The STAR scheme is all about SIDBI recognizing that using renewable energy is important for small businesses to save money on power and become more competitive. Thus, providing several benefits to businesses like yours. Let’s learn all about the STAR Scheme in this article.
What is the STAR Scheme?
The STAR program helps small businesses (MSMEs) lower their electricity costs by providing loans for installing rooftop solar panels.
Benefits of STAR Scheme
Businesses can get funding ranging from Rs. 10 lakhs to Rs. 350 lakhs under this SIDBI scheme.
STAR Scheme comes with great benefits like full financing, paying the supplier directly, and earning interest on a fixed deposit of 15%-25% of the loan amount.
In the Star Scheme, Businesses have 60 months to repay the loan, including a 6-12 month break before starting repayments.
Eligibility Criteria to apply for STAR Scheme
To be eligible for the STAR Scheme loan, you need to meet certain conditions:
- Show a cash profit in the last two financial years.
- New customers applying for the loan must have been in business for at least three years. On the other hand, existing customers are eligible with a minimum operational history of two years.
- A good repayment history.
- The Star scheme only funds on-site projects.
- The loan amount can be up to 25% of your NET Sales.
- Ensure that the solar rooftop capacity planned does not exceed the connected load.
- For new customers without CGTMSE Cover, a minimum IACR of 0.5% is required.
- Both standalone and grid-connected projects are eligible for coverage under this scheme.
Interest Rates
The SIDBI Term-Loan Assistance for Rooftop Solar PV Plants (STAR) scheme offers an interest rate ranging from only 9.10% to 10.20%.
Loan Duration and Moratorium Period in STAR Scheme
The repayment period for the loan in the STAR Scheme is determined based on the unit’s risk profile, cash flow, and project implementation schedule. SIDBI offers a tenure of up to 5 years including a moratorium of up to 6 months to eligible units.
Document Requirement to apply for STAR Scheme Online
- Income Tax Return Filing Proof of promoters, including IT assessment orders for the past 3 years.
- List of proposed and existing stakeholders, holding patterns with stakeholder names, etc.
- KYC Documents (for individuals).
- KYC proof of mortgagors and guarantors.
- Proof of address in case of any changes in the registered factories or office address.
- Annual accounts of the borrower units for the previous 3 years.
- Memorandum of Association of the borrower’s company, copy of registration certificate, along with the registration of firms and partnership deed (if registered).
- Annual accounts of associate concerns, corporations providing guarantees, and group companies.
- Income Tax Returns of guarantors, along with IT assessment orders for the last 3 years.
- Recent electricity bill and power sanction letter of existing units.
- Articles of Association (AOA) and Memorandum of Association (MOA) of corporations providing guarantees.
- Duly filled electronic application form and profitability projections.
- Copy of the approved building plan.
- Estimates from architects for civil works.
- Details of multiple banking arrangements – Annexure.
- Quotations for miscellaneous fixed assets, plant and equipment, and other project heads, etc.
What forms of collateral and margin are requisite for STAR Scheme?
It is mandatory to furnish a fixed deposit amounting to 15% to 25% of the financial assistance for this facility.
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If you need any more assistance regarding the STAR Scheme or have any other doubts, you can call our experts at: 8881-069-069 and get quick assistance.
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