To help young and dynamic start-ups tide over unprecedented lockdown caused by COVID 19, SIDBI has announced COVID-19 Start-up Assistance Scheme (‘CSAS’). This scheme is aimed to provide assistance to innovative start-ups that have demonstrated ability to adapt to economic impact from Covid-19 and ensured its employees’ safety and financial stability.
Under this scheme, eligible start-ups can get a loan of up to Rs. 200 Mn. @ 12% interest repayable within 36 months.
This all sounds great until you review the eligibility criteria. There are 9 conditions defined. In my humble opinion, its very difficult for some start-up to check all 9 boxes. A few of our clients could fulfil 3–4 of the conditions, but not all.
I am afraid, this scheme’s budget may also be unutilised like a lot of others.
Read the full conditions here:
- Government defined startups which have received funding through Alternate Investment Fund registered with SEBI or by any VC/PE/Angel Fund investing in startups in India
- Startups with a minimum employee base of 50 employees. This may also include their foot soldiers
- Startups having FY 2019 and FY 2020 minimum turnover between INR 20 crore to INR 60 crore
- Startups should be EBITDA positive in December 2019. If not, they should be in a position to project positive EBITDA for the quarter ending June 2020.
- Startups should have been incorporated for less than 10 years
- Startups should have a positive net worth
- Startups should have demonstrated innovative measures for ensuring business continuity during the COVID-19 period
- Startups should have taken adequate measures and ensured employee safety and financial stability
- Promoter/founder of startup should have invested his own capital in the business
Startups under the below category are not eligible:
- Startups written off by AIFs
- Startups that are in stress other than the present Covid-19 (as recommended by their Fund Manager)
- Startups that do not have strong Intellectual Property or innovation
- Startups having working capital facilities with any bank
With such criteria, i doubt if the scheme will reach the real needy start-ups.
Feel free to counter or contribute.