SIDBI : Scheme for facilitating payments to MSMEs in Construction Sector (CRE)

SIDBI : Scheme for facilitating payments to MSMEs in Construction Sector (CRE)

Objective:

  • Construction sector project. is one of the biggest business providers to MSME suppliers and service providers. Timely payment from construction entities is one of the major problems faced by these MSME vendors. The scheme will facilitate timely payments to such MSME vendors.

  • The scheme is intended to cover Commercial Real Estate [CRE] exposures in construction sector [excluding solely residential projects].

Eligibility:

For project based assistance

  • Borrower having previous experience in successfully implementing construction sector projects.

  • Preferably, the borrower may be availing credit facilities from other banks with satisfactory track record.

  • New entities from non construction background could be considered with higher collateral requirements.

Line of Credit (LoC)

  • Multi project entity promoted by well established promoters/ groups in construction sector in existence for at least 5 years and have successfully completed at least 5 projects

  • Borrowing entity having Profitable track record for 3 years and turnover in the last completed FY at least `100 crore.

  • The entity should be availing credit track record.

Assistance is subject to MSME linkages:

  • Other financial norms as specified from time to time

Forms of assistance :

  • Term Loan

  • Line of Credit

Quantum of assistance :

  • Based on MSME engagement in the project(s)

  • Not exceeding `35crore per project.

  • Assistance shall not exceed `15 crore for sole proprietary concerns

Eligible heads for financing :

  • 100% of SIDBI assistance shall be used towards payment to MSME suppliers/vendors to the identified project.

Rate of Interest (coupon rate) :

  • As per internal rating of the Borrower and linked to PLR

Repayment Period:

Term loan

  • Generally up to 3-5 years including moratorium in case, where the revenue will be by way of sale of properties only.

  • In all other cases (i.e., rentals or sale or both etc) the repayment including moratorium may be allowed up to 8-10 years.

  • Repayment period including moratorium should be commensurate and aligned to the projected revenues.

  • Provision kept for advance repayment based on actual cash inflows (without pre-payment premium).

Line of Credit:

  • Repayment period of 1-3 years including moratorium period of 3 months.

Security :

For project specific assistance

  • All movable and immovable assets of the project.

  • Other Collateral securities, if any stipulated

  • Escrow of project receivables for project based assistance

For LoC

  • Collateral security by way of Immovable property of at east 150% of assistance.

Upfront Fee:

  • Upto 2%

<<Go Back To Main Page


 
SIDBI