SBI SME Collateral Free Loan Scheme

SBI provides collateral free business loan. New and existing Micro and Small Enterprises engaged in Manufacturing and Service sector can avail this scheme. For Manufacturing sector, original investment in plant & machinery should be upto Rs 5 crore and for Service sector, original investment in equipment upto Rs 2 crore.

Purpose of SME Collateral Free Loan Scheme

  1. Working capital needs (Fund Based + Non Fund Based).
  2. Term loan for construction of Building, office, acquisition of machines / equipments including expansion and modernization of the unit.

Nature of Facilities Allowed in SME Collateral Free Loan Scheme

They are one or multiples of the following subject to bank's discretion:

  1. Cash Credit
  2. Term Loan
  3. Letter of Credit
  4. Bank Guarantee


Loan Amount of SME Collateral Free Loan Scheme

Total Exposure to the unit: Upto Rs. 1.00 crore (All facilities WC, TL & NFB facilities)

Interest Rate of SME Collateral Free Loan Scheme

Attractive rates of interest. See SBI website for updated interest rates.

Service Charges for SBI SME Collateral Free Loan Scheme

  1. 50% concession in processing and service charges. See SBI website for updated service charge and processing fees.
  2. Other charges as applicable.

Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) Guarantee

  1. Borrowers eligible under the scheme will be covered under CGTMSE guarantee scheme.
  2. The Guarantee Fee & Annual Service Fee as per the rates prescribed by CGTMSE from time to time to be borne by borrower.

Security for SBI SME Collateral Free Loan Scheme

  1. Security as defined by CGTMSE: “Primary Security” in respect of credit facility shall mean the Assets created out of the credit facility so extended and / or Existing Unencumbered assets which are directly associated with the project or business for which the credit facility has been extended. (i.e. Plant, Machinery, land & building pertaining to the project or business).
  2. Guarantee: No third party guarantee is required. However in case the constitution of the borrower is proprietary or partnership, the personal guarantee of proprietor / partner is not treated as third party guarantee

Repayment of SBI SME Collateral Free Loan Scheme

  1. Working Capital (WC): One year, repayable on demand.  Working capital limits will be renewed every two year. However, performance of the unit and conduct of account will be reviewed annually for continuation of limits.
  2. Term Loan: Maximum Seven Years including moratorium period.