SBI Working Capital Loan

A Working Capital Loan facilitates businesses in managing day-to-day operations by covering operational expenses and short-term financial obligations. The State Bank of India (SBI) provides working capital loans of up to Rs. 20 Crores to assist companies in managing cash flow, inventory, accounts payable, and other immediate financial needs.

SBI working capital loans support businesses in various sectors, ensuring the smooth functioning of their operations without interruptions caused by financial constraints. This webpage aims to provide.

SBI Working Capital Loan Interest Rates

Here’s the table below that provides the details for SBI Working Capital Loan interest rates, and other charges that can affect businesses seeking this form of financial assistance:

SBI Working Capital Charges
Interest Rate MCLR + 2.30% p.a.
Processing fee 1% of the limits
Other Charges As per bank guidelines
Loan Amount ₹10 Lakhs-₹20 cr.

Compare Banks For Working Capital Loan

The table provides the details on the bank that provides a working capital loan. Go through the table to evaluate and choose the most suitable option tailored to their financial needs and capacity.

Banks Interest Rate
SBI MCLR + 2.30% p.a.
HDFC Bank At the discretion of the bank
Indian Overseas Bank At the discretion of the bank
Razorpay 15% per annum.
Bandhan Bank 10.6% - 16.64% p.a

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Note- The interest rates are dynamic and subject to change based on your credit history and creditworthiness.

Features & Benefits of SBI Working Capital Loan

These features below outline the inclusivity, flexibility in loan amounts, and the property-backed collateral system that makes the SBI Working Capital Loan the right financial option for various businesses.

  • Objective-Based Financing: Tailored for short-term operational needs such as inventory management and cash flow stability. All Business Units who want to avail of loan facility for manufacturing and services activities along with self-employed and professional individuals covered by MSMED Act 2006, wholesale/retail trade. Unit should be registered as MSME.
  • Flexible Loan Structures: Offers a revolving line of credit with adaptable usage based on the business's fluctuating requirements. Facilities Available: Drop-line Overdraft facility OR Cash Credit.
  • Collateral Flexibility: May have lenient collateral requirements, enabling businesses to use current assets or receivables. Quantum of Loan: Minimum loan amount: > Rs 10 lakhs. Maximum loan amount: Rs. 20 Cr. (However, in cities viz, Mumbai, Delhi loans up to Rs.30 Cr can be considered) Special Feature: Loan-To-Value (LTV) ratio of 60% of the realizable value of the immovable property.
  • Interest on Utilized Funds: Interest payments apply to the borrowed and utilized amount, not the entire credit limit.
  • Ease of Access: Provides convenient access to funds when required, ensuring smooth business operations and financial stability. Immovable property (compliant under SARFAESI Act) belonging to the unit, its proprietor/partners/ directors, or their near relatives.

Documents Required to Apply for SBI Working Capital Loan

To initiate the application process for an SBI Working Capital Loan, applicants need to provide specific documents to ensure a smooth and efficient evaluation. The necessary documents include:

1. KYC Documents:

  • Identity proof and address proof of the business owner/partners/directors.
  • PAN card of the business entity.

2. Business Registration Documents:

  • For Sole Proprietorship: Business registration certificate.
  • For Partnership: Partnership deed.
  • For Private/Public Limited Companies: Certificate of incorporation, memorandum of association, and articles of association.
  • Bank statements for the past 1 year

Eligibility Criteria for SBI Working Capital Loan

These eligibility criteria are outlined below that businesses must meet to qualify for SBI working capital loans.

  • Age: 25 years
  • Business should be at least 3 years old
  • Latest Income Tax Returns required
  • Business should not be blacklisted
  • The location should not be in a negative location list
  • Trusts, NGOs not eligible

Types of SBI Working Capital Loans

SBI offers various types of working capital loans tailored to meet diverse business requirements. These categories of loans are discussed based on their specific objectives, target audience, and the loan amount provided.

SBI Asset Backed Business Loan for Commercial Real Estate

  • Objective: Facilitate the creation or acquisition of commercial real estate properties such as office buildings, retail spaces, hotels, and more.
  • Eligibility: Open to Proprietorships, Partnerships, Companies, and LLPs.
  • Collateral: The loan is asset-backed, with the property itself serving as collateral.
  • Coverage: Avail ₹10 Lakhs - ₹50 Crores for tenure up to 6 years

SBI Simplified Small Business Loan

  • Objective: General-purpose funding for diverse businesses
  • Target Audience: All business units in services, manufacturing, etc.
  • Loan Amount: Minimum Rs 10 lakhs to a maximum of Rs 20 Cr.
  • Collateral: Minimum 40% collateral required; 5-year local presence for existing businesses.

