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.
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).
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.
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