Tag: sidbi bank loan scheme

MSME Subsidy for Manufacturing Unit

Aatmanirbhar Gujarat Subsidy Scheme for MSMEs 2022

Posted on by SDS Fin Advisory

Introduction

The year 2022 brings exciting new opportunities for Micro, Small, and Medium Enterprises (MSMEs) in Gujarat, as the government introduces subsidy schemes to accelerate their growth and success. One of the key schemes in focus is the Aatmanirbhar Gujarat Subsidy Scheme for Assistant to MSMEs 2022.

Subsidies provide much-needed funding support that enables MSMEs to invest, construct, upgrade, and grow their businesses. With these subsidies in place, MSMEs can access tailored lending solutions with flexible repayment terms, lower interest rates, and minimal collateral requirements.

The government’s commitment to supporting MSMEs through these subsidy schemes reflects its vision of unlocking the economic potential of Gujarat’s MSME sector. By creating a favorable business environment and providing financial incentives, the government aims to foster entrepreneurship, drive innovation, and stimulate job creation in the state.

What are the MSMEs criteria for Subsidy purposes?

According to the subsidy schemes and criteria set for MSMEs by the Government of India, the definition and classification of Micro, Small and Medium Enterprises (MSMEs) is based on the following investment ranges:

  1. Micro enterprise – Investment in plant and machinery or equipment does not exceed Rs 1 crore
  2. Small enterprise – Investment in plant and machinery or equipment is more than Rs 1 crore but does not exceed Rs 10 crore.
  3. Medium enterprise – Investment in plant and machinery or equipment is more than Rs 10 crore but does not exceed Rs 50 crore.

The investment slabs used for determining eligibility and applicable subsidy rates or incentives for MSMEs under various schemes are based on this classification.

For example, if investment in Plant & Machinery is Rs. 5.00 Cr then the enterprise will be categorised as Small Enterprise.

The operative Period of the Scheme is 5 years from 05/10/2022- 04/10/2027

Here are the brief of various subsidy scheme available to MSME. Click here to know more about  Aatmanirbhar Subsidy Scheme. 

Subsidy Type Description
Capital Subsidy Offers subsidies upto 25% on term loans for procuring fixed capital assets like land, buildings, and machinery, varying based on Taluka categorization.
Interest Subsidy Provides interest subsidies up to 7% on term loans for up to 7 years, with special provisions for women, differently-abled, and young entrepreneurs.
SGST Subsidy Provides reimbursements of up to 100% of net SGST paid for up to 10 years to eligible MSMEs, varying from 80-100% based on the taluka category.
Start-up Subsidy Tailored capital and interest subsidies to nurture start-ups, covering significant expenses in early stages to stabilize and scale up operations.
Power Subsidy Offers 35%  additional Subsidy on Power Expenses  and interest subsidies to MSMEs investing in solar or renewable energy infrastructure, including capital cost subsidies and low-cost financing support.
Exhibition Subsidy Provide subsidy for the participation of various exhibition in local, state and international leval.
Electricity Duty Subsidy 100% reimbursement of electricity duty fees considerably to make MSME operations more cost-competitive, aiding in better profit margins and working capital management.
MSME Loan Support Facilitates partnerships with financial institutions for tailored lending solutions with flexible repayment terms, lower interest rates, and minimal collateral requirements, among other benefits.

These various types of subsidies aim to unlock the economic potential of Gujarat’s MSME sector. By providing financial assistance and support, the government strives to create a conducive environment for MSMEs to thrive and contribute significantly to the state’s economy.

Aatmanirbhar Gujarat Subsidy Scheme for Assistant to MSMEs: Driving Force for Entrepreneurship

The Aatmanirbhar Gujarat Subsidy Scheme for Assistant to MSMEs is a key initiative aimed at promoting entrepreneurship and supporting the growth of Micro, Small, and Medium Enterprises (MSMEs) in Gujarat. This comprehensive scheme offers various subsidies and incentives to enable MSMEs to thrive in a competitive business environment.

Eligibility Criteria

To avail the benefits under this scheme, MSMEs need to meet certain eligibility criteria. The specific eligibility requirements may vary based on factors such as investment range, location, sector, and business classification. However, some common eligibility criteria include:

  1. Being registered as an MSME under the relevant government authority
  2. Adhering to all statutory regulations and compliances
  3. Maintaining a good track record in terms of loan repayment and creditworthiness
  4. Fulfilling any additional criteria specified by the scheme

It is essential for entrepreneurs and MSME owners to thoroughly understand the eligibility criteria before applying for subsidies or incentives under this scheme.

