SIDBI comes out in support of startups during COVID-19 by launching financial assistance
The COVID-19 pandemic has impacted the entire economy, and the startup ecosystem is no exception. The Small Industries Development Bank of India (SIDBI), the development financial institution helping out MSMEs, recognises the operational and financial challenges being faced by the startups and endeavours to provide financial assistance and stability via COVID-19 Startup Assistance Scheme ('CSAS').
This scheme will provide assistance to innovative startups that have demonstrated the ability to adapt to economic impact from COVID-19, and ensured the safety and financial stability of their employees.
The startup founders must go to the SIDBI site and fill up a form which asks the following:
- Cash and bank balance as on the date of the loan application, and cash runway for business sustainability based on estimated cash burn.
- Effects of COVID 19 on the business prospects of the company, and steps taken to meet these challenges
- Measures taken by the company to ensure employee safety and their financial stability
- Any existing investors willing to invest additional funds to manage the temporary liquidity crunch on account of COVID-19
- Any funding commitments from existing or new investors that have been withdrawn or deferred due to COVID-19
SIDBI also ask details of all receivables overdue for more than 90 days, or expected to cross 90 days. The startups also have to furnish full details of disputed liabilities of the enterprise towards statutory payments like income tax, GST, PF, if any, to be provided. The startups also need to provide details of arrears in statutory payments like income tax, GST, PF.
They have to also comment on CIBIL score and performance of founders and the company. Additionally, the founder has to show if there are any legal cases open relating to founders and the company. The founders have to given an undertaking that they have no borrowing arrangements for the unit. The founder has to show that there are no overdues, statutory dues, government enquiries, proceedings and prosecution against the promoters/directors/partners/proprietor.
They have to furnish details that none of their relatives is a Director in SIDBI, or any of the Scheduled Banks/FIs and/ or related to any Senior Officer(s) of SIDBI.
(Edited by Kanishk Singh)