SBI Traders Easy Loan Scheme

SBI Traders Easy Loan Scheme

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SBI Traders Easy Loan Scheme

State of India (SBI) has launched the traders Easy Loan Scheme to provide a business loan to the Traders, professionals and entrepreneurs for their business purposes on easy terms against a property. This scheme enables hassle-free credit to the traders as they can avail loan up to Rs. 5 Crore to meet their meet business requirements and is sanctioned against some equitable collateral like a mortgage of property. In this article, we look at the SBI Traders Easy Loan Scheme in detail.

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Eligibility Criteria

In general, the below-specified applicants can apply for the Traders Easy Loan Scheme in SBI Bank

  • Existing customers of the SBI can apply for this scheme those who maintain a satisfactory track record.
  • New connections including take-over can be considered subject to take- over norms.
  • First generation entrepreneurs are eligible under this scheme
  • Promoters of existing units are eligible in the case if they want to start a new unit

Applicants those who are engaged in the below following areas are also covered:

  • Wholesale and retail traders in agricultural or industrial commodities
  • Professionals and self – employed
  • Small business enterprises
  • Commission agents engaged in the 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 lakhs to Rs. 500 lakhs)
  • Cold storage units up to Rs. 1 crore

Mortgage

  • The mortgaged property must be in the name of applicant close relatives. It can also be in the name of a business or business partner.
    Agricultural property and properties outside urban limits are not accepted.
  • In the case, if the Agricultural properties are not within the urban limits then it is accepted.

Amount of Loan

An individual can avail a minimum loan amount of about Rs. 25,000 and the maximum amount of about Rs. 5 crore. The loan amount will be sanctioned for the existing customers upon maintaining the satisfactory credit record with respect to the existing loans. The loan amount is also sanctioned in the case if the outstanding loan amount and proposed loan amount together does not exceed the 65% of the realizable value of the property mortgaged.

Before the process of approving the loan, the bank ensures that the quantum of loan to be not more than the least of the below following:

  • 20% of the annual turnover projected
  • 75% of the capital expenses to be incurred for business
  • 65% of the realizable value of the property mortgaged.

Margin Money

The property to be mortgaged with the 35% of the realizable market value 25% of the charges to be incurred for the business if TEL is availed for capital expenditure whichever is higher.

Interest Rates

  • Cash Credit (CC) or Demand Loan (DL) – 0.25% below the State Bank Advance Rate (SBAR)  to a minimum of 10.50%
  • Term Loan – 0.25% above SBAR to the minimum 11.00%
  • ZCC has been delegated with powers to reduce the interest rates by 0.50% based on the value of collateral, the value of connection and the level of competition. The interest will be calculated and the same is applied monthly on daily reducing balance.

Note: The rate of interest may change from bank to bank due to course depending on the bank’s principles and decision. The applicants can refer to the official SBI website to know the current interest rate.

Documents Required

The below listed are the documents need to be furnished at the time of applying for this Scheme.

  • Copy of collateral security being offered.
  • The latest copy of income-tax return / Assessment order
  • Statement of account from the existing banker for the last 6 months.
  • Copies of relevant license, documents pertaining to ownership/tenancy/ lease agreement etc., in respect of premises where the activity will be carried out.
  • Latest tax paid a copy of the property to be mortgaged.
  • Encumbrance certificate (Upto date)
  • Photos of applicant, guarantors.
  • Copies of Trust Deeds/Memorandum and Articles of Association, if applicable.

Processing Fees

  • Working Capital limits that include the Fund Based (FB) and Non-Fund Based (NFB). The processing fee for the loans up to Rs. 2 lakhs is Rs. 250/- and for the loans above Rs. 2 lakhs, Rs. 250/- is charged per lakh. This limits up to a maximum of Rs. 10 lakhs.
  • For the Term Loans that are above Rs. 2 lakhs, an upfront value of 1% of the loan amount to be recovered.

Repayment

One can repay the loan within 5 years in monthly, quarterly, half-yearly and yearly basis depending on the borrower.

  • Cash Credit –  On demand
  • Demand Loan – 36 months
  • Term Loan – Up to a maximum of 60 months based on cash flows in monthly, quarterly or half yearly instalment

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