OEM Equipment Finance Scheme

What is the scheme?

SIDBI is offering easy financing mechanism through OEM Equipment Finance Scheme to existing MSMEs engaged in Manufacturing and Service sector.

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.

Which units are eligible under this scheme?
Enterprises in existence for 3 years with a satisfactory cash profit for the last 2 years, who are buying equipment directly from OEMs are eligible under this scheme. The unit with interest coverage of 1.50 times for the tenure of the loan with a debt-equity of 3 is 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 1 year to eligible units.

What kind of collateral and margin is required?
It is expected to cover the loan amount with 1.25 times of collateral. Proposals also can be considered for Credit Guarantee. The Promoter’s margin is expected at 25%.