MUMBAI: The State Bank of India today announced that it has launched a new product to provide short term demand loan for working capital to its MSME clients.
The new initiative, called SME Assist, would provide loans to MSME clients based on their Goods and Services Tax (GST) input credit applications.
The loans will be offered at a concessional interest rate, the bank said in a statement.
“This product will help them manage their need for working capital until they get an input credit. It will also help stabilize SMEs so that they can run their operations without any obstacles,” said the director. General (SME) of the bank, V Ramling, in the statement here today.
The loan will be sanctioned outside of Assessed Bank Finance (ABF) at 20% of the existing working capital limit or 80% of the input tax claim due on purchases, whichever is lower.
The loan processing fee under the scheme is Rs 2,000. Companies applying for a loan under the product must provide a certificate from their chartered accountant confirming the receivables on inputs.
Under the scheme, SME borrowers would benefit from a moratorium period for the first three months, the bank said.
The ad hoc amount can be repaid in one installment or in six EMIs over the next six months after the end of the moratorium period. SME clients of the bank can benefit from a loan under the facility until March 31, 2018.
The new initiative, called SME Assist, would provide loans to MSME clients based on their Goods and Services Tax (GST) input credit applications.
The loans will be offered at a concessional interest rate, the bank said in a statement.
“This product will help them manage their need for working capital until they get an input credit. It will also help stabilize SMEs so that they can run their operations without any obstacles,” said the director. General (SME) of the bank, V Ramling, in the statement here today.
The loan will be sanctioned outside of Assessed Bank Finance (ABF) at 20% of the existing working capital limit or 80% of the input tax claim due on purchases, whichever is lower.
The loan processing fee under the scheme is Rs 2,000. Companies applying for a loan under the product must provide a certificate from their chartered accountant confirming the receivables on inputs.
Under the scheme, SME borrowers would benefit from a moratorium period for the first three months, the bank said.
The ad hoc amount can be repaid in one installment or in six EMIs over the next six months after the end of the moratorium period. SME clients of the bank can benefit from a loan under the facility until March 31, 2018.
