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The Small Industries Development Bank of India (SIDBI) was established in 1990 to foster and finance the Micro, Small, and Medium Enterprises (MSME) sector. Additionally, it partners with institutions that provide similar services.

SIDBI loans help businesses grow and expand, without them having to provide collateral. Furthermore, the company’s finance schemes are available in an array of amounts and repayment periods. They range from Rs. 10 Lakhs to Rs. 25 Crores, and repayment periods can be up to 10 years. There's no collateral required for loans below Rs. 1 Crore.

Functions of SIDBI

The key functions of SIDBI are:

  • Aid financial institutions in lending to small-scale industries so they can have a healthy financial standing.

  • Loan offers for small-scale industry (SSI) development and production.

  • It also offers help in the expansion of marketing channels for SSI sector products both domestically and internationally.

  • SIDBI promotes industries that create jobs for people in semi-urban areas.

  • It also helps facilitate the timely flow of credit for working capital and term loans to small-scale industries in partnership with commercial banks.

  • SIDBI works to empower employment and upgrade technology in the sector.

Benefits of SIDBI

These are the top benefits of using SIDBI loans:

  • Convenient Interest Rates - Has collaborations with many banks and international financial institutions. By leveraging these partnerships, SIDBI can offer concessionary rates of interest.

  • Custom-Made - Offers loans that are customized to your business needs.

  • Collateral Free - Businessmen can get up to Rs. 1 Crore without having to put up any security.

  • Venture and Equity Funding - Offers equity-based venture capital to small businesses through their subsidiary SIDBI Venture Capital Limited.

  • Subsidies - Seek help from SIDBI to take advantage of various government schemes.

  • Transparency - The process and rates are transparent.

Loan Products Offered by SIDBI

Below, you will find a list of the 6 products that SIDBI offers under Direct Loans:

SMILE (SIDBI Make in India Soft Loan Fund for MSME): SMILE focuses on covering the financial requirements for new enterprises. The loan amount offered under this scheme is a minimum of Rs. 10 Lakhs for equipment finance and Rs. 25 Lakhs for other purposes. There is a maximum repayment tenure of 10 years, with a moratorium period of 36 months.

SMILE Equipment Finance (SEF): With a simplified application process and competitive rates, it's an excellent choice for any MSME entity looking for new equipment financing. The loan has a repayment period of 72 months and starts at a minimum of Rs. 10 Lakhs.

Loans under Partnership with OEM (Original Equipment Manufacturer): This loan scheme is a great option for MSMEs. Eligibility requirements are that the business must have a minimum of three years in operation, and the repayment period is up to 60 months. The maximum loan amount is Rs. 1 Crore.

SIDBI Trader Finance Scheme (STFS): STFS is a loan scheme specifically for retail and wholesale MSMEs that have been in existence for three years at the minimum. The amount of the loan starting from Rs. 10 Lakh can go up to Rs. 1 Crore and it can be repaid over a maximum of 60 months.

Loan for Purchase of Equipment for Enterprise’s Development (SPEED): This loan scheme offers 100% financing and a loan amount up to Rs. 1 Crore for new customers and Rs. 2 Crores for existing ones.

Working Capital (Cash Credit): Working Capital Loan is available to small and medium businesses. With instant approvals, this service offers a flexible loan to meet the needs of the applicant.

Loan Schemes Offered by SIDBI

Loan Scheme

Loan Tenure

Loan Amount

Eligibility Criteria

Smile Equipment Finance (SEF)

72 months

The minimum amount is Rs.10 Lakhs

3 years experience required in the financial or business sector

SIDBI Make in India Soft Loan Fund for MSME (SMILE)

10 years, including a 3-year moratorium

Rs. 10 Lakhs to Rs. 25 Lakhs

Both new and existing enterprises can apply

Working Capital (Cash Credit)

As per the terms and conditions

As per the financial capability of the applicant

Existing consumers of SIBDI and other banks can apply

Loans under the partnership with OEM (Original Equipment Manufacturer)

