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With You All the Way

State Bank of India

Loans to SME Units


Presented by:Bipin Bhardwaj, DGM SME,SBI,NEW DELHI LHO

Cluster Financing
SBI is a pioneer and the market leader in Cluster Financing Widest coverage with presence in almost all the clusters Customised products for meeting the varying needs of customers Has financed lakhs of SME units including first generation entrepreneurs

Advantages - SBI
No Collateral Security required for loans below Rs.5 lacs Understands the needs of the units better Wide range of products Competitive rates of interest Coming up with simplified Credit Scoring Models for each industry Helps strengthen Supply Chain Linkages by catering to the needs of all the players Availability of an experienced Technical Team

Needs Addressed
Fund Based Needs: Term Loans Working Capital Needs Bill Purchase Export Credit (Packing Credit/Post shipment Credit) in rupees and foreign exchange Non-fund Based Needs: Letter of Credit Bank Guarantee

Term loan needs


Fixed Capital Expenditure: New Projects Expansion Modernisation Technology Upgradation

Working capital needs


Finance Inventories and Receivables Pre-shipment and Post-shipment Finance Bill discounting

Products for Term loans


Term Loan General Purpose Term Loan for SSIs Open Term Loan Car Loans

Products for WC Requirements


Cash Credit SME Credit Plus Standby line of Credit Bill Purchase/discount EPC (Export Packing Credit) PCFC (Packing Credit in Foreign Currency) EBRS (Export Bills Rediscount Scheme)

Customised Products
Open Term Loan Mortgage Loan for Traders Car Loan for SME Units Rice Mill Plus Dal Mill Plus

Project Uptech & Consultancy Cell


Project Uptech: Unique concept which no other bank can boast of Helps in modernisation, cost reduction and quality assurance 28 clusters covered:foundry, auto components, agro pumps, rice mills, glass industry and sago Activities Undertaken: Provide Technical support Detailed Unit level studies Assists in preparing Business Plan

UPTECH package
To facilitate funding of upgradation projects Concessions Given: Reduced Margins Low interest rates Interest free Equity fund assistance: Upto one lakh Need based WC requirements Assistance in implementation of technical aspects

Consultancy Cell
Provides Counselling support to first time entrepreneurs Techno-economic feasibility Industrial dossiers and database Conduct industrial management programs for entrepreneurs Entrepreneurship Development Programme

Recent Initiatives
Intensifying Cluster Financing efforts in five major industries

Pharmaceuticals Textile Auto ancillaries Engg. & Fabrication Food Processing

Recent Cluster Initiatives


Auto ancillary- Gurgaon, Pune and Chennai
Simplified scoring model to enhance Credit flow to Auto ancillary clusters across the country

Bellary Jeans Cluster identified for Project Uptech by SBI Taken up initiatives to finance Apparel and Weaving parks
Bridge loans given to Implementation Agency for creating infrastructure facilities for the park Loans under Group workshed scheme for setting up units Loans under TUFS for acquiring machinery

Credit Assessment Parameters


Promoters Qualification & Experience Financial & Operational Credibility

Collaterals offered

Studies initiated so far


Textiles: Ludhiana, Bellary & Surat Pharma: Hyderabad, Baroda & Parwada Auto ancillaries: Gurgaon, Pune and Chennai Food Processing: Chittoor & Krishnagiri Engineering: Batala Others: Sivakasi, Morvi & Khurja

SME Characteristics
SMEs: Very attractive segment for banks

loyalty large number potential for profitability.

SMEs primary needs:

Quick and timely availability of credit Understanding of business needs Physical proximity reliability service

TRADERS EASY LOAN Purpose


To Provide hassle free finance to borrowers in trade & services sector who are willing to furnish mortgage of property of adequate value.

Eligibility
1. Existing customers. 2. New connections including takeovers. 3. First generation entrepreneurs as well as promoters of existing units for the purpose of setting up new unit.
The following categories of borrowers will be covered a) Small business enterprises b) Retail traders/wholesale traders c) Professional and Self employed

Special features of the Product


Nature of facility - Term Loan/Cash Credit. Quantum of Loan - Minimum Rs.25,000/Maximum Rs.10.00
crores.

