SIDBI’s Term Loan to Enhance Production of MSMEs (STEP) Scheme

The STEP scheme is a credit product offered by SIDBI aiming to support micro, small and medium enterprises by providing medium/short-term term loans for the purpose of augmenting production capacity, executing urgent confirmed orders, or enhancing net working capital. Your business can benefit under this scheme if you are an MSME looking to boost production, take up confirmed orders, or enhance working capital.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Support to both new and existing MSME units: The scheme allows eligible existing MSME units (as well as new units under certain conditions) to take term loans for production enhancement or executing confirmed orders.
Quick sanction / simplified documentation: One of the key attractions is that loans under STEP may be sanctioned rapidly (reports suggest within 2 days in certain cases) and have simpler documentation.
Substantial loan amounts available: For existing SIDBI customers the ceiling stated is up to ₹ 300 lakh, for new customers up to ₹ 200 lakh in certain versions of the scheme.
Term-loan structure including moratorium: Repayment period is up to 3 years including a moratorium of up to 6 months in the cited information.
Integration with MSME credit ecosystem: The scheme may allow cover under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for eligible borrowers, enhancing access.

Financial Assistance

Component	Assistance Provided	Detailed Explanation & Example
Loan amount (ceiling)	Up to ₹ 300 lakh for existing SIDBI customers; up to ₹ 200 lakh for new customers (in cited version)	Example: If your MSME (existing with SIDBI) requires ₹ 2.5 crore for producing new product lines, it may apply for up to ~₹ 3 crore (₹ 300 lakh) under STEP.
Repayment tenure	Up to ~ 3 years including moratorium of up to ~ 6 months	Example: Loan taken now for production expansion may have 6 months of no repayment, then 30 months of repayments.
Purpose of loan	Augmenting net working capital (NWC), executing urgent confirmed orders, production enhancement	Example: Your firm receives large confirmed export orders and needs capital to buy raw material – loan under STEP can finance that.
Simplified process / fees	No processing fee (in cited version) and simplified one-page application in some descriptions	Example: You apply via one-page application, standard KYC and check, minimal extra charges.

Eligibility Criteria

Who can apply:

Micro, Small & Medium Enterprises (MSMEs) registered under the Micro, Small & Medium Enterprises Development Act, 2006.
Existing MSMEs (for instance those already with SIDBI) with at least 2 years of operation; for new customers a minimum of 3 years of business operations may be required.
The enterprise should have been profit-making (micro enterprises: profit for past 2 years; existing SIDBI clients: profit for the past 1 year) and should not have been in default to any bank/FI.

Who cannot apply:

MSMEs that have defaulted to any bank or financial institution are disqualified.
Enterprises already availing a working capital overdraft/term loan facility beyond norms (for example where the scheme states “working capital term loan shall be provided only to those enterprises not availing certain facilities”) may be excluded.

Documents Required

MSME registration certificate (Udyam or earlier registration).
Financial statements of the enterprise (profit & loss, balance sheet) for at least the prior 1-2 years depending on eligibility.
Profitability certificate for the relevant period (2 years for new units, 1 year for existing SIDBI customers).
KYC of promoters/directors, business bank account statements.
Details of working capital requirement, urgent orders to be executed (if applying for order-execution component).
Credit history/CIBIL/CMR report of the enterprise and promoters.
Application form as per SIDBI requirement.
Any additional information/documentation as per SIDBI’s due-diligence checklist.

Application Process for the Scheme

Option 1: Apply with Bullit (Recommended)

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.

Recommended for: Lean teams. Designed to save you time and effort. Access expert help from start to finish.

Option 2: Direct Government Process via SIDBI

Visit SIDBI’s website and locate the STEP scheme; confirm your unit meets the eligibility criteria (MSME registration, business vintage, profitability etc.).
Prepare your application: describe the need (augmenting net working capital / executing orders), provide financial statements, profitability history, and KYC of your enterprise.
Submit application to SIDBI (either via its portal or branch). SIDBI carries out due-diligence, credit appraisal (CIBIL/CMR check, conventional credit norms).
On sanction, loan is disbursed; term and repayment schedule are set (up to 3 years inclusive of moratorium). Monitor usage as per scheme purpose.
Ensure compliance and repayment; failure may affect future eligibility.

Option 3: Via Bank / Financial Institution Referral
If you are a customer of a bank or NBFC, you may ask them to refer you to SIDBI for STEP loan if suitable. Your bank can help compile the application and facilitate SIDBI’s appraisal process