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SIDBI’s Term Loan to enhance the production of MSMEs (STEP) Scheme

  • 07-May-2022

The small industrial development bank of India (SIDBI) has recently launched a new scheme known as SIDBI’s Term Loan to Enhance Production OF MSME (STEP) Scheme.   


The objective of the Scheme  

The objective of SIDBIs is to facilitate medium/short-term financial assistance to eligible MSMEs for augmenting NWC and/or executing urgent confirmed orders.  


This scheme aims to give Incremental working capital requirements for micro small and medium enterprises (MSME) after satisfying the non-enhancement of regular WC limit from existing lenders.  


Key Features of the STEP Scheme  

The following are the key features of the SIDBI’s Term Loan to Enhance Production of MSMEs (STEP) Scheme as given below:  


  • Step scheme is known to be the quickest funding product for small industrial bank of development. Typically, availing loan under this type of scheme will get sanctioned within 48 hours.


  • It provides up to 100% finance for new and existing ministry of micro, small and medium enterprises.


  • Under the step scheme, the borrower doesn’t need to pay any processing fee.


  • To avail of loan under the scheme, businesses will get funding for augmenting NWC and or executing emergency confirmed orders.


  • In addition, this scheme includes the factuality that borrowers can avail of CGTMSE cover.


  • A simplified application process and minimal requirements of documentation make the loan process much easier.


Eligibility Criteria for STEP Scheme  


  • According to micro small and medium enterprises development act 2006, only existing MSMEs can obtain the benefits of this scheme.


  • To get financial assistance under the STEP Scheme, the MSME unit must have at least 3 years of operation and a minimum of 3 years of an existing customer of SIDBI.


  • Business must generate profit during the past 2 years and 1 year for existing customers of SIDBI.


  • Borrowers who are not availing of western coalfields limited (WCL)/ Overdraft account facility from any lending institution are eligible to get a working capital term loan.


  • Applicants should not have any default on any banks and financial institutions.


Eligible Enterprises   

Under SIDBI’s Term Loan to Enhance Production of MSMEs (STEP), SIDBI offers term loans to micro small and medium enterprises.  


Quantum of Assistance  

The following are the quantum of assistance under the STEP scheme as given below:  

  • Avail up to Rs.200 lakh for new customers
  • Avail up to Rs.300 lakh for existing SIDBI customers


Interest Rate  

Typically, the interest rate charged for the loan under SIDBI’s Term Loan to Enhance Production of MSMEs (STEP) Scheme is based on return on investment according to internal rating and the marginal cost of funds-based lending rate (MCLR).  


Loan Repayment Period  

It allows you to repay loan tenure for up to 36 months (3 years including a moratorium of up to 6 months) under the SIDBIs Step Scheme.  


Documents required   

Listed below are the documents required to avail a loan under this Scheme: -    


  • KYC papers as per the guidelines of the bank.
  • Audited financial statements for the last 3 months.
  • Copy of Partnership deed, MoA (Memorandum of Association), Trust deed.
  • Proof of Identity document
  • Proof of Address document
  • Copy of lease agreement and rent
  • Copy of Udyog Aadhar Memorandum.
  • Copy of sanction letter of other banks for the arrangement of existing banking.
  • Copy of GST registration certificate.
  • Proforma Invoice for the machinery.
  • Copy of consent to establish from Process Control Book (PCB).
  • Information about loans given by the financial institutions, banks, and NBFCs that are currently outstanding.
  • The application should be filed for the requirement of additional power load.
  • Documents of existing power load.
  • Statement of immovable directors and promotors.


Other documents   

  • Copy of Udyog Aadhar Memorandum
  • Copy of GST Registration Certificate
  • Copy of sanction letters of other banks for fund arrangement (in case of any existing loan)


The application procedure for STEP Scheme   

  1. The eligible micro-enterprises require to access the online application page of SIDBI to apply for the scheme.
  2. The registration page will be displayed on their screen, click on the registration tab to register as a new user to get a loan.
  3. The entities are required to provide information of enterprise phone number, name, total loan requirements, and email address.
  4. After the completion of registration, the password and username will be given to the entity.
  5. Then, log in to the portal and fill in a one-page application form.
  6. After the verification of KYC documents and due diligence, the loan amount will be credited to their respective account within 48 hours.

Financeseva helps you to avail SPEED Scheme with the best rates and terms.   

Also Read: SIDBI – Loan for Purchase of Equipment for Enterprise’s Development (SPEED)

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