5 years with an eligible moratorium

Up to Rs. 1 Crore

3 years experience required in the financial or business sector

SIDBI – Loan for Purchase of Equipment for Enterprise’s Development (SPEED)

5 years and a moratorium of 6 months

For new customers: Up to Rs. 1 Crore

3 years of business existence and experience along with profit-making for a minimum of 2 years

For existing customers: Up to Rs.2 Crores

SIDBI-Loan for Purchase of Equipment for Enterprise’s Development Plus (SPEED PLUS)

5 years and a moratorium of 6 months

New customers: Up to Rs.2 Crores

5 years of business existence along with profit-making for at least 3 years.

TOP UP LOAN FOR IMMEDIATE PURPOSES (TULIP)

5 years

30% of existing exposure or 20% of net sales subject to Max Rs. 2 Crores

Existing customers of the SIDBI loan scheme for a year and have good financial records.

Proof of cash profit in the previous financial year

SIDBI TERM-LOAN ASSISTANCE FOR ROOFTOP SOLAR PV PLANTS (STAR)

5 years and a moratorium of 6 months

Up to Rs. 2.5 Crores

Show 2 years of cash profit for existing customers and 4 years of cash profit for new customers, and good financial records

SIDBI ASSISTANCE TO HEALTHCARE SECTOR IN WAR AGAINST SECOND WAVE OF COVID19(SHWAS)

5 years

Up to Rs. 2 Crores

Proof of cash profit for two years for new customers. Existing customers should be able to show cash profit in the previous audited balance.

SIDBI ASSISTANCE TO MSMES TO TACKLE COVID19 PANDEMIC(AROG)

5 years

Up to Rs. 2 Crores

Two years of proof of cash profit for new customers. Existing customers are required to show cash profit in the previous audited balance.

CORONA CRISIS ASSISTANCE FOR TIMELY WORKING CAPITAL (TWARIT)

4 years and a moratorium of 1 year

Total outstanding loans of 20% with SIDBI up to Rs.25 Crore

An annual turnover of Rs.100 Crores and outstanding credit facilities of up to Rs.25 Crores will be required

Additional Loan Products of SIDBI

SIDBI has multiple features that include the following:

  • SIDBI’s Venture Capital: This loan scheme includes major initiatives to fund start-ups. This includes the start-up life cycle fund and SIDBI interventions fund. It also provides funds for the Aspire Fund and India Aspiration Fund.

  • Indirect Finance: Offers indirect assistance to Primary Lending Institutions by providing refinance. The goal is to establish a strong credit flow to the MSME sector, with an extensive branch network across India.

  • Micro Finance: Small Industries Development Bank of India offers loans to small-time entrepreneurs in the form of microfinance.

How to Apply for Loan Through SIDBI

The 5-step process to apply for a loan from SIDBI is as follows:

Step 1: Visit the official website of SIDBI and click on the ‘Borrower’s Corner.’

Step 2: Click on ‘Online Loan Application.’

Step 3: Enter your username and password.

Step 4: The applicant can choose the amount of loan they would like to borrow.

Step 5: A personal details form will appear on-screen. Personal information such as name, username, email, mobile number, business address, state, and district is required. Click ‘Register’ to finish the registration process.

FAQs

  • ✔️What documents should I submit if I wish to apply for a SIDBI direct loan?

    As an applicant, you need to submit address and identity proof, PAN Card, along with business documents.

  • ✔️What are the types of finance offered by SIDBI?

    SIDBI offers Working Capital Assistance, Term Loan Assistance, Foreign Currency Loan, Support against Receivables, Equity Support, Energy Saving scheme for the MSME sector.

  • ✔️Is SIDBI a government bank?

    Its major shareholders are the Government of India, State Bank Of India and Life Insurance Corporation of India.

  • ✔️Is the individual’s credit score taken into consideration when applying for a SIBDI loan?

    No, the credit score is not considered when applying for a SIDBI loan.

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