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Syndicate Bank MSME Loan

MSME (Micro, Small and Medium Enterprise) loans are unsecured loans that are offered by banks and NBFCs to assist Micro, Small & Medium Enterprises to flourish and expand. MSME loans are mostly offered to start-ups and small business owners. The MSME loan’s repayment tenure varies from lender to lender and the interest rates offered are majorly based on the loan amount, applicant’s profile and business history. Syndicate Bank is one of those banks that approves MSME loans.

List of Syndicate Bank MSME Loan

Here is the list of schemes provided by Syndicate Bank MSME Loan

  • SyndUdyog
  • SyndVyapar
  • SyndProfessional
  • SyndDoctor
  • SyndContractor
  • Prime Minister's Employment Generation Programme (PMEGP)
  • Technology Upgradation Fund Scheme
  • Credit Linked Capital Subsidy Scheme (CLCSS)

SyndUdyog

The purpose of this scheme is to assist those micro, small, and medium enterprises which are in the business of manufacture and production of goods.

The features of SyndUdyog are

Loan Type: Under this scheme, loans can be allowed as term loan and working capital.

Maximum Loan Amount: The maximum loan amount is decided as per the need of the project. For Mudra loans, the bank can allow a maximum of Rs 10 lakhs. For stand up India loans to women entrepreneurs or SC/ST, the bank will allow between Rs 10 lakhs and Rs 100 lakhs. There is no maximum limit for any other loans.

Margin: The promoter’s contribution under this scheme is as below-

For Micro and Small Enterprises, the margin would be

FacilitiesMinimum Margin (%)
Up to 25000
Rs 25000 to Rs 100 Lakhs
Above Rs 100 Lakhs

For Medium Enterprises, the margin would be as follows

CategoryMinimum Margin (%)
Raw materials – i) Imported ii) Indigenousi. 15 ii. 25
Stock in process25
Finished goods25
Stores and Spares30
Book debts/receivables (cover supply bills only)20
Plant and Machinery (new)/Vehicle (new25
Land and other fixed assets40
Building25
Second-hand machinery40
Book debts25
Dealers in trucks, cars, tractors and scooters-stock in trade10
Stock in trade30
Second-hand vehicle40

Rate Of Interest: The rate of interest will be decided by the bank as per the banking guidelines.

Repayment Period: If the loan is taken as a term loan, then the repayment period would be 7 to 10 years including the moratorium period. If taken as working capital, then the repayment period is one year and need to be renewed annually.

Security: For existing and new micro and small enterprise customers, the bank will need primary security for credit facilities up to Rs 10 lakhs. No collateral security is required if covered under CGTMSE. For credit facilities above 10 lakhs and up to Rs 2 crore, the bank will require security in the form of Guarantors, hypothecation of assets created out of the bank loan, Mortgage of land and building, etc.

Guarantee: No guarantee is required if the loan is covered under CGTMSE. For those who are not covered the bank will require collateral security or guarantee.

Processing Charges: The processing charges for micro and small enterprises under this scheme is as below

Loan AmountWorking CapitalTerm Loan
Processing Charges Up To 5 LakhsNILNIL
Processing Charges Above 5 LakhsRs.400 per lakh or part thereof with a maximum of Rs.1croreRs.400 per lakh or part thereof with a maximum of Rs.1crore

For Medium Enterprises, the charges would be

Loan AmountWorking CapitalTerm Loan
Processing Charges Up To Rs 25000For priority sector – NIL For non priority sector – Rs 250/-
Above Rs 25000/- to Rs 2 lakhRs 5/- per thousand or part thereof with a minimum of Rs 750/-
Above Rs 2 lakhRs.400 per lakh thereof with a maximum of Rs.50 lakh
Up to Rs 2 lakh 0.50% of the loan amount with a minimum of Rs 250/- ( For priority sector loans up to Rs 25000/- :NIL)
Above Rs 2 lakh to Rs.100 lakh 1% of the loan amount with a minimum of Rs 2500/-
Above Rs 100 lakh1.25% of the loan amount with a minimum of Rs 1.25 lakh and a maximum of Rs 100 lakh

Documentation Charges: Under this scheme, documentation charges up to Rs 2 lakhs is nil and above Rs 2 lakhs would be Rs 200 per lakh up to a maximum of Rs 25,000.

