SIDBI: General Purpose Term Loan

SIDBI: General Purpose Term Loan

Objective:

  • Setting up of a new MSME unit.

  • Expansion / Diversification/ modernisation/ technology upgradation/ quality certification of existing units in MSME sector.

  • Acquisition of additional machinery / equipment.

  • For undertaking various marketing related activities

  • Any other activity (having linkages and benefits accruing to MSME sector from the proposed assistance).

Nature of assistance:

Term loan and other forms of assistance such as Working Capital Term Loan, etc.

Amount of assistance (limit) :

Need based (minimum `10 Lakh).

Desirable Financial Parameters
Debt Equity Ratio(DER) Not exceeding 2:1
Minimum Promoter’s Contribution New Projects- 33%
  Existing well performing units- lower contribution [up to 25%] could be accepted
Period of Loan Maximum 8-10 years for term loan (including moratorium upto 18 months)
Upfront Fee (non refundable) 1% of the term loan sanctioned
Security Margin Minimum overall asset coverage of 1.3 for existing units and 1.4 for new projects.

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