SBI Simplified Small Business Loan

The State Bank of India (SBI) offers various Business loans. Among them, a popular option is the Simplified Small Business Loan that falls under the SME loans category. The basic purpose of this loan is for a build-up of current assets and fixed assets that are needed for businesses to grow and expand.

SBI Simplified Small Business Loan Features

The SBI Simplified Small Business Loan offers some good features for SME category.

They are mentioned below:

Eligibility Criteria for SBI Simplified Small Business Loan

The business loan comes with a few criteria that the applicant has to take into consideration before applying for the loan. The bank will conduct any required assessment based on the applicant’s profile.

1. Location of Business

The applicant who is applying for the loan should exist in the same location for a minimum of 5 years.

2. Ownership

The applicant should be the owner of the business location or at least should have a valid tenant agreement with the owner.

3. Premises

If the premises is rented, then the applicant should be able to display the residual of at least 3 years.

4. Applicant

The applicant should be a current account holder for at least 3 years at any bank.

5. Account Balance

The applicant should have had more than Rs. 1 lakh per month balance for the past 12 months.

6. Go/No Go Criteria

The applicant will be required to fulfil the eligibility criteria as per the God/No God criteria. If the parameters get the response as ‘No’, then the applicant will not eligible under the scheme.

Features of SBI Simplified Small Business Loan

Quantum of Loan

The quantum of loan is zero times of average monthly balance in the current account in the previous 12 months’ subject to:

• Above Rs. 10 lakhs
• Less than Rs. 25 lakhs

Nature of facility

The simplified small business loan comes with a drop-line overdraft Facility.

Target Audience

The loan targets those engaged in Manufacturing services. It also targets self-employed individuals, professionals and those in wholesale/retail trade.

Margin of loan

There is a 10% margin, which will be ensured through stocks and receivable statements.

Collaterals

There is a requirement for minimum collateral of 40%. The applicant must abide by this to avail the loan.

Repayment period

The loan offers a 60-month repayment period along with the loan. The applicant must prove with documents that he will be able to pay the loan. The account balance comes in force here.

Charges

The applicant has to pay a unified charge of Rs. 7500, which includes processing fee, documentation charges, inspection, commitment charges and remittance charges.

MCLR

Marginal Cost of Funds based Lending Rate (MCLR) is the main feature. The pricing in the loan is competitive pricing and is linked to MCLR.

Assessment under SBI Simplified Small Business Loan

Financial statement

The applicant does not have to provide a financial statement to avail the loan.

Advance granted under Mudra Scheme

The guarantee cover is available for 5 years and hence for advance granted under Mudra Scheme, the maximum period is 60 months.

Conclusion

The State Bank of India’s (SBI) Simplified Small Business Loan is a good option for anyone who is considering to grow their business. It is a real help to the small industries. The applicants should read all the loan related documents carefully before applying for the same. Fund your working Capital and other machinery requirements with this small business loan scheme from SBI.