Stand Up India Scheme

What is Stand Up India Scheme

The Stand-Up India scheme aims to encourage all scheduled bank branches in extending loans of Rs10 lakh-Rs 1 crore to at least one SC/ST borrower and at least one women borrower per bank branch for setting up their own greenfield enterprises. In the case of non-individual enterprises, SC/ST or women entrepreneurs should hold a minimum of 51% of the shareholding and controlling stake in the enterprise.

Apart from linking borrowers to scheduled banks for loans, the Stand Up India Scheme online portal, developed by Small Industries Development Bank of India (SIDBI), offers guidance to entrepreneurs to set up business enterprises, starting from training to filling up loan applications, as per bank requirements. The scheme provides borrowers the information about various entities offering the following handling support:

• Training – Technical and/or Financial
• Margin money support
• DPR Preparation
• Bill discounting
• E-com registration
• Shed/workplace identification
• Raw material sourcing
• Registration for taxation

Stand Up India Scheme Highlights

Interest Rate	Lowest applicable rate of the bank for the rating category
Loan Amount	Rs 10 lakh to Rs 1 crore
Repayment Tenure	7 years including a moratorium period of up to 18 months)
Margin Money	15% with at least 10% of the project cost as borrower’s own contribution and the rest can be arranged in convergence with other Central/State schemes

 

 

Features of Stand Up India Scheme

Interest Rate

The interest rate of loans under Stand Up India Scheme would be the lowest applicable rate of the bank for the rating category. The interest rate should not exceed the base rate + 3% and tenure premium.

Loan Amount

Nature of loan: The scheme offers composite loans (working capital and term loan) ranging from Rs 10 lakh to Rs 1 crore.

Size of the loan: Loan amount offered under this scheme, including the term loan and working capital loan facilities, is 85% of the project cost. However, if the borrower’s contribution and support from other schemes exceed 15% of the project cost, the provision of 85% of the project cost as a loan amount would not apply.

For working capital of up to Rs 10 lakhs: The loan will be in the form of an overdraft. Rupay Debit Card will be issued to the borrower.

For working capital above Rs 10 lakhs: The loan will be sanctioned in the form of a Cash Credit limit.

Repayment Tenure

The repayment tenure of the Stand Up loans is 7 years, including a moratorium period of up to  1.5 years.

Security

Apart from the primary security, banks may require additional security from the borrower in the form of collateral security or credit guarantee cover offered through the Credit Guarantee Scheme for Stand-Up India (CGSSI)

Margin Money

Borrowers availing Stand Up India Scheme would have to offer 15% of the project cost margin money, with their own contribution being at least a minimum of 10% of the project cost while the rest of the margin money requirement can be arranged in convergence with eligible Central or State schemes

How to Apply for Loan Under Stand Up India Scheme – Online Application

Prospective borrowers can avail loans under the Stand Up India Scheme by directly visiting the branches of Scheduled Commercial Banks or through SIDBI’s Stand Up India Portal or through the Lead District Manager (LDM). The registration under Stand Up India Scheme is free of cost.

Stand Up India Scheme Eligibility

Stated below are the eligibility criteria for availing loans under the Stand-Up India Scheme:

• Borrower: SC/ST and/or women entrepreneur
• Minimum Age: 18 years of age
• Project: The loan can be availed for only green field projects i.e., the first-time venture of the beneficiary in the services, agri-allied activities, manufacturing or the trading sector.
• 51% of the shareholding and controlling stake should be held either by women entrepreneurs and/or SC/ST, in the case of non-individual enterprises
• Applicant should not be a defaulter in any bank or financial institution

Documentation for availing loan under the Stand Up India Scheme

Stand- Up India Loan Application Documents

• Proof of Identity: Voter’s ID Card/Driving License/PAN Card/Signature identification from present bankers of the proprietor, Passport, partner of director (if a company)
• Proof of Residence: Recent telephone bills, property tax receipt/passport/voter’s ID Card of proprietor, electricity bill, partner of Director (if a company)
• Proof of business address
• Applicant should not be a defaulter in any Bank or any F.I.
• Memorandum and articles of association of the Company or Partnership Deed of partners etc.
• Assets and liabilities statement of guarantors and promoters along with latest income tax returns.
• Rent Agreement (if business premises are on rent) and clearance from pollution control board if applicable.
• SSI / MSME registration if applicable.
• Projected balance sheets for the next 2 years in case of working capital limits and for the tenure of the loan in case of term loan
• Photocopies of lease deeds/ title deeds of all the properties being offered as primary and collateral securities.
• Documents to prove whether the applicant belongs to SC/ST Category, if applicable.
• Certificate of incorporation from ROC to establish whether majority stake holding in the company is in the hands of a person who belongs to SC/ST/Woman category.

For loans above Rs 25 lakhs

• Profile of the unit (includes names of promoters, other directors in the company, the activity being undertaken addresses of all offices and plants, shareholding pattern etc.
• Last 3 years’ balance sheets of the Associate or Group Companies (if any).
• Project report (for the proposed project if term funding is required) containing details of the machinery to be acquired, names of suppliers, from whom to be acquired, price, financial details like capacity of utilization assumed, production, capacity of machines, sales, projected profit and loss and balance sheets for the loan tenure, labour details, staff to be hired, etc.
• Manufacturing process if applicable, the major profile of executives in the company, details about raw material used and their suppliers, any tie-ups, details about the buyers, major competitors and the company’s strengths and weaknesses as compared to their competitors, etc.