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Loan for Purchase of Equipment for Enterprises Development

Loan for Purchase of Equipment for Enterprises Development (SPEED)

Loan for Purchase of Equipment for Enterprises Development (SPEED) Scheme

The Small Industries Development Bank of India (SIDBI) is one of the financial institution, which promotes Small, Micro and Medium Enterprises (MSMEs) of the economy. Under this scheme, the bank provides faster dispensation of credit to MSME’s, particularly in the manufacturing segment and service sector. Financial assistance will be provided for the purchase of equipment for the development of enterprises. In this article, we look at the SPEED Scheme in detail.

Eligibility Criteria

Below are the requirements to apply for the Secured Business Loan (SBL) in SIDBI bank.

  • The existing MSME units having net profits with at least 3 years of operations with stable sales and cash profits in immediate past 2 years are eligible to apply for the Secured Business Loan scheme.
  • The borrower must not be a defaulter to any bank branch or FI
  • Other financial norms as specified from time to time.

Eligible Expenditure

  • For New To Bank (NTB)- The machinery purchased from the OEMs with whom SIDBI has an MoU.
  • For Existing Customer- Any original equipment manufacturer (OEM)
  • Proposed machinery must relate to the same line of business.
  • 2nd hand and refurbished machines which are not eligible under this scheme.

Quantum of Assistance

The SIDBI bank reserves the right to sanction the lower amount depending upon the assessment of the repayment capacity. The assistance amount given to the customers are as follows:

CustomerAssistance Provided
For New to Bank (NTB) customer of SIDBIUp to 100% of the machinery cost subject to a maximum of Rs. 1 crore will be provided
For existing customers of SIDBIUp to Rs. 2 crore

Rate of Interest

The applicable interest rate for the purchase of equipment is provided between 25% to 10% per annum.

Forms of assistance

  • Term Loan
  • Revolving Term Loan

Validity Tenure and Moratorium

A maximum repayment tenor is 2 to 5 years that includes the moratorium of 3 to 6 months.

Documents Required

The documents that have to be possessed by the applicant are given below:

  • Proforma Invoice of the Machinery (quotation)
  • KYC documents (as per Bank’s guidelines)
  • Identity Proof: PAN, Aadhaar Card, Driving License, Voter Identity Card, etc.
  • Address Proof: PAN Card, Valid Passport, Utility bill, etc
  • Past three years audited financial statements
  • Statement of immovable properties of promoter/directors
  • Copy of Memorandum of Association (MoA)/ Partnership deed/ Trust Deed, etc
  • Copy of consent to establish from PCB
  • Document showing Existing Power load
  • Application filed for additional power load required (if applicable)
  • Copy of rent/lease agreement (self-certified)
  • Loans took from other banks/FIs/NBFCs which are currently outstanding

Note: Not required in case the borrower has an in-principle approval letter from PSB loans. If co-borrower is applicable, financials of co-borrower are also required.

Other Documents

  • Copy of Udyog Aadhar Memorandum (UAM)
  • Copy of GST Registration Certificate (for GST registered units)
  • Copy of sanction letters of other lenders for existing banking arrangement.

Note:

  • All documents to be self-certified.
  • SIDBI reserves the right to call for any additional information/documents in respect of the loan requested. Calling for documents is not a guarantee for sanction of loan.

Offline Application Procedure

To apply for the Loan for Purchase of Equipment for Enterprises Development (SPEED), the applicant has to follow the below procedure:

Step 1: The applicant will have to approach the nearest bank branch to apply for the scheme.

Step 2: The applicant must fill out the SPEED Scheme application form with all the requested details and have to attach the specified documents as required. The application form can be downloaded from the official site of SIDBI.

Step 3: After completing the application form, submit it to the concerned bank official.

Step 4: Upon submission, the verification process will be done by the bank official.

Step 5: Then the applicant will be provided with an acknowledgement slip for further reference.

Post by Sinduja Shankar

IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.

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