State Bank of India (SBI), one of the leading public sector banks in India, recognizes the pivotal role that startups play in driving innovation and economic growth. To empower aspiring entrepreneurs, SBI offers Startup Loan, a targeted financing solution to address the specific needs of startups. Although both the SBI Startup Loan and Business Loan support business ventures, the Startup Loan offers certain advantages including potentially lower interest rates and relaxed eligibility criteria.
SBI startup loan is designed specifically for individuals or businesses in the early stages of operation. It's ideal for those seeking financial support to establish their venture, invest in equipment, or manage working capital. SBI Startup Loan offers competitive interest rates, with rates varying based on loan amount, scheme, and borrower profile.
Table of Content
- ⇾ SBI Startup Loan Features
- ⇾ Types of SBI Startup Loan Schemes
- ⇾ Pradhan Mantri Mudra Yojana (PMMY)
- ⇾ Credit Guarantee Fund Scheme (CGFS)
- ⇾ Stand Up India Scheme
- ⇾ SBI MSME UDAAN Loan Scheme
- ⇾ SBI Loan For Finance To Food Processing Industry
- ⇾ Documents Required For SBI Startup Loan
- ⇾ SBI Business Loan EMI Calculator
- ⇾ Steps To Use A Business Loan EMI Calculator
- ⇾ Frequently Asked Questions
SBI Startup Loan Features
SBI Startup Loan offers a variety of business loan products that can be helpful for startups, depending on the nature of the business and its needs.
The following table outlines the key features of the SBI Startup Loan.
| Feature | Description |
|---|---|
| Loan Amount | Rs. 10 lakh to Rs. 500 crore |
| Interest Rate | Starting from 8.50% p.a. (MCLR/EBLR linked) |
| Repayment Tenure | Up to 15 years |
| Eligibility | Registered business, good credit history (may vary) |
| Government Schemes | Pradhan Mantri Mudra Yojna (up to Rs. 10 lakh), Stand-up India (up to Rs. 1 crore) |
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Types of SBI Startup Loan Schemes
The startup loan schemes are designed to provide the necessary financial support and resources to help entrepreneurs. Startup loan schemes can vary in terms of their eligibility criteria, loan amounts, interest rates, repayment terms, and other features. Some schemes are for specific industries or sectors.
Let's take a look at the types of startup loan schemes given by SBI.
Pradhan Mantri Mudra Yojana (PMMY)
The Pradhan Mantri Mudra Yojana (PMMY), launched in 2015, is a government scheme in India that provides financial assistance to micro and small businesses.
- Objective: Provide loans up to Rs. 10 lakhs to non-corporate, non-farm micro and small enterprises.
- Loan categories:PMMY offers loans under three categories based on the stage of business growth: Shishu, Kishore, and Tarun.
- PMMY's Shishu category offers loans up to Rs. 50,000, which can be helpful for startups to cover initial expenses like equipment, raw materials, initial inventory, marketing costs, and setting up a workspace.
- MUDRA loans are easier to obtain, with less documentation and typically no collateral required.
Alternative
If your startup has high growth potential, attracting angel investors or venture capitalists could be an option, though it often involves giving up some equity.
Credit Guarantee Fund Scheme (CGFS)
The Credit Guarantee Fund Scheme for Startups (CGFS) is an initiative by the Indian government specifically designed to address challenges faced by startups in acquiring loans. The CGFS provides credit guarantees on loans extended to eligible startups by Member Lending Institutions (MLIs) like banks, NBFCs, and venture debt funds.
- Apply for Loan: The startup approaches an MLI participating in the CGFS scheme for a loan.
- Assessment by MLI: The MLI evaluates the startup's business plan and creditworthiness.
- Guarantee Approval: If approved, the MLI can apply for a guarantee cover from the CGFS.
- Loan Disbursement: Upon approval of the guarantee, the MLI disburses the loan to the startup.
- Default Scenario: In case of loan default by the startup, the CGFS partially reimburses the MLI for the outstanding amount (as per scheme guidelines).
Stand Up India Scheme
The Stand Up India Scheme can potentially be beneficial for a certain segment of startups in India. The scheme is aimed at promoting entrepreneurship among Scheduled Caste (SC) or Scheduled Tribe (ST) borrowers and women entrepreneurs.
- For setting up a greenfield enterprise, Stand Up India facilitates bank loans between Rs. 10 lakh and Rs. 1 Crore.
- If a startup founder belongs to the SC/ST community or is a woman, and the business is a greenfield enterprise (new venture) in manufacturing, services, or trading, then they might be eligible for a Stand Up India loan.
- Stand Up India provides loans at a relatively early stage, which can be helpful for startups with limited capital.
SBI MSME UDAAN Loan Scheme
The SBI MSME UDAAN Loan Scheme is a financial product offered by the State Bank of India specifically designed to support startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT).
- Startups registered with DPIIT are the target borrowers of the SBI MSME UDAAN Loan Scheme.
- SBI MSME UDAAN Loan Scheme provides a term loan or working capital facility to meet various business needs of startups, such as prototype creation, website/product or app development, legal and consulting services, sales and marketing, hiring teams, and certifications.
- Eligibility: This scheme targets startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT).
- Criteria: A strong business plan, financial projections, and documents related to DPIIT registration might be required.
