SBI Rice Mill Plus is a specific loan scheme for Indian existing and new rice mill owners. The bank provides the financial assistance for setting up new rice mill or development of an existing mill. Here in this post, we put details about the loan and how to apply for the same.
Eligibility For SBI Rice Mill Plus Loan
Any individual who is engaged in the activity of rice milling business can apply for the loan. However, he or she must have a credit rating of SB-9 (State Bank of India’s rating scale) or above. You can use the fund for acquisition of machinery, factory building or for modernisation or expansion of the existing premises. In addition, you can use the fund as working capital too.
For applying term loan, you will need to ensure a 15% to 25% margin money. On the other hand, for applying for a working capital loan, you will need to ensure a 15% to 40% margin money to avail the scheme. If you are applying for an existing unit, your unit must be profit making.
Amount Of Loan & Interest Rate
SBI can sanction the loan as a working capital facility (fund based or non-fund based) or term loan. Generally, the amount of loan depends on the several aspects. The list includes applicant, project cost and need-based working capital requirement of the business. However, there is no upper ceiling on the amount of loan under this scheme.
Interest and Repayment
Generally, bank sanction Rice mill plus loan with a floating interest rate. Basically, the bank determines the interest rate on the size of limit, the value of collateral security provided and borrower risk profile.
Term loan sanctioned under this scheme typically have a repayment period of between 5 to 7 years excluding moratorium period of 12 months. However, the working capital facility has a 12 month period, subject to renewal based on the satisfactory conduct of the account.
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Collateral Security for SBI Rice Mill Plus Loan
A loan less than Rs.10 lakhs can be sanctioned under the CGTMSE scheme without any collateral security. However, bank tends to secure the loan amount over Rs.10 lakhs by way of an equitable mortgage of property or tangible security belonging to the borrower or guarantor.
In addition to the collateral security, the bank can extend hypothecation or pledge over assets created out of bank’s finance. Additionally, you will need to insure all assets created using the bank loan to the full value by the business.