Interest Rate Repayment - upto 60 months Security


Cash Credit: @ 0.50% below SBAR Term Loan: @ 0.25% above SBAR

Primary: Hypothecation of stocks and receivables. Collateral: Mortgage of land & building of realizable value of 133% of loan amount

Terms and Conditions


Mortgaged Property- 65% of the realizable value of the property. (Realisable value of the property will be decided on the basis of the valuation report, which is not more than three months old, of an approved valuer). Term Loan review, Cash Credit renewal on an annual basis, on the basis of the level of activity, credit summation in the account, the interest serviced up to the previous quarter end, and the installments paid. . Stock statement to be submitted once at the time of execution of documents and every three months. Insurance for the full market value of the Property to be mortgaged with Bank and comprehensive insurance for market value of assets acquired out of loan.

RESTAURANT PLUS Eligibility


Individuals (proprietorships) Partnership firms Corporates Trusts (with borrowing powers)
Who are owners of Restaurants or Fast food chains

With You All the Way

State Bank of India

Open Term Loan

Purpose
To provide term loan to the SME units with pre-approved limits for multiple needs of the organization throughout the year

Needs Addressed

Zero sanctioning time Covers all business needs Convenience of closing deals with suppliers instantaneously, with pre-approved limits Liberty to decide when and how much finance required

Special features of the Product


Pre-sanctioned term loan limit up to a maximum of Rs. 250 lacs, valid for a period of 12 months For

Withdrawal as per requirement Application is required only once a year

Addition/replacement of machinery Building or modernizing factory Traveling abroad Buying new hardware/software, Replacing tools, jigs and fixtures Any other business related purpose

Terms and Conditions

Maximum limit of Rs. 250 Lacs (This limit may be relaxed on case to case basis) Loan sanctioned valid for a period of 12 months Repayment period generally not to exceed 3 years after the end of 12 months 10% uniform margin Interest rates linked to credit appraisal Simplified documentation Based on financial statements including FFR Forms

Financing Assistance for Dealers of <<Company>>

Purpose

To provide with financial assistance to dealers of <<company>> for


Working Capital Expansion of the Outlet/Showroom Service station/Other facilities construction Takeover of existing facilities with other Banks

To provide the company quicker remittance from the dealers across the country

Needs Addressed
Dealer

<<Company>>

Organized source of finance Cheaper source of finance Quicker availability of funds Attractive terms and conditions Easy remittance

Facilitates Expansion Zero receivables Franchisee loyalty Efficient Cash Management Higher Franchisee commission No float funds

Facilities/Products to be offered to Dealers


Cash Credit for Working capital LC/Bank Guarantee/Standby Line of credit over and above cash credit for special needs Term Loan
For expansion of outlet For construction of service centre etc.

Corporate Internet Banking (CINB) for direct remittances

Procedure for remittance of funds from dealers to Company

Dealers debits his cash credit account through CINB and authorize credit in Companys account Company faxes a copy of the Invoice to the Branch maintaining Dealers account After the event of sale, the dealer deposits money in his CC account

Terms of Sanction
Subject to establishment of viability Acceptable Credit rating on Credit Scoring Model Acceptable score on Risk Matrix

Terms & Conditions of financing


Eligibility All individuals, associations, trusts, societies, partnerships, corporates having dealership agreement with Company Processing charges - 1% of the Term Loan amount (Service and other applicable taxes extra)

Advantages for Company


Same day direct credit from Dealers MIS of payments via CINB Pan India coverage for all dealers through single account

Advantages for Dealers


Flexible terms and conditions CINB for bypass of Branch Quicker organized finance availability Easy remittances

SBI Advantage

Most experienced financer in Trade financing Special sanctioning cells (SECC & CPC) for quicker turnaround time of sanctioning and disbursal Account Relationship Manager for entities with more than Rs.1 crore turnover Dedicated branch network

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