(Source: Gujarat Government Industries & Mines Department)

Different Types of Subsidies under the MSME Schemes in Gujarat

The MSME schemes in Gujarat offer various types of subsidies to support the growth and development of micro, small, and medium enterprises. These subsidies are designed to provide financial assistance and incentives to eligible businesses, helping them thrive in a competitive market environment. Here’s a closer look at the different types of subsidies available:

Capital Subsidy

Provides up to 25% term loan subsidies for fixed capital assets such as land, buildings, and machinery, based on Taluka categorization.

Interest Subsidy

Offers up to 7% interest subsidies on term loans for up to 7 years, with special provisions for women, differently-abled individuals, and young entrepreneurs.

SGST Subsidy

Enables up to 100% net SGST reimbursement for a period of up to 10 years, with varying rates based on taluka category.

Start-up Subsidy

Tailored capital and interest subsidies designed specifically for start-ups in their early stages.

Power Subsidy

Provides an additional subsidy of 35% on power expenses and interest subsidies for MSMEs investing in solar or renewable energy infrastructure.

Electricity Duty Subsidy

Offers 100% reimbursement of electricity duty fees incurred by the MSMEs.

These subsidies play a crucial role in easing the financial burden on MSMEs and creating an enabling environment for their sustained growth and productivity. By understanding the details of each type of subsidy, businesses can make informed decisions regarding their eligibility and potential benefits.

Remember that these schemes have specific eligibility criteria and application processes, so it’s important for MSMEs to thoroughly understand the requirements and guidelines before applying.

Conclusion

The Aatmnirbhar Gujarat scheme offers a comprehensive range of initiatives like SGST reimbursements, attractive capital and interest subsidies, renewable power benefits, and accessible credit to create a congenial growth environment for MSMEs.

By alleviating infrastructural barriers through focused MSME subsidies, reducing tax/electricity burdens, and providing funding support, the scheme empowers small enterprises to amplify investments, foster innovation, and boost competitiveness.

This expansive blueprint for self-reliance aims to unlock the full economic potential of Gujarat’s MSME sector.

The Government also brings various loan scheme promoting MSME to get instant low interest and without collateral security finance.  To know more you can check our previous blogs on 100% MSME Loan without Collateral Security. 

 

SIDBI LOAN SCHEME UNDER COVID-19

SIDBI LOAN SCHEME UNDER COVID-19

Posted on by SDS Fin Advisory

SIDBI, India’s Small Industries Development Bank, has launched financial schemes for those engaged in producing medical products or services linked to Covid-19, stepping up the fight against Corona virus and supporting Micro and Small Businesses (MSEs) in tackling the present situation. The SIDBI Assistance to Facilitate Emergency (SAFE) answer against the corona virus scheme, which offers loans of up to Rs 50 lakh, focuses on helping certain MSEs start tasks that will help fight the pandemic. It could also help them purchase production machinery, raw materials, and consumables.

Role of the SAFE scheme

MSEs Make hand sanitizers, gloves, masks, headgear, safety gowns, aprons, bodysuits, ventilators, goggles, laboratories, and other products with a direct connection to Covid-19 may apply for a loan of up to Rs 50 lakh.
A 5% annual interest rate will be charged for a cumulative loan repayment period of 5 years.
Customers from both SIDBI and non-SIDBI will apply.
No prepayment or processing fees.

Another program, SAFE Plus, has been developed to meet additional working capital requirements by the government orders connected to the virus’s war.

Some features of the SAFE Plus scheme

SIDBI is responsible for the credit information costs.
Non-SIDBI customers must have a cash surplus in the previous year’s financial statements and an account not in the SMA 1/ 2 band.
Open to all MSMEs, are current SIDBI clients or fresh ones with clear orders from state government officials.
Escrow or Guardianship in support of SIDBI can be used as protection for non-SIDBI customers.
The amount owed is Rupees 100lakh, with an annualized rate of 5%.

SIDBI’s smile scheme

The scheme’s aim will provide MSMEs with soft loans, such as quasi-equity and term loans, on reasonably favorable terms to meet the necessary total debt for both starting a business and expanding an existing one.

The specially designed scheme provides various benefits to help the cash-strapped Indian MSME market, which is currently going through a difficult period.
Reasonable interest rates, soft loan financing of part promoter involvement, longer maturity duration, and speedy dispensation are just a few of the program’s highlights.

Eligibility Criteria

As per SIDBI, the scheme focuses on supporting new businesses in both the industrial and service sectors. Furthermore, while short listing companies, the focus is on funding small businesses in the MSME sector.
Current and new SIDBI customers are eligible for the program.
Existing businesses expanding to take advantage of new opportunities and pursuing modernization, technological upgrades, or other projects that will help them develop their business are included.
There is also a focus on the twenty-five listed Make in India industries. Additionally, eligible proposals from any other field can be considered on a case-by-case basis, based on their merits.

