SBI launched this scheme to provide hassle free loan to Traders. Any business man/ entrepreneur/ Professional and self employed person can avail this loan. Loan under the scheme can be availed to meet normal business requirements and is sanctioned against equitable mortgage of property. Any residential or commercial property in the name of unit/ proprietor/partner OR their close relatives is acceptable. Agriculture property or property outside urban limits is not accepted.
This is a product which is very user friendly in as much as the process of assessment of the limit and delivery has been simplified and the need for periodical stock statements has been reduced to the minimum.
This is suitable for a large number of traders in the medium range who are now unable to access bank finance due to financial compliances which are not always prevalent in the particular trading activity. The rate of interest is very competitive. The loan can be restored after 6 months in case the conduct of the loan has been regular.
The advance can be availed by way of Loan or Cash Credit limit. It can also be availed for Non Fund Based (NFB) requirements (for issuance of Bank guarantees or LCs). Cash Credit limit or non fund based limit is renewable every 12 mths. Loan can be repaid in monthly or quarterly, even half yearly instalments - as may be suitable to the borrower – in a period upto 5 years.
Minimum and maximum amount of loan is Rs 25,000/- and Rs 5.00 Crore. Margin is 35%. i.e. loan can be upto 65% of the realizable value of the property or the business requirement- whichever is less. Business requirement is assessed on the basis of projected business turnover. Interest at floating rate is charged at monthly intervals on daily reducing balance.
No Third party guarantee is required to avail SBI's Traders Easy loan.
- Wholesale and retail traders in agricultural or industrial commodities
- Professionals and self – employed
- Small business enterprises
- Commission agents engaged in purchase and sale of food grains and other commodities
- Cotton ginning mills that purchase cotton and sell it after ginning.
- Oil Mills
- Rice Mills (Rs.5 lacs to Rs.500lacs)
- Cold storage units upto Rs.1 crore
Eligibility for Trader's Easy Loan
- Existing customers of the SBI with a satisfactory track record.
- New connections including take - over can be considered subject to take- over norms.
The loan can be considered for acquiring fixed assets fro the business and/or build up of inventory /current assets.
Type of Facilities on Trader's Easy Loan
- Cash Credit / Demand Loan/ Term Loan
- Working capital finance can be availed either as CC or DL or partly CC and partly DL
Quantum of Finance
- Rs.0.25 lac to Rs.500 lacs.
- For traders and wholesalers, for professionals and self employed
- The credit needs will be assessed for the purpose stated and the loan component shall not exceed 20% of the projected annual turnover or 75% of the capital costs to be incurred for business or 65% of realizable value of property whichever is less.
- In the case of rice mills, the quantum of finance can be assessed based on pucca records of the unit and can be fixed anything between 20% to 40% of the projected annual turnover.
- For existing borrowers who have been sanctioned other limits the Loan can be sanctioned subject to:
- The existing loan accounts have conducted satisfactorily for the last three years
- The eligible amount ie., the outstandings in the existing accounts and the proposed loan should be within 65% of realizable value of the property mortgaged to the Bank without resorting to revaluation of the property.
Margin for SBI's Trader's Easy Loan
35% of the realizable value of the property to be mortgaged or 25% of the costs to be incurred for the business if TEL is availed for capital expenditure.
Rate of Interest*
- CRA assessment is dispensed with for this product.
- CC / DL – 0.25% below SBAR – Minimum of10.50%
- Term Loan - 0.25% above SBAR - Minimum 11.00%
- ZCC has been delegated with powers to reduce the interest rates by 0.50% based on value of collateral, value of connection and the level of competition.
* Rate of interest may changed due course depending of the bank's policy and decision. Please check SBI website for current interest rate.
Security for Traders Easy Loan
Primary Security: Hypothecation of stocks and receivables
Collateral Security: EM of land and building or tangible security by way of TDRs, NSCs, etc. Open land whether inside or outside the municipal limits should not be accepted as collateral. In exceptional cases, on business considerations, approval may be sought from SMEBU, Corporate Centre for accepting open land as security.
Working Capital limits (FB + NFB)
For loans upto Rs.2lacs – Rs.250/-
For loans above Rs.2lacs – Rs.250/- per lac or part thereof, - Maximum Rs.10lacs
For Term Loans above Rs.2lacs
Upfront fee of 1% of the loan amount to be recovered
*Processing fees may be varied depending on the bank's policy and periodical offers.
- Cash Credit - On demand
- Demand Loan - 36 months
- Term Loan - Upto a maximum of 60 months based on cash flows in monthly / quarterly / half yearly installments
As applicable to working capital advances/ term loan for trade and services sector
- CC limit is valid for one year and has to be renewed every year (The validity period of sanction has since been increased to 2 years – subject to annual review)
- Stock statements need to be furnished at the time of sanction and at quarterly intervals, as at the end of February, May, August and November thereafter.
- Stock statements waived for TL and DL
- Inspection should be at quarterly intervals
- In case the loan is by way of CC, the credit summations should be at least 200% of the CC limit.
- TL/DL should be with monthly repayment schedule and has to be reviewed annually.
Frequently asked Questions
|What is this Scheme?||The Scheme is to provide loan to the Traders/ professionals/ entrepreneurs etc for their business needs on easy terms against property.|
|Who can take this loan?||Any business man/ entrepreneur/ Professional and self employed person can take loan under the scheme.|
|What is the amount of loan?||The amount of loan is Minimum Rs 25,000/-and Maximum Rs 5.00 Crore.|
|What type of property is accepted?||Any residential or commercial property in the name of unit/ proprietor/partner OR their close relatives is accepted. Agriculture property or property outside urban limits is not accepted.|
|What is the margin? How much loan is given?||The Margin is 35%. i.e. loan can be upto 65% of the realizable value of the property. However, if business requirements are less, the lower of the two amounts will be sanctioned.|
|How is business requirement calculated?||It is based on projected business turnover.|
|What is the interest rate? Is it floating or fixed rate?||The interest rate in linked to SBAR. It would increase/ decrease with changes in SBAR (floating rate). For cash credit it is 0.25% below SBAR and for loans 0.25% above SBAR. Presently it is 13% for term loan and 12.50% for the Cash Credit limit based on present SBAR of 12.75%|
|What is the method of calculating interest?||Interest is calculated and applied monthly on daily reducing balance|
|Can I get Cash Credit limit also? Can I get Guarantee/ LC limits also?||Yes.|
|Is there any processing charges?||Yes.1% of the loan amount.|
|What is the repayment period?||In case of Cash Credit it is reviewed by the Bank every 12 months. Loan is to be repaid in maximum 5 yrs.|
|Whether repayment is monthly or quarterly?||It can be monthly, quarterly, even half yearly depending upon the requirement of the borrower.|
|Is there any guarantor required for the loan?||NO. If property is owned by somebody else, then only owners' guarantee is required.|
|Whether I will have to take insurance of the property?||Yes.|
|I have a loan account with other bank. Can I shift this to SBI under this scheme?||Yes.|
|What documents I would have to submit?||Usual documents for identification and copy of the latest balance sheet, last income tax return etc and Advocates search report, title certificate and valuation certificate of the property that are normally required for creation of mortgage.|