SBI SME Open Term Loan

SBI SME Open Term Loan

SBI SME Open Term Loan

State Bank of India (SBI) offers an easy and stress-free way for MSME businesses to get finance for expansion or transformation of existing business or obtaining new technical know-how inclusive. In this article, we look at the SBI SME Open Term Loan in detail.

State Bank of India (SBI)

State Bank of India (SBI) is an Indian multinational public sector banking and financial services organization that is owned by the government and offers products and services in the following domains:

  • Banking
  • Corporate banking
  • Finance and insurance
  • Investment banking
  • Mortgage loans
  • Private banking
  • Private equity
  • Savings
  • Securities
  • Asset management
  • Wealth management
  • Credit cards and many others.

SME Open Term Loan

The SBI SME Open Term Loan can be utilized for any valid commercial purposes in line with the usual business activity of the customer. These would comprise term loans for:

  • Expansion and modernization
  • Substitution of high cost debts or high cost term debts of other banks or Financial Institutions
  • Design and introduction of new layouts in the factory to enhance productivity
  • Up gradation of technology and energy conservation schemes or machinery
  • Acquisition of software, hardware, consumable tools, jigs, fixtures etc
  • Acquisitions of ISO and other similar certifications
  • Obtaining technology
  • Finalizing business deals
  • Involving in exhibitions or fairs for market promotion and so on.

Preferably SME units must apply for Open Term Loans together with their renewal requests for working capital facilities, so that the assessment can be completed simultaneously and line of credit made accessible for a complete year.

As SBI is government-owned it naturally offers the very low interest rates on loans of any category because of a low base rate. State Bank of India has gone in agreement with RBI’s progress of reducing the repo rate and thus gets a very low base rate. A lower base rate means lower interest rates for schemes intended for small scale industries as well as entrepreneurs.

SBI SME Open term Loan Highlights

  • Stress-free pre-approved line of credit;
  • Max Loan Amount up to Rs. 250 lakhs for Manufacturing and Rs. 100 lakhs for Trade and Services;
  • Legal binding of sanction for 12 months;
  • Liberty to avail the capability at your own ease, within the legality of sanction;
  • Multiple disbursements permissible;
  • No fine on the unutilized amount even if totally unutilized.

Related Loan Schemes for MSME Businesses

Cluster Specific Package for the Auto Ancillary Cluster

This loan scheme is intended for providing financial aid for purchase, maintenance or upgrades of automobiles owned by companies falling under the small-scale business category. The appropriate interest rate ranges from Base Rate + 1.25% for each year to Base Rate + 3.00% for each year.

Cluster Specific Package for Ceramic Cluster

This loan scheme is intended for supplying financial aid towards purchase, maintenance or upgrades of portions of assets that come under the ceramic classification owned by companies falling under the small-scale business grouping. The relevant interest rate ranges from Base Rate + 1.25% per year to Base Rate + 3.00% per year.

Construction Equipment Loan

According to the name of this loan, this financing option permits funding help for construction of facilities by the purchase or rent of equipment that aids in the building process. The appropriate rate of interest for this loan ranges from Base Rate + 1.00% per year to Base Rate + 2.00% per year.

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