SyndVyapar

The purpose of this scheme to finance those micro, small, and medium enterprises which are in the business of service activities.

The features of SyndVyapar are

Loan Type: Under this scheme loans can be allowed as term loan and working capital.

Maximum Loan Amount: The maximum loan amount under this scheme is decided on the basis of the need for each project. For Mudra loans, the bank will allow a maximum of Rs 10 lakhs. For stand up India loans to women entrepreneurs or SC/ST, the loan amount will be between Rs 10 lakhs and Rs 100 lakhs. There is no maximum limit for any other loans.

Margin: The promoter’s contribution under this scheme is as below

For Micro and Small Enterprises, the margin would be

Credit FacilitiesMinimum Margin (%)
Up to 25000Nil
Above Rs 25000 to Rs 100 Lakhs15
Above Rs 100 Lakhs20

For Medium Enterprises, the margin would be as follows-

CategoryMinimum Margin (%)
Raw materials – i) Imported ii) Indigenousi. 15 ii. 25
Stock in process25
Finished goods25
Stores and Spares30
Book debts/receivables (cover supply bills only)20
Plant and Machinery (new)/Vehicle (new)25
Land and other fixed assets40
Building25
Second-hand machinery40
Book debts25
Dealers in trucks, cars, tractors and scooters-stock in trade10
Stock in trade30
Second-hand vehicle40

Rate Of Interest: The rate of interest will be decided by the bank as per the banking guidelines.

Repayment Period: The repayment period for the term loan is 7 to10 years including the moratorium period. If the loan is taken as working capital, then the repayment period is one year and need to be renewed annually.

Security: For existing and new micro and small enterprises customers the bank will require primary securities for credit facilities up to Rs 10 lakhs. No collateral security is required if covered under CGTMSE. For credit facilities above 10 lakhs and up to Rs 2 crore, the bank will require security in the form of Guarantors, hypothecation of assets created out of the bank loan, Mortgage of land and building, etc. For those loans which are not covered under CGTMSE, the bank will require guarantors, hypothecation of assets created out of bank loan, mortgage of property related to the business, etc.

Guarantee: No guarantee is required if the loan is covered under CGTMSE. For those which are not covered the bank will require collateral security or third party guarantee.

Processing Charges: The processing charges for micro and small enterprises under this scheme is as below

Loan AmountWorking CapitalTerm Loan
Processing Charges Up To 5 LakhsNILNIL
Processing Charges Above 5 LakhsRs.400 per lakh or part thereof with a maximum of Rs.1croreRs.400 per lakh or part thereof with a maximum of Rs.1crore

For Medium Enterprises, the charges would be-

Loan AmountWorking CapitalTerm Loan
Processing Charges Up To Rs 25000For priority sector – NIL For non-priority sector – Rs 250/-
Above Rs 25000/- to Rs 2 lakhRs 5/- per thousand or part thereof with a minimum of Rs 750/-
Above Rs 2 lakhRs.400 per lakh thereof with a maximum of Rs.50 lakh
Up to Rs 2 lakh 0.50% of the loan amount with a minimum of Rs 250/- ( For priority sector loans up to Rs 25000/- :NIL)
Above Rs 2 lakh to Rs.100 lakh 1% of the loan amount with a minimum of Rs 2500/-
Above Rs 100 lakh 1.25% of the loan amount with a minimum of Rs 1.25 lakh and a maximum of Rs 100 lakh

Documentation Charges: Under this scheme, documentation charges for loan up to Rs 2 lakhs is nil and above Rs 2 lakhs would be Rs 200 per lakh up to a maximum of Rs 25000.

