SIDBI Loan for Marketing MSME Products

SIDBI provides loan for marketing MSME products or to

MSME units to undertake various activities necessary to increase their sales in the domestic and export market. Under the scheme, financing is also provided to corporate entities to enable them to provide support services and/or infrastructural facilities to MSME units to improve marketing capabilities. SIDBI or Small Industries Development Bank of India is the principal financial institution for the promotion, financing and development of industry in the small scale sector.

Purpose of Loan

The SIDBI loan for marketing MSME products is granted to eligible borrowers for undertaking various marketing activities such as:

Marketing research
Research and development of product upgradation and standardisation
Preparation of strategic marketing plans
Advertising, branding, catalogue preparation, production of audio-visual aids, etc.,
Participation in trade fairs and exhibition
Undertaking sales promotion tours
Establishing distribution networks
Establishing showrooms or retail outlets or warehousing facilities
Training of personnel in marketing activities

Under the scheme, financing for the following type of infrastructure setup is also permitted:

Setting up of new commercial complexes, showrooms or renovation of existing commercial complex or showrooms for marketing small scale, cottage and village industry products.
Development of infrastructure for setting up of permanent exhibition centres, industrial parks like garment and software parks, marketing emporia, design and fashion forecasting studios, auction houses, container depots and container freight stations and trade centres.

Any such development of infrastructure must largely benefit the small scale cottage and village industries.

Eligibility

Existing MSME businesses in the small scale sector with a good track record and sound financial position are eligible for assistance. New MSME units can also be considered on a selective basis. Further, specialised organisations

incorporated as companies and providing marketing assistance infrastructure and support service to industrial concerns in the small scale sector are also eligible.

Amount of Loan

Loan of upto Rs.5 crores can be provided for projects that help with the marketing of SSI products. A maximum repayment of eight years including a moratorium period of upto one year for starting the repayment of principal amounts is provided. The promoters must invest a minimum of one third of the project cost and the maximum debt to equity ratio permitted is 2:1. Collateral of 100% security in case of own premises and 150% for leased premises must be provided. In addition, personal guarantee of all promoter directors, shareholders having more than 5% share in equity and co-applicants is necessary.

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Frequently Asked Questions

Common questions about SIDBI Loan for Marketing MSME Products in India.

The SIDBI loan for marketing MSME products is granted to eligible borrowers to undertake various marketing activities such as marketing research, product upgradation, strategic marketing planning, advertising, participation in trade fairs, sales promotion tours, establishing distribution networks, showrooms or retail outlets, and training personnel in marketing activities.

Existing MSME businesses in the small scale sector with a good track record and sound financial position are eligible for assistance under this loan scheme. New MSME units can also be considered on a selective basis. Additionally, specialized organizations incorporated as companies and providing marketing assistance, infrastructure, and support services to industrial concerns in the small scale sector are also eligible.

Loan of up to Rs. 5 crores can be provided for projects that help with the marketing of MSME products under this scheme.

The maximum repayment period for the SIDBI loan for marketing MSME products is eight years, including a moratorium period of up to one year for starting the repayment of principal amounts.

The promoters must invest a minimum of one-third of the project cost as their contribution toward the project.

The maximum debt-to-equity ratio permitted under the SIDBI loan for marketing MSME products scheme is 2:1.

Collateral security of 100% of the loan amount is required in case of own premises, and 150% of the loan amount is required for leased premises.

Yes, personal guarantees of all promoter directors, shareholders having more than 5% share in equity, and co-applicants are necessary for the SIDBI loan for marketing MSME products.

Under this scheme, financing is also provided for setting up new commercial complexes, showrooms, or renovation of existing commercial complexes or showrooms for marketing MSME products. Additionally, financing is available for developing infrastructure for permanent exhibition centers, industrial parks, marketing emporia, design and fashion forecasting studios, auction houses, container depots, container freight stations, and trade centers, primarily benefiting small scale, cottage, and village industries.

Yes, the SIDBI loan for marketing MSME products can be used for research and development activities related to product upgradation and standardization, which are essential for enhancing the marketing capabilities of MSME units.