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SBI Small Business Loan

State Bank of India (SBI) is the 45th largest public sector bank in the world, possesses Rs 37 lakh crore assets and 500 million customers, and is the largest public sector bank in India. The SBI offers a wide range of business loans, a popular one among them is simplified SBI small business loan.  

SBI small business loan falls under the category of SME (Small Medium Enterprises) loans. The main purpose of a small business loan is to build up current assets and fixed assets needed for business growth and expansion. 

The loan amount under this loan ranges from Rs 10 to 25 lakh. The repayment period of the loan is 60 months.

Features of SBI Small Business Loan

Below are the features of small business loan:

  • Drop-line overdraft facility 
  • This facility is available for all business units involved in manufacturing services as well as entrepreneurs and professionals, wholesalers/retailers
  • The minimum and maximum loan amount is 10 times the average current account balance for the last 12 months, subject to: 

           Minimum: More than Rs. 10 lakhs. 

           Maximum: Less than Rs. 25 lakhs.

  • Competitive interest rates and are associated with MCLR (Marginal Cost of Funds based Lending Rate)
  • Minimum collateral is 40%
  • Repayment loan period 60 months
  • Rs. 7500/00, unified charges (comprising EM charges, handling fee, document fee, inspections, etc.)

Eligibility for SBI Small Business Loan

  • Manufacturing companies, entrepreneurs, professionals, and wholesale/retail units are eligible to get this loan. 
  • The business must have been in the same place for at least 5 years.
  • The business should be in the name of the borrower or have a valid tenant agreement with the owner.
  • The average minimum monthly balance must be higher than Rs 100,000 in the last 12 months.
  • The borrower must also meet the Go/No Go eligibility criteria. If any of the parameters is answered “No” then the business unit is considered ineligible to get the loan under this loan plan, and no deviation is allowed.

Also Read: SBI Bank Two Wheeler Loan

Assessment Process

  • Assessment based on needs and credit limit will be performed by the bank. For this business’s financial statements are not needed. 
  • The guarantee is valid for five years, so the maximum duration of advance payments under the scheme is 5 years (60 months).
  • Average monthly balance of 10 times in the current account for last 12 months with a minimum Rs. more than Rs. 10 lakhs and less than the maximum Rs. 25 lakhs.

How to Apply for SBI Small Business Loan?

  • You can apply online for an SBI business loan from the official website of the State Bank of India (SBI), by clicking on the Business tab.  
  • On clicking businesses, a new page will open where under SME tab click on Simplified small business loan.
  • By clicking on simplified small business loan a new page will open where you can click the Apply Now button.
  • When you click on apply now button an application form will open. Fill in the form and fill the captcha box given there.
  • Now click on ‘Submit‘.
  • A bank representative will contact you and help you with the small business loan process.
  • To apply offline for this business loan you have to visit the nearest SBI branch with all related documents. An SBI representative will help you with the application process.

Interest Rate for SBI Small Business Loan

The interest rate for a small business loan from SBI is 8.25 percent to 16.95 percent. And processing and other charges are 0.35% plus taxes to 1.00% of loan sanctioned.

Conclusion

The State Bank of India (SBI) provides business loans to people who need financial assistance to grow their businesses. People of the country can obtain secured and unsecured loans through SBI banks. 

SBI provides this loan to small businesses and traders to start any business, and to the existing businesses to create assets and to increase fixed assets to grow the business. So this loan helps small existing businesses and new businesses to start a business. 

SBI loans for small businesses belong to the category of small and medium-sized loans. These loans are offered against the current account balance. The loan amount ranges from Rs 10 to 25 lakhs. The repayment period can be up to 60 months.

FAQs SBI Small Business Loan:

What is the maximum amount for a small business loan?

The minimum amount that you can borrow under a small business loan is 10 lakhs and the maximum amount is 25 lakhs. But the final amount sanctioned by the bank is based on various factors including your eligibility and the sole discretion of the bank.

How much collateral do I have to pledge against the small business loan? 

For a loan to be approved, you must pledge at least 40% of the loan amount sanctioned.

SBI Small Business Loan Falls under Which Section?

The SBI simplified small business loan falls under the SME loan category. 

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