Land, Machinery Loan by SBI

What is SBI Asset Backed Loan & MSME Loans?


We can provide you with useful information on how such loans typically work.

SBI Asset-Backed Loan:

Definition:

  • An asset-backed loan from SBI would likely involve using specific assets as collateral to secure a loan.

Collateral Types:

  • Assets that could be used as collateral may include real estate, equipment, inventory, accounts receivable, or other valuable items owned by the borrower.

Loan Purpose:

  • These loans are often used for business purposes, allowing businesses to leverage their assets to secure funding for expansion, working capital, or other financial needs.

Interest Rates and Terms:

  • The interest rates and terms for asset-backed loans can vary based on factors such as the type and value of the collateral, the borrower's creditworthiness, and the purpose of the loan.

Risk and Loan Approval:

  • Asset-backed loans are considered secured loans, which means that there is collateral to back the loan. This can make them less risky for the lender, potentially leading to more favorable terms for the borrower.

SBI MSME Loans:

Definition:

  • MSME loans from SBI are designed to meet the financial requirements of Micro, Small, and Medium Enterprises.

Eligibility Criteria:

  • Eligibility criteria for MSME loans may vary, but typically these loans are available for businesses that fall within the defined MSME category based on turnover and investment in plant and machinery.

Loan Types:

  • SBI may offer various types of MSME loans, including working capital loans, term loans, and other financial products tailored to the needs of small and medium-sized enterprises.

Quantum of loan (Min/Max):

  • Minimum loan amount: > Rs 10 lakhs
  • Maximum loan amount: Rs. 20 crores.
  • However, in cities viz, Mumbai and Delhi loans upto Rs.30 Crores can be considered.

LTV (Loan-to-value%) :

  • Immovable property: 60% of the realizable value.

Pricing :

  • Competitive pricing linked to EBLR / 6 Months MCLR

Repayment Period: Drop-line Overdraft-

  • 12 months to 240 months with either equated reduction in limit or customized reduction in limit, depending upon the cash accruals.
  • Max Moratorium period-18 months based on activity. Interest to be serviced monthly during the moratorium period.

Processing fee/Upfront Fee:

  • For Dropline OD: Upfront/ processing fee of 1% of the limit subject to a maximum of Rs.10 lakhs. For Cash Credit: 0.40% of the loan amount Once in a year.

Government Schemes:

  • SBI often participates in government-backed schemes aimed at supporting MSMEs. These schemes may offer special benefits such as lower interest rates or extended repayment terms.

Online Application:

  • SBI usually provides an online platform for MSME loan applications, making it convenient for business owners to apply for and manage their loans.

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