SBI Simplified Small Business Loan

SBI is one of the popular banks in offering various business loans for the Small and Medium Enterprises sector (SMEs) in India. The bank serves with the different types of products proposed to meet the needs of SME customers over the sectors like manufacturing, services, trading etc. Under SME loans, the SBI provides the simplified small business loan to build fixed assets and current assets of the business. In this article, we look at SBI Simplified Small Business Loan in detail.

Purpose of the Loan

SBI Simplified Small Business Loan is a drop-line overdraft facility offered to the business units engaged in manufacturing or service activities. This business loan can be taken to build fixed assets and current assets of the business.

Eligibility Criteria

The following are the eligibility criteria for availing business loans from the SBI.

All business units engaged in manufacturing, services activities along with self-employed and professional individuals, wholesale/retail trade are eligible to apply for the loan.
The borrower existing business should be placed in the same locality or area at least for five years.
The borrower should be the owner of the premises.
In the case of rented premises, the borrower should possess valid tenant agreement from the owner of the shop.
The borrower should be the current account holder at any bank for at least two years.
The borrower should hold the monthly balance of more than Rs.1 Lakh in the last twelve months.
Also, the borrower should fulfil the eligibility criteria as per Go/No GO Criteria. If any of the particulars get the response as “No”, then the unit will not be considered eligible under this scheme.

Quantum of Loan

The quantum of loan granted to the borrower will be the ten times the average monthly balance for the last twelve months concerning the minimum, and the maximum amount of loan provided is mentioned here. Minimum Loan: The minimum loan amount of above Rs.10 Lakhs can be obtained. Maximum Loan: The maximum loan amount of up to Rs. 25 Lakhs can be obtained.

Margin

The margin for the Simplified Small Business loan is 10% which will be ensured through stocks and receivable statements.

Security and Repayment Period

The minimum collateral security required under the simplified small business loan is 40% and the repayment period fixed for the borrower is up to five years.

Unified Charges

The unified charge for your processing your loan application will be of Rs.7500/- which includes the processing fee, EM charges, documentation charges, inspection, commitment charges and remittance charges.

Assessment

As per the need assessment for the requirement of credit, limits have to be done. The financial statement is not required but the average monthly balance in the current account in the last twelve months should be the minimum of above Rs.10 Lakhs and maximum of below Rs.25 Lakhs.

Documents Required

The following are the documents which are necessary for processing your loan.

Application Form.
PAN Card of the applicant or the firm.
Passport size photograph of the applicant.
Identity Proof: Voter ID, Passport, Driving License, Aadhaar Card, etc.
Residence Proof: Driving License, Voter’s ID, Passport, Telephone Bill, Electricity Bill (not more than three months), Sale Agreement / Bank Statement (not more than three months) Registered Lease Deed, etc.
Ownership proof of either residence or office either in the name of the applicant or jointly with family members
Proof of Business Continuity: Bank Statement, ITR, Certificate of Incorporation, Shops & Establishment Certificate, Partnership Deed or Sales Tax Challans.
Financial Documents of the Business: Profit and Loss Statement and Balance Sheet (duly audited by a registered Chartered Accountant), book-debt and creditors-statement for latest three months, Periodic Stock, etc.

Application Procedure for Simplified Small Business Loan

The eligible applicant who wants to apply for the business loan has to approach the nearest SBI branch of your area and collect the application form from the bank. Complete the application form with the necessary details and attach the required documents. After filling the form, submit the same to the appropriate bank.

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Frequently Asked Questions

Common questions about SBI Simplified Small Business Loan Details.

The SBI Simplified Small Business Loan is a drop-line overdraft facility offered to business units engaged in manufacturing or service activities. It can be used to build fixed assets and current assets of the business.

Business units engaged in manufacturing, services activities, self-employed and professional individuals, and wholesale/retail trade are eligible to apply for the loan. Additionally, the borrower must meet certain criteria related to the age of the business, ownership of premises, and banking history.

The minimum loan amount that can be obtained is above Rs. 10 Lakhs, while the maximum loan amount is up to Rs. 25 Lakhs. The quantum of the loan is based on ten times the average monthly balance of the borrower for the last twelve months.

The margin for the Simplified Small Business loan is 10%, which will be ensured through stocks and receivable statements.

The minimum collateral security required under the simplified small business loan is 40%, and the repayment period fixed for the borrower is up to five years.

The unified charge for processing the loan application is Rs. 7,500/-, which includes the processing fee, EM charges, documentation charges, inspection, commitment charges, and remittance charges.

The required documents include an application form, PAN card, identity proof, residence proof, ownership proof, proof of business continuity, and financial documents of the business, such as profit and loss statements, balance sheets, and stock statements.

The assessment for the loan is based on the need assessment for credit requirement. The financial statement is not required, but the average monthly balance in the current account for the last twelve months should be a minimum of above Rs. 10 Lakhs and a maximum of below Rs. 25 Lakhs.

The eligible applicant needs to approach the nearest SBI branch, collect the application form, complete it with the necessary details and required documents, and submit the form to the appropriate bank.

To be eligible for the SBI Simplified Small Business Loan, the borrower's existing business should be placed in the same locality or area for at least five years.