Under the Equity Fund scheme, the SBI grants financial assistance to entrepreneurs who are not able to meet their share of equity fully, by way of interest-free loans repayable over a long period.
This type of assistance fills in the gap between the margin requirements in the project and the capital contributed by the promoter. The Equity Fund assistance can be normally repaid over 5 to 7 years after the moratorium period.
What are the eligibility criteria for the Equity Fund scheme?
The bank extends Equity Fund assistance only to new projects, which are also eligible for the SBI's Liberalized scheme and the Entrepreneur scheme. The project cost has to be more than Rs 25,000.
What type of security is required for the equity fund assistance?
Security available for other loans should be extended to cover equity assistance also.