About this programme
SIDBI offers flexible working capital assistance programs to support MSME operations. STEP (SIDBI's Term Loan to Enhance Production) is a quick-disbursement working capital product designed to help MSMEs augment net working capital and execute urgent confirmed orders. Funds are disbursed within 2 days of approval.
A grant is financial support you don’t repay — awarded against eligibility and, usually, agreed milestones or utilisation of funds. The amount and form of support that actually apply to you depend on the programme’s rules and how your application is assessed — they are not fixed for every applicant.
It is aimed at businesses in msme operations. Like most government programmes, it has its own eligibility conditions, documentation and application window, and these terms are revised from time to time. Because of that, it is worth confirming the current eligibility, amount and deadline on the official programme page before you invest time in applying.
How it works
SIDBI provides working capital assistance in the form of term loans (not overdraft). The loan amount is based on the MSME's working capital requirement and operational metrics. Interest is calculated using MCLR (Marginal Cost of Funds Based Lending Rate) adjusted by internal rating. Repayment tenure is up to 3 years including 6 months moratorium.
Who can apply
Existing MSME units with minimum 3 years of business operation (2 years for SIDBI's existing customers); business must be in profit during the past 2 years (1 year for SIDBI customers); unit must not be availing working capital or overdraft from any bank or FI.
How to apply
- Contact nearest SIDBI branch or authorized bank partner
- Submit working capital requirement statement and financials
- Undergo SIDBI's assessment of working capital need
- Loan appraisal and approval (within 2 days for STEP)
- Agreement execution and fund disbursement
Documents you’ll typically need
- KYC documents
- Last 2 years audited financials/GST returns
- Business plan and working capital projection
- Bank statements (6–12 months)
- Proof of collateral/security
- No processing fee for MSME borrowers
The exact checklist depends on the programme and your specifics.
Frequently asked
How quickly is the STEP loan approved?
SIDBI processes STEP loan applications and disburses funds within 2 days of approval, making it one of the fastest working capital solutions.
What is the maximum working capital loan for new customers?
New customers can access up to ₹2 crore, while existing SIDBI customers can avail up to ₹3 crore.
Is processing fee charged?
SIDBI does not charge any processing fee to MSME borrowers under its working capital schemes.
What is the interest rate?
Interest is charged using the MCLR (Marginal Cost of Funds Based Lending Rate) plus an adjustment based on the borrower's internal rating assigned by SIDBI.
Reviewed July 2026. Government programmes change — confirm current eligibility, amounts and deadlines on the official programme page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.