Working Capital Finance
SBI offers working capital finance to meet the entire range of short-term fund requirements that arise within a corporate's day-to-day operational cycle.
The SBI working capital loans can help your company in financing inventories, managing internal cash flows, supporting supply chains, funding production and marketing operations, providing cash support to business expansion and carrying current assets.
SBI's working finance products comprise a spectrum of funded and non-funded facilities ranging from cash credit to structured loans, to meet the different demands from all segments of industry, trade and the services sector. Funded facilities include cash credit, demand loan and bill discounting. Demand loans are considered also under the FCNR (B) scheme. Non-funded instruments comprise letters of credit (inland and overseas) as well as bank guarantees (performance and financial) to cover advance payments, bid bonds etc.
The SBI has formed a dedicated Project Finance Strategic Business Unit to assess credit proposals from and extend term loans for large industrial and infrastructure projects. Apart from this, project term loans for medium sized projects and smaller clients are delivered through the CAG and the NBG.
In general, project finance covers greenfield industrial projects, capacity expansion at existing manufacturing units, construction ventures or other infrastructure projects. Capital intensive business expansion and diversification as well as replacement of equipment may be financed through the project term loans.
Project finance is quite often channeled through special purpose vehicles and arranged against the future cash streams to emerge from the project.
The loans are approved on the basis of strong in-house appraisal of the cost and viability of the ventures as well as the credit standing of promoters.
Deffered Payment Gaurantees
Q. What is the SBI deferred payment guarantee?
SBI can extend deferred payment guarantees to industrial projects for obtaining imported equipment. The DPG is a standby credit guaranteeing deferred payments, usually for payments for capital goods, turnkey contracts etc.
Corporate Term Loan
The SBI corporate term loans can support your company in funding ongoing business expansion, repaying high cost debt, technology upgradation, R&D expenditure, leveraging specific cash streams that accrue into your company, implementing early retirement schemes and supplementing working capital.
Corporate term loans can be structured under the FCNR (B) scheme as well, with the option of switching the currency denomination at the end of interest periods. This will help you take advantage of global interest rate trends vis-a-vis domestic rates to minimize your debt cost.
The bank's corporate term loans are generally available for tenors from three to five years, synchronized with your specific needs.
SBI corporate term loans may carry fixed or floating rates, as befits the exact requirement of the client and the risk context. Again, these rates will be linked to the bank's prime lending rate.
SBI corporate term loans can have a bullet or periodic repayment schedule, as required by the client. The repayment mode may be linked to the cash accruals of the company.
The Bank's expert credit crew gauges the applicant's particular fund requirements and evaluates the company's credit worthiness, factoring in the cash flows generated by it.
SBI structured finance involves assembling unique credit configurations to meet the complex fund requirements of large industrial and infrastructure projects. Structured finance can be a combination of funded and non-funded facilities as well as other credit enhancement tools, lease contracts for instance, to fit the multi-layer financial requirements of large and long-gestation projects.
Q. What is the SBI advantage in structured finance?
Being India's largest bank and with the rich experience that it brings with it, SBI commands formidable expertise in engineering financial packages that address complex requirements with minimum risk.
Further, SBI has firm relationships across the financial map of the world, which can be leveraged to structure solutions that may necessitate the participation of several credit agencies.
SBI extends financial support to the corporate distribution networks, by providing both working capital finance and term loans to select dealers of identified companies. This gives dealers to leverage their business relationship with major corporates to avail low cost credit. Also, this type of financial solutions allows the corporate negotiate a better price with dealers. Dealer financing may be extended in the bill discounting form or simply as cash credit.
Channel financing is an innovative finance mechanism by which the bank meets the various fund necessities along your supply chain at the supplier's end itself, thus helping you sustain a seamless business flow along the arteries of the enterprise.
Channel finance ensures the immediate realization of sales proceeds for the SBI client's supplier, making it practically a cash sale. On the other hand, the corporate gets credit for a duration equaling the tenor of the loan, enabling smoother liquidity management.
SBI has the world's largest banking network of over 9,000 branches and this enables it to deliver the financial solution at your suppliers doorsteps, across the span of the country.
The SBI's has deployed a dedicated Strategic Business Unit for lease financing that is richly experienced in arranging lease contracts for procuring expensive equipment for your project or plant. At SBI, we arrange lease agreements as stand alone contracts or as part of a structured package.
The SBI leverages its vast network of relationships to arrange syndicated credit products for corporate clients and industrial projects.
With its rich experience and strong reputation, SBI's syndication desk can assemble large loan packages involving a ring of reputed financial entities, domestic and international, that match the large credit requirements of infrastructure projects.