SBI Franchise Ecosystem Financing (FEF) for Franchising Tie-Ups





SBI Franchise Ecosystem Financing offers a wide range financing options for franchising tie-ups to Indian SME sector. Working Capital Financing and Capital Expenditure (Capex) Financing are the core business models. It delivers mutual benefits to both franchiser and franchisee.

SBI Franchise Ecosystem Financing (FEF) for Franchising Tie-Ups

Benefits to Franchiser as a SBI FEF Partner

  1. Scale-up business rapidly and on-board more franchisees.
  2. Tenure and repayment schedule customized for business cash flows.
  3. Dedicated relationship: single window clearance at head office.
  4. Invoice-based online financing: e2e visibility of franchisee operations.
  5. Transaction-related offerings: wallets, mPOS, co-branded cards etc.

Benefits to Franchisee as a SBI FEF Partner

  1. Minimum collateral and margin requirements.
  2. Most competitive interest rates - lower than standalone franchise funding.
  3. Dedicated relationship managers assigned for all franchisees.
  4. Widest branch network of SBI with 17,000 + touchpoints.

1. Working Capital Financing for SBI FEF

  1. Product: Cash Credit facility under SBI FeF (Franchise Ecosystem Financing) scheme.
  2. Purpose: 100% invoice financing based on projected sales.
  3. Eligibility: Leads to be pre-qualified by Franchiser and recommended to SBI.
  4. Amount of facility: Minimum and maximum will be Based on business needs.

Product details

  1. Interest Rate: Lowest Rate of Interest (Base Rate + 0.30% to 0.80%).
  2. Credit period: 30-60 days (as per business cycle).
  3. Provision of Grace period for repayment.
  4. Provision of ad-hoc limit at no extra cost.
  5. Charges: Minimum unified charges for processing fee + inspection fee + EM charges.

Security

  1. No financial recourse to or guarantee from franchiser.
  2. 100% hypothecation of stocks and receivables financed.
  3. Collateral: Minimum requirement of 25% (land, building, investment or cash).

2. Capex Financing for SBI FEF

  1. Product: Term Loan facility under SBI FeF (Franchise Ecosystem Financing) scheme.
  2. Purpose: Funding of "Project Cost" - setting up / construction / renovation activity, including franchisee fee. This includes ceiling, Flooring, layout, colouring, Air Conditioning, DG set, lighting, furniture, fixture etc.
  3. Eligibility: Leads to be pre-qualified by franchiser and recommended to SBI.
  4. Margin: Minimum 30% brought in by franchisee.

Product details

  1. Interest rate: Base Rate + 2% to 3%.
  2. Repayment: 3-5 years based on business cash flows.
  3. Moratorium: period for store setup time.
  4. Charges: 0.10% of the term loan subject to minimum of INR 5,000/-.

Security

  1. Hypothecation of assets created out of bank.
  2. Collateral: Minimum requirement of 25% (land, building, investment or cash).
  3. Guarantee: Personal Guarantee from franchisee.

 Some of the Select Credentials for Franchise Ecosystem Financing (FEF)

 Some of the select credentials for franchisee and dealer financing

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