Small Industrial Development Bank of India (SIDBI), to facilitate the flow of credit to Micro Small and Medium Enterprises (MSMEs) for machine purchase, has launched its new scheme. The scheme, known as SIDBI – Loan for Purchase of Equipment for Enterprise Development (SPEED), will help the small entrepreneurs purchase machinery from Original Equipment Manufacturers (OEMs) at a competitive rate of Interest.
SIDBI is the principal financial institution that helps in the promotion, finance and development of India’s MSME and SME sector. The bank has been catering to various small and medium-sized enterprises with its various direct/indirect schemes that facilitate the flow of credit into the sector.
This newest scheme – SPEED will facilitate the flow of credit to Small and Medium Enterprises for investing in various machinery. Under this scheme, financial assistance of up to 2 crores will be provided to the borrowers for the purchase of equipment for the development of enterprises. The borrowers will also get a time of 2 to 5 years for the repayment of the loan.
The complete details about this scheme are mentioned below:
Target Customers: This scheme will help the customers who seek finance for the purchase of machinery at an attractive Rate of Interest.
Eligibility:
- New borrower to SIDBI: up to Rs 1 Crore
- Existing Borrower: up to Rs 2 Crore
- 2 years of cash profits or stable sales
- Note: Greenfield or rural are also allowed with co-borrower
Coverage:
- Machines purchased from identified OEMs
Rate of Interest:
- 9.25 to 10% p.a. as per internal ratings
- Repayment period – 2-5 years
Key Attractions:
- 100% finance based on 25% FD
- Direct payment to OEM
- Attractive ROI
- No middlemen required
- Pvt. Lease also covered subject to conditions
Quick Sanction & Disbursement:
- Loan to get sanctioned within 3 days of submitting information Documents
- Disbursement within 4 days of sanction
In May, SIDBI reported a 28.22% increase in its net profit, amounting to Rs 519.36 Crore for the March quarter and stated to target more MSMEs and SMEs for financing.