Always opt for SIDBI Loans

There are several Advantages of SIDBI Loans but most of the borrowers are unaware about it. SIDBI stands for Small Industrial Development Bank of India. The main objective of SIDBI is to promote the Manufacturing Activities of the Micro, Small and Medium Enterprises. And to achieve that SIDBI gives hosts of benefits to the borrowers.

Key Benefits of SIDBI Loans:

• Collateral Free Loans (No Additional Security in the form of Land, Building or LIC Policies)
• No CGT Premium
• Only for funding Capex (Purchase of Machineries mainly)
• Rate of Interest linked to Repo Rate (Floating Rate)
• Tenure Available Up to 5 Years

• One of the Lowest Rate of Interest Currently, the ROI is as low as 7.50% per annum, which is Repo Rate (6.50%) plus the Spread of 1%
• Fast Approvals (10-15 Days)
• Very Convenient for the Foreign Payments for purchase of machinery
• Automatic Approval for relevant Subsidy Schemes (If Applicable)
• Easy Pre-Payment Terms

Strategically, it is very important, that every client should borrow machinery loans from SIDBI, if possible, because it can save huge amount of financial costs for the client. Just to give an example in the current times, following is the comparison:

To Summarize, SIDBI can help you save close to 3% per annum in interest cost and about 1-1.25% per annum in terms of CGT Premium Cost. So total about 4% per annum can be saved with SIDBI.

Not only that, but the borrower can also save his collateral for Working Capital Funding, where he can either have higher funding or have lower cost of borrowing because of better coverage.

Clearcut, it is Advantage SIDBI !!!