Offers under This Scheme

A minimal Loan Amount of Rs 10,00000 for the verified account and Rs 25,00000 lakh for other applications is available under the scheme. There is also a long payback period of up to ten years, with a 36-month suspension. Some of the program’s other highlights are mentioned below;
The loans provided under the program cannot be used to repay previous loans.
The policy also needs a minimum of 15% supporter investment with a maximum DER of 3:1.
Rates of interest begin at 8.36 percent* and go up from there (subject to change).

Conclusion

SIDBI(sidbi loans for startups) has established a new funding window (as part of its current Smile Scheme) that offers near/long loans at competitive rates. These loans are intended to help the healthcare industry, such as hospitals, nursing homes, and clinics, meet their coronavirus-fighting needs. Loans are provided out at a low-interest rate of 5% within 48 hours as per the schemes.

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 need any assistance kindly contact us on 848596003 or info@sdsfin.in.

Sidbi startup loan

NEW SCHEME FROM SIDBI UNDER COVID-19

Posted on by SDS Fin Advisory

NEW SCHEME FROM SIDBI UNDER COVID-19

Covid Startup Assistance Scheme (Sidbi Startup Loan):-

Startups are typically resource-constrained because they’re young, dynamic, and inventive. With the COVID-19 outbreak, which has caused lockdowns, startup founders must find new ways to work for their companies. They need to meet their capital needs while still planning for potential expansion. The tiny Industries Development Bank of India recognizes the operating and economic difficulties that businesses face and has been working to supply financial help and stability to them via schemes a bit like the COVID-19 Startup Assistance Scheme (‘CSAS’) (Sidbi Startup Loan). This program would help create startups that have demonstrated their ability to regulate the economic effects of Covid-19 while also ensuring the protection and financial security of their employees. SIDBI (Sidbi Startup Loan) doesn’t provide credit to businesses and instead focuses on equity and fund infusion.

SIDBI Scheme and Process:-

The CSAS program helps startups that will directly take advantage of the program. This program aims to supply businesses with fast capital expenditures within the next 45 to 90 days. As a result, various Committees of 5 members (3 from SIDBI and its candidates and a couple from the Wealth Management industry) will be formed to expedite the method. The processing charge is 1% of the sanctioned amount.
New businesses can get a loan of up to INR 2 crore via this program. The application will be screened using the following procedure:

⦁ On the SIDBI Scheme portal, the scheme document will be open.
⦁ On the SIDBI Scheme portal, an application called Credit Appraisal Memo (CAM) and a Self-Assessment Tool (SAT) will be made available.
⦁ Within 30 days of the scheme’s launch, startups must complete the CAM, SAT and email the documents to a given email address (csas@sidbi.in).
⦁ The Recommendation Committee will conduct a credit review and a video conference with the startup and the VC investor.
⦁ Following that, SIDBI’s planned Internal Credit Committee (ICC) will regularly approve loans to businesses. Businesses and VC investors may be asked to participate in a video chat conference during the ICC conferences.
⦁ Acceptance or denial status will be shared in the mail on the same day.
⦁ The part of Loan Agreements and supporting documents will be entirely digital.

Eligibility Criteria:-

⦁ Startups identified by the government have earned funding from at least one of the Alternate Investment Funds listed with the government SEBI (Securities and Exchange Commission) (Sidbi Startup Loan).
⦁ The unit economics of a startup should be optimistic.
⦁ The business should’ve been in existence for no more than ten years.
⦁ Startups with a minimum of 50 workers are eligible. This could include the troops on the ground.
⦁ Business must have a good attitude—estimated Career Earnings.
⦁ Business with projected revenue of Rs 10 crore to Rs 60 crore in FY 2019 and FY 2020.
⦁ The startup’s sponsor/developer should have put his own money into the Company.
⦁ Startup companies should have taken appropriate precautions to ensure the security and economic health of the workers.

Security:-

COMPULSORY SECURITIES:
⦁ First Pari-Passu charge on current benefits for the Company.
⦁ Coverage for crucial personnel up to the amount spent to protect the facility.

SOME CONDITIONS:

⦁ Without SIDBI’s permission, the sponsor or shareholder cannot make investments.
⦁ Any debt, like Venture Debt, cannot be paid with support.
⦁ It won’t be a subordinated loan.

Funding Source:

SIDBI’s financial statements, as SIDBI will supply the venture funding directly.

The motive of the scheme;

Aim of providing temporary financial assistance to businesses whose COVID-19 pandemic harms capital and liquidity. This funding is often used to spread money flow needs, like salaries/wages, rent, operating costs, vendor payments, and so on. The loan could even be wont to cover GST refunds.

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. We provide best service with most satisfactory result in timely manner. We have more than 1000 happy clients. Feel free to contact us on 848596003 or info@sdsfin.in.