SBI SME Credit Card

  • Objective: Catering to various credit needs
  • Eligibility: Retail traders, SSI units, self-employed
  • Loan Amount: Above Rs 25,000, requiring a 20% margin
  • Collateral: No collateral is required for SSI units

SBI E-Dealer Finance Scheme

  • Objective: Aiding distributors' inventory purchases
  • Target Audience: Authorized industry dealers
  • Loan Amount: 100% financing available
  • Collateral Interest linked to Marginal Cost Based Lending Ratio (MCLR)

SBI E-Vendor Finance Scheme

  • Objective: Tailored financing for vendor transactions
  • Target Audience: Vendors of reputed corporates
  • Loan Amount: Criteria based on vendor profitability
  • Collateral: Requirement based on collaboration terms

SBI Fleet Finance

  • Objective: Funding for vehicle purchase
  • Target Audience: Existing fleet operators
  • Loan Amount: Minimum 2 years of experience required
  • Collateral: 20% tangible collateral for loans over Rs 1 Cr

SBI Export Packing Credit

  • Objective: Supporting export-related expenses
  • Target Audience: Manufacturers and merchant exporters
  • Loan Amount: Variable based on export needs
  • Collateral: Margin based on exporter capability

SBI Lease Rental Discounting

  • Objective: Bridging liquidity gaps for leased properties
  • Target Audience: Property owners with leased premises
  • Loan Amount: Tied to property realizable value
  • Collateral: Ensures liquidity while maintaining property value

SBI Warehouse Receipt Financing

  • Objective: Backing for self-processing goods against receipts
  • Target Audience: Manufacturers and traders involved in self-processing
  • Loan Amount: Dependent on specific business needs
  • Collateral: Stocks against which receipts are issued serve as primary security.

SBI Pradhan Mantri Mudra Yojana (PMMY)

  • Categories:: Shishu, Kishor, and Tarun, catering to varying loan sizes.
  • Eligibility: Small businesses in manufacturing, trading, and services sectors, including allied agricultural activities.
  • Collateral: No collateral is required.
  • Loan Period: Up to 60 months repayment tenure.

SBI Stand-Up India Scheme

  • Target Group: Scheduled Caste (SC) and Scheduled Tribe (ST) entrepreneurs and women.
  • Objective: Encourages entrepreneurship and financial inclusion.
  • Collateral: No requirement of third-party guarantee or collateral.
  • Loan Amount: For setting up Greenfield projects in the trading, and services sectors.

SBI Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE)

  • Objective: Facilitates collateral-free credit for MSMEs.
  • Eligibility: New and existing MSMEs.
  • Collateral: No collateral requirement up to a certain loan limit.
  • Coverage: Loans up to Rs. 2 crores per borrower.

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SBI Loan for Women Entrepreneurs

  • Focus: Aids women entrepreneurs and promotes women-led businesses.
  • Eligibility: Businesswomen or women-led enterprises.
  • Interest Rates: Preferential rates of interest.

SBI Surya Shakti Business Loan for Solar Finance

  • Objective: Provide financial aid for SMEs and businesses to install solar rooftops or ground-mounted grid-connected systems.
  • Eligibility: Open to SMEs and business enterprises.
  • Collateral: Collateral requirements may apply.
  • Coverage: Avail Up to ₹4 Crores for 10 years

SBI Construction Equipment Loan

  • Objective: Support the purchase or lease of new or used construction equipment.
  • Eligibility: Criteria based on the lender's current policies.
  • Collateral: The equipment financed serves as collateral.
  • Coverage: Avail up to ₹100 Crores for the tenure of 4 years

SBI Corporate Loan

  • Objective: Provide financial aid to corporates for working capital, equipment purchase or upgrade, renovation, and debt repayment.
  • Eligibility: Criteria applicable to corporate entities.
  • Collateral: Collateral requirements may vary.
  • Coverage: Up to 10 years or the life of the asset under cover, whichever comes first.

SBI Business Loan under Contactless Lending Platform

  • Objective: Offer online lending through the PSB loan in 59 minutes platform for working capital or asset acquisition.
  • Eligibility: Open to proprietorships, partnerships, and public and private limited companies in the small and medium industrial and trading sector.
  • Collateral: Collateral requirements may apply.
  • Coverage: Varies based on the nature of the loan.

SBI PM Mudra Yojana Loan

  • Objective: Implement the government-backed scheme to provide affordable loans to businesses in manufacturing, trading, services, and allied agricultural activities.
  • Eligibility: Open to businesses in the specified sectors.
  • Collateral: Linked to MCLR
  • Coverage: Avail up to ₹10 Lakhs for a tenure of 3 - 5 years with a 6-month moratorium.

SBI Business Loan for Finance for Startups (MSME UDAAN)

  • Objective: Support MSME startups registered or recognized by DPIIT for various business development purposes.
  • Eligibility: Limited to MSME startups.
  • Collateral: Repayable on demand.
  • Coverage: Avail Up to ₹50 Crore for tenure up to 10 years with 3 years moratorium (term loan).

