan, Working Capital, Unsecured loan and Government Subsidy work since 20 years. If you are looking for financial assistance in terms of machinery loan, Term loan, Cash Credit, Export finance, Capital Subsidy, interest subsidy, we are always ready to give you best guidance and assistance. Feel free to contact us on 848596003 or info@sdsfin.in.