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The Small Industries and Development Bank of India (SIDBI) is a financial organisation which focuses on the development of the MSME sector. The objective of SIDBI is to strengthen the MSME sector by providing them with financial aid. SIDBI TULIP Scheme was launched for the urgent requirements of funds that would be used for any business-related purposes. Let us look in detail about the Top-Up Loan for Immediate Purposes (TULIP) in this article.

Features of the SIDBI TULIP Scheme 

The features of the SIDBI TULIP Scheme are given below:

  • Upto 100% finance based on 10% Fixed Deposit and extension of the charge
  • The borrowers are provided with hassle-free and quick loan sanctions within 7 days and also with attractive interest rates on the term loan and working capital loan.
  • No additional collateral security (except SIDBI FD).
  • Under the TULIP, there is a flexible security profile to obtain a loan from the SIDBI.

Eligibility Criteria

The eligibility criteria to obtain the SIDBI TULIP Scheme is mentioned below:

  • At least 1-year association with the SIDBI and maintaining a satisfactory track record.
  • Expansion in the same line of business at the same location.
  • Cash profit of the past financial year.

Eligible Expenditure

Any business-related expenditure like the purchase of machinery or equipment and need-based civil construction and renovation. The requirements for the acquisition of DG set and other MFAs that includes testing equipment, dies and moulds etc. The expenditure would include margin money for working capital (MMWC). The expenditure would require for the execution of sudden/specific/bulk orders that are self-liquidating nature and are against a min. The BBB rated counterparty or a state or central government department counterparty along with a good track record in making timely payments.

Quantum of Assistance

The minimum quantum of assistance will be 30% of existing exposure or 20% of net sales that are subjected to a maximum amount of Rs.2 Crore can be obtained to meet the working capital requirements.

Rate of Interest

SIDBI offers an interest rate of about 10.00 to 11.00% per annum on this product along with the flexible repayment options. The sanctioning branch will provide the details once the loan is approved.

Tenure and Moratorium 

The maximum tenure period for the loan is 5 years, including a moratorium of 6 months for the principal repayment, and the repayment can be done in equated monthly instalments.

Tenure and Moratorium Documents Required

The documents required for SIDBI TULIP Scheme are provided below:

  • Proof of KYC of new Directors if any (for the individual)
  • Proof of KYC of new guarantors/mortgagors, if any along with KYC forms (for the individual)
  • Address proof in case of any change in address of Registered office/factories
  • Last three years Annual Accounts of the applicant unit (if existing unit)
  • Last three years Annual Accounts of the associate concern/group companies/Corporates giving the guarantee, if any (if existing unit)
  • Last three years Income tax returns of promoters along-with IT assessment order
  • Memorandum of Association of the applicant Company/ Partnership Deed of the applicant firm/copy of registration certificate with the registrar of firms, if registered.
  • Memorandum and Articles of Association of the Corporates giving a guarantee.
  • Last three years Income tax returns of guarantors along-with IT assessment order.
  • List of existing and proposed shareholders and shareholding pattern (in case of a company) with Name of shareholders, % holding etc.
  • Power sanction letter/latest electricity bill – existing unit.
  • Multiple Banking arrangement – Annexure (Facilities availed from other Banks/FIs)
  • Profitability Projections etc./Duly filled Electronic Application form.
  • Architect estimates for major civil works, if any
  • Copy of approved building plan, if any.
  • Quotations for Plant and machinery, Miscellaneous Fixed Assets and other project heads etc.

Procedure for SIDBI TULIP Scheme

Online Application

The application procedure for SIDBI TULIP Scheme is explained as below:

Step 1: The applicant needs to refer to the official website of SIDBI.

Step 2: Click on the “Borrower’s Corner” link, that is present on the home page of the portal.

Step 3: Choose the option “Online loan application”.

Step 4: The user can access the webpage if the credentials are available already.

Step 5: For new user, the applicant has to create new user registration with the all mandatory details such as name, phone number, password, email id, proposed loan requisite information and after entering the details click on “Register” button.

Step 6: Once all relevant information is entered, the user can validate the page and apply for the respective loan scheme, which is applicable according to the user’s financial profile.

Step 7: After submitting the application, the acknowledgement number will be received to the registered mobile number for further reference.

Note: If the application is accepted after verification of details, the SIDBI will sanction the loan amount will be credited to the beneficiary’s accounts.