How to get funds as a franchisor or to start a franchisee through SBI


Want to know how to apply for a loan to start a franchise in India? Eager to expand your business as a franchisor in India with financial backup? This article provides complete information about the unique features of the SBI franchisor-franchisee finance scheme and whom to contact to avail of the funds to set up a franchise or get on board franchisees for expanding your business.

India's largest bank State Bank of India (SBI) is providing a wonderful opportunity to take your business to the next level with franchisor-franchisee tie-ups through its Franchise Ecosystem Financing (FeF) scheme. There are two special offerings under this scheme, namely Working capital finance and Capex financing.

You can also avail of SBI dealer finance schemes for operating a petrol pump

Features of Working capital finance

  1. You can avail of cash credit facility, the purpose being 100% invoice financing based on projected sales.

  2. You are eligible for the finance when it is pre-qualified by a Franchisor and is recommended to SBI.

  3. Both the minimum and maximum amount of financing would depend on business requirements, with SBI providing an ad-hoc limit at no extra cost.

  4. Rate of in interest includes a base rate + 0.30% to 0.80%.

  5. The credit period will be 30 to 60 days, depending on the business cycle.

  6. You can avail of a grace period for repayment of the finance.

  7. Charges will be a fixed minimum charge towards processing fee. Additionally, there is an inspection fee and EM charges.

  8. The security will include: (i) Hypothecation of assets created out of bank and (ii) A collateral of the minimum requirement of 25%, which could be land, building, investment or cash.




Features of Capex finance

  1. You can avail of Term Loan facility, the purpose being funding towards the cost of the project. This includes setting up or construction or renovation activity, including the franchisee fee.

  2. You are eligible for the finance when it is pre-qualified by a Franchisor and is recommended to SBI.

  3. The margin will be a minimum 30% brought in by franchisee.

  4. The rate of interest is includes a base rate + 2% to 3%.

  5. You can repay the finance between three to five years as per business cash flows, with a moratorium period for store setup time.

  6. The charge is 0.10% of the term loan subject to minimum of Rs. 5,000/-.

  7. The security to be provided includes: (i) Hypothecation of assets created out of bank; (ii) A collateral of the minimum requirement of 25%, which could be land, building, investment or cash and (iii) Personal Guarantee from franchisee.


How the franchisor-franchisee tie-up will be set up

SBI will set up the initial meeting with a prospective franchisor so that you can get a first-hand understanding of the franchise operating model as well as what are the finance requirements expected.

Subsequently, the broad terms and conditions of the arrangement will be shared with the franchisor and the franchisor will be required to share performance data. On its part, SBI will make a proposition of the detailed terms and conditions for a customized financing solution which is agreeable to both sides.

Finally, you will sign up a Memorandum of Understanding (MoU) with the franchisor and the franchisor will share leads of franchisees with SBI.

Conclusion

As you can see, it is a win-win situation for both the franchisor and the franchisee.

As a franchisor, you get to expand your business with more franchisees. You will be provided a customized tenure and repayment plan and invoice-based online financing. Special facilities and services will also be offered, such as the SBI Buddy mobile wallet, mPOS facility, a special co-branded credit card, etc.

As a franchisee, too, you will benefit greatly, with low interest rates, low collateral requirements, finance provisions for a fleet of vehicles, etc.

How to apply

Interested in the SBI Franchise Ecosystem Financing (FeF) scheme? Don't miss out this superb opportunity to take advantage of SBI's expertise to support your partner network. Contact SBI right away!

Contact information

Saloni Narayan, DGM – Supply Chain Finance
State Bank of India
Ph: +91-22-22740550
Email: dgmscfu.sme@sbi.co.in
Website: https://corp.onlinesbi.com/corporate/sbi/sbi_home.html


Article by Vandana
Vandana is based in India with over 15 years experience as a freelance writer. Writing, no doubt, is her primary passion! Having learned the art of blogging from ISC, Vandana is enjoying the thrills of blogging, taking pleasure in sharing information & getting good pageviews at her various blogs.

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