SBI SME Gold Loan

  • Objective: Allow businesses to procure a loan against their gold jewelry or ornaments.
  • Eligibility: Open to businesses with gold assets.
  • Collateral: Gold jewelry or ornaments.
  • Coverage: Avail above ₹1 Lakh - ₹50 Lakhs for tenure up to 1 year

SBI SME Car Loan

  • Objective: Provide financial assistance to small and medium enterprises for purchasing cars.
  • Eligibility: Open to SMEs.
  • Collateral Linked to CIC of borrowers.
  • Coverage Avail above ₹1 Lakh for: Up to 5 - 7 years

SBI Business Loan for Commercial Vehicles

  • Objective: Assist individuals or businesses in purchasing new or used commercial vehicles.
  • Eligibility: Open to individuals or businesses.
  • Collateral: Linked to EBLR
  • Coverage: Avail up to ₹50 Lakh for tenure of up to 7 years with a 6-month moratorium.

SBI Healthcare Business Loan

  • Objective: Provide financial assistance to businesses in the healthcare sector.
  • Eligibility: Open to businesses in the healthcare industry.
  • Collateral: Linked to EBLR or 6 months MCLR.
  • Coverage: Avail up to ₹20 Crore for tenure up to 10 years with a 1-year moratorium.

SBI SME Smart Score Business Loan

  • Objective: Enable MSME businesses to obtain financial assistance along with the purchase of fixed assets.
  • Eligibility: Open to MSMEs.
  • Collateral: Linked to EBLR.
  • Coverage: ₹10 Lakh - ₹50 Lakh up to 7 years with a 6-month moratorium.

SBI SME Credit Card

  • Objective: Enable MSMEs to meet their financial requirements.
  • Eligibility: Open to MSMEs.
  • Collateral: Linked to EBLR.
  • Coverage: Avail up to ₹10 Lakh for 7 years with a maximum 1-year moratorium.

SBI Business Loan for Finance to Food Processing Industry

  • Objective: Provide financial assistance to food processing businesses.
  • Eligibility: Open to businesses in the food processing industry.
  • Collateral: Varies based on loan amount.
  • Coverage: Avail Up to ₹50 Lakh at an interest rate of 9.00%

SBI SME Marble Plus Loan

  • Objective: Offer financial assistance to businesses in the manufacturing, processing, carving, and polishing of marble and other stones.
  • Eligibility: Open to businesses in the specified sectors.
  • Collateral: Linked to collateral coverage

Term Loan Vs SBI Working Capital Loan

While a Term Loan caters to specific capital expenses and long-term investments, an SBI Working Capital Loan addresses short-term operational needs with flexibility and adaptability. Here is the table below provides the distinctions between these major financial facilities.

Term Loan SBI Working Capital loan
For specific capital expenses like equipment purchase, facility expansion, or long-term investments Addresses short-term operational needs such as inventory, accounts payable, and cash flow.
Fixed term with structured repayment schedules. Revolving credit line with flexible usage.
May demand significant collateral or assets. Less stringent, leveraging current assets or receivables.
Predetermined, fixed, or variable rates based on market conditions. Applied to the borrowed amount, not the entire credit limit.
Suitable for long-term projects or asset acquisitions. Ideal for managing day-to-day expenses or addressing immediate working capital needs.

Steps to Apply For SBI Working Capital Loan

Here are the quick steps to apply for SBI Working capital Loan:

Step 1: Fill out the online loan application form with personal and business details, prepare the documents, and keep it handy.

Step 2: Provide essential documents such as KYC documents, proof of business ownership, income tax returns from the previous year, and financial statements, including profit-and-loss statements, along with balance sheets for the last two years.

Step 3: After you have submitted the documents representative will contact you after your application approval to collect and verify your documents and profile.

Step 4: Upon thorough verification of your application, the approved loan amount will be swiftly credited to your registered bank account.

Apply for a business loan now!

Frequently Asked Questions

SBI Working Capital Loan is a financial product designed to meet short-term operational needs of businesses, covering day-to-day expenses, inventory, and other immediate financial obligations.

Businesses can apply for an SBI Working Capital Loan by visiting an SBI branch, applying online through their website, or reaching out to the bank's relationship managers.

SBI Working Capital Loans can be used for managing cash flow, accounts payable, inventory, meeting day-to-day operational expenses, and addressing short-term financial needs.

The maximum loan amount for SBI's working capital financing is Rs. 20 Crores. However, in cities like Mumbai and Delhi, loans up to Rs. 30 Crores can be considered.

Interest rates are competitive, often linked to the Marginal Cost Based Lending Rate (MCLR) or Scheme Specific Rating. Repayment terms are flexible, depending on the nature of the loan and borrower's cash flows.

Yes, collateral is required. SBI generally requires collateral, often in the form of immovable property compliant under the SARFAESI Act.

SBI offers varied working capital financing options, including Drop-line Overdraft facility or Cash Credit, catering to diverse business requirements.

All business units engaged in manufacturing, services, wholesale/retail trade, and those covered under the MSMED Act 2006 can apply for SBI working capital financing.

Documents usually include KYC, business financial statements, income tax returns, proof of business existence, and details of collateral (if applicable).

Creditworthiness, including factors like business stability, financial health, credit history, and repayment capability, significantly influences loan approval and terms for working capital financing.

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