What is the scheme?
SIDBI has come up with extended funding option for existing MSMEs engaged in manufacturing with a lower margin, a requirement for procurement of equipment from reputed OEMs through SPEED Scheme. SPEED stands for SIDBI loan for Purchase of Equipment for Enterprise’s Development.
How much funding can a unit expect under the Scheme?
The loan is disbursed as Term Loan and can be offered up to ₹ 100 Lakhs to the first time borrower with SIDBI, whereas existing borrowers can avail the loan up to ₹ 200 Lakhs under SPEED scheme.
Which units are eligible under this scheme?
SME units having existence for more than 3 years with the last 2 years cash profit are eligible under this scheme. First-time borrowers for SIDBI have to buy the equipment from approved OEMs with SIDBI which are Lokesh Machines Ltd., Jyoti CNC Automation Ltd, Milacron India Pvt Ltd, ACE Designers Ltd, ACE Manufacturing Systems Ltd., Bharat Fritz Werner (BFW), Batliboi Ltd. Whereas, MSMEs having loan record with SIDBI can ask for assistance for procuring machinery from any OEM. Purchase of used or second-hand machineries are not eligible for financing under this scheme.
The unit with Interest coverage of 1.50 times for the tenure of the loan with debt-equity of 3 and Current Ratio of 1.25 are the basic financial parameters which are taken into consideration.
What are the loan tenure options?
Loan Tenure is dependent on Risk Profile and Project Implementation Schedule and cash flow of the unit. SIDBI offers extended tenure up to 5 years including moratorium up to 6 months to eligible units.
What kind of collateral and margin is required?
Proposals can be considered under Credit Guarantee without any collateral. Based on borrower profile, a margin of 15% to 25% is asked in the form of FD.