SyndProfessional

This scheme aims to assist in financing professionally qualified persons to start their own

practice or to take up self-employment.

The features of SyndProfessional are

Loan: Under this scheme the loan amount can be given as term loan and working capital.

Loan Amount: The minimum loan amount is Rs 10 lakh and the maximum is Rs 10 crores.

Margin: The promoter’s contribution would be 15 % if the loan amount which is up to Rs 100 lakhs, and in case of above 100 lakhs, the margin would be 20 %.

Rate Of Interest: The rate of interest Up to Rs 100 lakh is - One year MCLR+1.25% and for above Rs 100 lakh is One year MCLR+1.75%.

Repayment Period: The repayment period for term loan is 7 to 10 years including the moratorium period. If the loan is taken as working capital, then the repayment period is one year and need to be reviewed thereafter.

Security: For micro and small enterprise customers the bank will require primary securities for credit facilities up to Rs 10 lakhs. The bank does not require collateral security if covered under CGTMSE. For those loans which are not covered under CGTMSE, the bank will need guarantors, hypothecation of assets bought out of bank loan, mortgage of property related to the business, etc.

Guarantee: No guarantee is required if the loan is covered under CGTMSE. For those which are not covered the bank will require collateral security or third party guarantee.

Processing Charges: 50 % concession will be allowed on documentation, and mortgage charges.

SyndDoctor

This scheme is for qualified doctors, registered medical practitioners in Homeopathy, Allopathy, Ayurveda, Unani, etc. and promoters of nursing homes, diagnostic centers. X-ray labs, etc. If there are two partners, one of them should be a qualified doctor with 50 % ownership.

The features of SyndDoctor are

Loan: The loan under this scheme can be allowed as term loan and working capital.

Loan Amount: The minimum loan amount is Rs 10 lakh and the maximum is Rs 10 crores.

Margin: The promoter’s contribution is 15 %, if the loan amount is up to Rs 100 lakhs, and 20 % if the loan amount is above 100 lakhs.

Repayment Period: The repayment period for term loan is 7 to 10 years including the holiday/moratorium period and for working capital the repayment period is one year and need to be reviewed thereafter.

Rate Of Interest: The rate of interest Up to Rs 100 lakh is - one year MCLR+1.25% and for above Rs 100 lakh is one year MCLR+1.75%.

Security: For micro and small enterprise customers, the bank will require primary securities for credit facilities up to Rs 10 lakhs. The bank does not require collateral security if covered under CGTMSE. For those loans which are not covered under CGTMSE, the bank will need guarantors, hypothecation of assets bought out of bank loan, mortgage of property related to the business, etc.

Guarantee: No guarantee is required if the loan is covered under CGTMSE. For those cases, which are not covered under CGTMSE,, will require collateral security or third party guarantee.

Processing Charges: 50 % concession will be allowed on documentation and mortgage charges.

SyndContractor

The purpose of this scheme is to provide timely financial assistance to existing and new registered contractors such as electrical, civil, mechanical and transport contractors.

The features of SyndContractor are

Loan Type: The loan under this scheme can be allowed as term loan and working capital.

Loan Amount: The minimum loan amount is Rs 10 lakh and the maximum is Rs 10 crores.

Margin: The promoter’s contribution is a minimum of 20 %.

Repayment Period: The repayment period for term loan is 7 to10 years including the holiday/moratorium period. Working capital repayment period is limited to one year and need to be reviewed thereafter.

Rate Of Interest: The rate of interest up to Rs 100 lakh is - one year MCLR+1.25% and for above Rs 100 lakh is one year MCLR+1.75%.