SBI Loan For Finance in Food Processing Industry
SBI offers business loans specifically for financing the food processing industry. This specific loan supports various needs of businesses involved in food processing, including setting up a new food processing unit, expanding existing facilities, upgrading equipment and technology, and working capital for raw materials and operations.
- Loan Amount: The loan amount can vary depending on your business requirements and project cost.
- Interest Rates: SBI's food processing loan interest rates are linked to external benchmarks like MCLR (Marginal Cost of Lending Rate) and RLLR (Retail Lending Rate). Rates typically range from 0.45% to 2.90% above the benchmark rate depending on your creditworthiness and loan type.
- Customized Solutions: SBI might offer customized loan options based on your specific needs within the food processing sector.
- Businesses of all sizes can apply, including small, medium, and large enterprises involved in food processing activities.
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SBI Startup Loan Eligibility Criteria
SBI has established a set of eligibility criteria that applicants must meet to qualify for the Startup Loan. By understanding the SBI Startup Loan eligibility criteria, aspiring entrepreneurs can see if they are prepared to apply for this loan. They can take the necessary steps to enhance their chances of securing the loan.
- Business Type: The type of business activity should be aligned with the specific loan scheme you're applying for (e.g., food processing loans for food startups).
- Financial Health: A good credit history, positive financials, and a well-drafted business plan are generally looked upon favorably.
- Collateral: Depending on the loan amount and SBI's assessment, collateral security like property or equipment might be required.
Quick Tip: Besides business loan from SBI you can also get Business Loan for a Start-Up or a , Personal Loan for Start Up from other banks & NBFC lenders.
Documents Required For SBI Startup Loan
To apply for the SBI Startup Loan, entrepreneurs must submit certain documents. These documents allow SBI to evaluate if the new business idea is viable and if the applicant is capable of repaying the loan.
General Documents
- KYC Documents: Aadhaar Card, PAN Card, Voter ID/Passport/Driving License.
- Business Registration Documents:
- Proprietorship: Copy of Shop Act Registration/Municipal Trade License
- Partnership: Partnership Deed & Registration Certificate
- Limited Liability Company (LLC): Certificate of Incorporation, Memorandum of Association (MOA), Articles of Association (AOA).
- Bank Statements: The latest 12 months' bank statements for your business account.
- Financial Documents: Profit and Loss Statements, Balance Sheets, and Projected financials for startups.
Additional Documents (Depending on the Scheme)
- SBI MSME UDAAN Loan Scheme:A strong business plan, financial projections, and documents related to DPIIT registration (if applicable).
- Loan for Finance to Food Processing Industry: Project report outlining the food processing activity, and details on equipment and machinery requirements.
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SBI Business Loan EMI Calculator
A Business Loan EMI Calculator is a financial tool available online or through some bank websites. It helps you estimate the monthly EMI (Equated Monthly Installment) payment you would make for your SBI startup loan based on the factors you input.
The business loan EMI calculator considers these factors to calculate your SBI startup loan.
- Loan Amount: The total amount of money you want to borrow.
- Interest Rate: The annual interest rate charged on the loan (interest rates can vary depending on the lender, loan amount, and your creditworthiness).
- Loan Tenure: The total duration (in years) for which you borrow the loan.
Steps to Apply For SBI Startup Loan
There are two main ways to apply for an SBI startup loan: online and offline (in person at a branch). Here are the steps to apply for an SBI startup loan.
SBI Startup Loan Online Application
Step 1:Visit the SBI website and find the loan section. You can search for "SBI Startup loan".
Step 2: Take time to compare interest rates, loan amounts, repayment terms, and processing fees to select the loan that best suits your needs.
Step 3: Once you've chosen your loan, click on "Apply Now" or "Online Application" to begin the process.
Step 4: Fill out an online form with your personal information, employment details, income details, and the desired loan amount.
Step 5: Along with the application, upload scanned copies of the required documents in the specified format.
SBI Startup Loan Offline Application
Step 1:Find your nearest SBI branch. You can use the branch locator on the SBI website to find a branch convenient for you.
Step 2:Visit the branch and express your interest in applying for an SBI Startup loan. A loan officer will be able to guide you through the process.
Step 3:The loan officer will provide you with a physical application form. Fill out the form with your details.
Step 4:Provide the loan officer with the necessary documents, including proof of identity, address proof, income proof, and possibly a PAN card.
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Frequently Asked Questions
Yes, startups can get bank loans, but it's harder than for established businesses due to a lack of credit history and collateral. Banks prefer solid business plans and strong financial projections.
To be eligible for a startup loan in India, you typically need to be at least 21 years old, have a good credit score, and have a solid business plan for a new or young company.
The amount of loan you can get for a startup in India varies depending on the lender and your qualifications. It can range from Rs. 10 lakh to Rs. 75 lakh, but some lenders may offer even higher amounts.
SBI offers startup solutions through any branch, including dedicated relationship managers and financial products.
Best banks include Yes Bank (Yes Head Startup) and RBL Bank (Indian Startup Club) due to their startup-friendly features and services like waived minimum balance requirements and business networking opportunities.
Taking a loan can kickstart your startup by providing the necessary funds, but it adds debt and pressure to succeed. Carefully consider your business plan, loan terms, and alternative funding options before deciding.
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