SIDBI Retail Loan Scheme (RLS)

The Small Industries and Development Bank of India (SIDBI) is a developed financial organisation which mainly focus on the development of the Micro, Small and Medium Enterprises (MSME) sector. The objective of SIDBI is to encourage the MSME sector by providing them with financial assistance. Under SIDBI, Retail Loan Scheme was launched to support the financial need of Retailers/Wholesalers involved in the selling of goods and service. Let us look in detail about the SIDBI Retail Loan Scheme (RLS) in this article. To know about the SIDBI General Purpose Term Loan

Features of the SIDBI Retail Loan Scheme

The features of the SIDBI Retail Loan Scheme are given below:

An individual is eligible to avail up to 100% finance for Capex or working capital
The borrowers are provided with hassle-free and quick loan sanctions with attractive interest rates on the term loan and working capital loan.
Under RLS, there is a flexible security profile to obtain a loan from the SIDBI.
It offers attractive interest rates and lower promoter’s contribution to capital expenditure.

Eligibility Criteria

The trader should satisfy the below criteria to apply for the SIDBI Retail Loan Scheme.

Existing well-performing MSE Retail and Wholesale Traders
Minimum of 3 years in operations with stable sales and cash profits in the past 3 years.
Satisfactory track record with the Banks/NBFC/FIs for past 12 months
The MSE Retail Traders and Dealers (dealing with products of at least one large reputed supplier whose turnover is around Rs.1000 crore or more) and Wholesale Traders are covered (Export trade and large commercial)

Eligible Expenditure

For Capex: The acquisition of business premises, godown, shop, office premises, repair, furnishing, renovation of existing business premises and/or purchase of furniture & fixtures, equipment’s, tools, computers, UPS, DG set, etc.
For working capital and additional working capital (in case the borrower is already having working capital or overdraft facility with some other Bank/FI) is eligible to avail credit under RLS.

Quantum of Assistance

The minimum quantum of loan assistance will be ranging between Rs.10 lakhs to 100 lakhs can be obtained to meet the working capital requirements.
Retails traders and dealers will be provided with the assistance amount of Rs.50 lakhs
Wholesale traders (stockists, super stockists, etc.) will be granted up to Rs.100 lakhs
The finance towards working capital would be a maximum of 20% of the sales turnover of last the Financial Year (F.Y.)
The security would be included up to 25% of FD based on the risk profile.

Rate of Interest

SIDBI offers an attractive interest rate of about 10 to 11.50% per annum on this product along with the flexible repayment options. The sanctioning branch will provide the details once the loan is approved.

Repayment of Loan

The tenure depends on the loan amount and the maximum repayment tenure is up to 36 to 60 months, including moratorium period of up to 3 months.

Nature of Assistance

The nature of assistance is in the form of open term loan and working capital term loan, etc.

Documents Required

The documents required for SIDBI Trader Finance Scheme are provided below:

Proforma Invoice of the equipment/MFA/Copy of Purchase Order or latest CMA data for additional WC etc.
Copy of Registrations under Goods & Services Tax (GST), for GST, registered units
Copy of Permissions/license from local authorities including the Shops & Establishments Act, local Municipal Act, as applicable.
KYC documents (as per Bank’s KYC form)
Past 3 years audited financial statements of borrower/associate concern if any.
In case the application is lodged between April to October, the CA certified provisional Balance Sheet for the previous FY with the GST return.
Present or Proposed shareholding pattern of the borrower.
Profitability Projections and projected balance sheet
Statement of immovable properties of promoter/directors
Copy of MoA/AoA/Partnership deed/Trust Deed etc
Copy of rent/lease agreement (self-certified)
Loans/Limits availed from other banks/FIs which are currently outstanding at Banks.
Copy of Udyog Aadhaar Memorandum (UAM)
Copy of sanction letters of lenders for the existing banking arrangement
Copies of other valid permissions/license issued from local authorities

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

Online Application

The application procedure for SIDBI Retail Loan Scheme (RLS) is explained as below: Step 1: The MSME enterprise needs to refer to the official website of SIDBI Step 2: Click on the “Borrower’s Corner” option, that is present on the home page of the portal. Step 3: Click on the option “Online loan application”. Step 4: For new user, create new user registration with the mandatory details such as enterprise name, phone number, password, email id, proposed loan requisite details and after entering the details click on “Register” button. Step 6: Once all the details are entered, you can validate the page and apply for the respective loan scheme, which is applicable according to your financial profile. Step 7: After submitting your application, the acknowledgement number will be received to your registered mobile number for further reference. Note: If the application is approved after verification of details, the SIDBI will approve the loan amount will be credited to the beneficiary’s accounts.