Security: For micro and small enterprises customers, the bank will require primary securities for credit facilities up to Rs 10 lakhs. The bank does not require collateral security if covered under CGTMSE. For those loans which are not covered under CGTMSE, the bank will need guarantors such as proprietors, directors, partners or trustee, hypothecation of assets bought out of bank loan, mortgage of property related to the business, etc.

Guarantee: No guarantee is required if the loan is covered under CGTMSE. For those cases which are not covered under CGTMSE, will require collateral security or third party guarantee.

Processing Charges: 50 % concession will be allowed on documentation, processing and mortgage charges.

Prime Minister's Employment Generation Programme (PMEGP)

This scheme aims to generate employment opportunities in urban and rural areas by setting up self-employment projects, ventures and micro enterprises. The scheme can be allowed to any individual above 18 years and any institutions registered under society’s registration Act, etc.

The features of Prime Minister's Employment Generation Programme (PMEGP) are

Project Cost: The project cost allowed is Rs 25 lakhs for manufacturing sector and 10 Lakhs for the service sector.

Margin: The promoter’s contribution would be 10 % for general category borrowers and for special category borrowers, its 5 %.

Subsidy: For general category, the subsidy is 15 % in urban areas and 25 % in rural areas. For special category is 25 % and 35 % for urban and rural area respectively.

Repayment period: The repayment period is between 3 years and 7 years.

Security: Hypothecation of assets purchased out of loan is the primary security. No third party guarantee and collateral security is insisted.

Nodal Agency: At the national level the Khadi and Village Industries Commission is the nodal agency.

Technology Upgradation Fund Scheme

This scheme is made by the Ministry Of Textiles to support modernization in the textile industry by offering incentives, thus, creating more employment opportunities. This scheme can be allowed to sole proprietorships, partnerships, small scale industry units, etc. This scheme covers materials from textile industry such as cotton, silk, wool, etc. and jute industry.

Loan Amount: The loan amount will be assessed according to the project cost.

Margin: The promoter’s contribution, security, etc. will be decided as per the bank guidelines.

Credit Linked Capital Subsidy Scheme (CLCSS)

The scheme aims at facilitating technology upgradation of MSME by giving capital subsidy on institutional finance for the improvement of technology in approved products and sub sectors. This scheme can be availed by partnerships, sole proprietors, co-operative societies, registered existing MSE units, etc.

Loan: The loan will be allowed as per the need. However, the maximum amount allowed is Rs 100 crore.

Subsidy: 15 % back end subsidy is provided. However, this will be on the basis of the cost of Plant and Machinery.

Eligibility Criteria of Syndicate Bank MSME Loan

The eligibility criteria of Syndicate Bank MSME Loan is determined as per the scheme selected by the borrowers.

Documents Required for Syndicate Bank MSME Loan

  • Proof of address such as passport, telephone bills, electricity bills, etc
  • Photo copies of lease deeds, sanction letters from existing banks
  • Identity Proof such as PAN card, Voter’s ID, Passport, Driving license, etc
  • Business addresses
  • Rent agreement, if business
  • Copy of VAT

Application Procedure of Syndicate Bank MSME Loan

You can apply for the MSME loan through the bank’s official site or you can visit Syndicate Bank branch near you.

FAQs on Syndicate Bank MSME Loan

1. What is called moratorium period?

A moratorium period is the time of the loan term where the borrower does have to make a repayment.

2. What is collateral security?

A collateral security is an asset which the borrower has to pledge to the bank in order to get a loan. If the loan is not repaid, the bank will sell the collateral security to get back the loan amount.

3. What is working capital loan used for?

If the borrower is taking a working capital loan, he or she needs to use it for short-term operational needs. Working capital loans are not used for buying any fixed assets, or investments.

4. Is Insurance necessary for SyndUdyog?

For loans exceeding Rs 50000, insurance is required under SyndUdyog.

5. What do you mean by margin?

Promoter contribution or margin is the sum of money which the borrower has to pay from their personal funds for obtaining a loan. The balance amount will be allowed as loan by the bank.

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