• Posted on: 1 February 2016
  • By: admin

    Growth Capital and Equity Assistance Scheme provides assistance in form of Mezzanine/ Convertible Instruments, Subordinated debt and                     Equity in deserving cases.This quasi assistance has a higher moratorium on repayment and a flexible structuring.                                                          This is for existing Small and Medium Businesses in need of Capital for Growth

End Uses:

• Adequate capital to meet the growth aspirations of your business, but without diluting your ownership.
• Investments in Marketing, Brand Building, Creation of Distribution Network, Technical Know-how, R&D, Software Purchase, etc but the lenders you typically approach are not comfortable with such intangible assets.
• backing of your cash flows rather than Asset Cover/ Collateral Security. You would also like to have a longer initial moratorium on principal instalments to ensure greater chances of success for your ventures.

Key Benefits:

• Bridge the gap in means of finance for scaling up/ expansion/ modernization projects.
• Access long term structured assistance especially  for investments in intangible assets
• Leverage Equity / Sub Debt Assistance from SIDBI for raising higher debt funds.
• Avoid complexities of Enterprise Valuation, Exit Issues etc – associated with Equity Investments.

Security (in case of Debt based Instruments)

• Charge on available assets of the beneficiary unit and assets created out of SIDBI assistance
• Personal guarantee of the promoters
• CGTMSE Coverage, wherever applicable.

Eligibility

• An MSME as per the definition of Government of India (MSMED Act)  and 
• SIDBI’s existing customers (meeting internal rating criteria)
or
Units with past 3 years of profitability and 2 years of satisfactory banking credit track record (meeting internal credit rating criteria)
Acceptable external rating from CRISIL, ICRA, D&B, SMERA etc would be desirable.