FRANCHISE

FINANCE
PRODUCT PROPOSITION
SBI is the pioneer financing
partner for SMEs

Indias largest bank

~ Rs. 23 lakh crore assets and
~ Rs. 13,000 crore profits

Widest reach with over

17,000 branches
Serving ~10 lakh
SMEs in India

Small business portfolio of

over Rs. 1.8 lakh crore
New product suite launched
for franchising tie-ups

Franchise Ecosystem Financing

Specialized suite of offerings

1 Working capital finance

Core
Offerings Franchise Ecosystem Financing
2 Capex financing

3 mPOS

4 Mobile wallet SBI Buddy

Other
5 Cash collection with current A/C
Offerings

6 Fleet finance

7 Vendor finance
Mutually beneficial arrangement
for franchisor-franchisee

Scale-up business rapidly and on-board more

franchisees

Tenure and repayment schedule

Benefits to Franchisor

customized for business cash flows

Dedicated relationship: single window

clearance at head office

Invoice-based online financing: e2e visibility of

franchisee operations

Transaction-related offerings: wallets, mPOS,

co-branded cards etc.

Minimum collateral and margin requirements

Benefits to Franchisee

Most competitive interest rates - lower than

standalone franchise funding

Dedicated relationship managers assigned for

all franchisees

Widest branch network of SBI with 17,000+

touchpoints
Capex finance:
Proposed features

Term Loan facility under SBI FeF

1 Product (Franchise Ecosystem Financing) scheme
Funding of 'Project Cost' setting
2 Purpose up/construction/renovation activity,
including franchisee fee
Leads to be pre-qualified by franchisor
3 Eligibility and recommended to SBI

4 Margin Minimum 30% brought in by franchisee

Interest rate: Base Rate + 2% to 3%

Product Repayment: 3-5 years based on business
5 cash flows
details
Moratorium period for store setup time

0.10% of the term loan subject to

6 Charges minimum of INR 5,000

Hypothecation of assets created out

of bank
Collateral: Minimum requirement of 25%
7 Security (land, building, investment or cash)
Guarantee: Personal Guarantee from
franchisee

1. Funding of setting up / construction/renovation activity of franchisees. This includes ceiling, Flooring,

layout, colouring, Air Conditioning, DG set, lighting, furniture, fixture etc.
 Working capital finance:
Proposed features
Cash Credit facility under SBI FeF
1 Product (Franchise Ecosystem Financing) scheme
100% invoice financing based on
2 Purpose projected sales
Leads to be pre-qualified by Franchisor
3 Eligibility and recommended to SBI

4
Amount Minimum and maximum: Based on
of facility business needs

Lowest Rate of Interest

Product (Base Rate + 0.30% to 0.80%)
5
details Credit period 30-60 days
(as per business cycle)

Provision of Grace period for repayment

6 Features
Provision of ad-hoc limit at no extra cost

Minimum unified charges for processing

7 Charges fee + inspection fee + EM charges

No financial recourse to or guarantee

from franchisor
100% hypothecation of stocks and
8 Security receivables financed
Collateral: Minimum requirement of 25%
(land, building, investment or cash)

1. Funding of setting up / construction/renovation activity of franchisees. This includes ceiling, Flooring,

layout, colouring, Air Conditioning, DG set, lighting, furniture, fixture etc.
Comfort from Franchisor
proposed by the bank

Mitigant
proposed Description

Franchisor to collect EMIs along with

Collection of
royalty payment
EMIs at source
Payment

Escrow account of SBI with franchisee

SBI owned Installation of SBI PoS terminals at all

PoS terminals financed outlets; auto deduction of
at outlets EMIs basis collections

Stop supply/ Stop further inventory supplies, and

withdraw support marketing/branding support in case
arrangement of default

Franchise
Share % of franchise fee with SBI in
fee sharing
case of default
arrangement

First right on SBI to have recourse on security

security deposit deposit with the franchisor in case of
Security

with franchisor a default

Assist franchisee in re-location or

Assistance to
takeover of the outlet by franchisor,
stressed franchisee
in case of unplanned outlet shutdown

Understanding for
Assist the bank in recovery and sale
asset recovery
of capital assets on best-effort basis
and sale

Personal
Personal guarantee to be provided
guarantee from
by franchisee
franchisee
 SBI has extensive expertise in
providing unique solutions to
support your partner network
Select credentials for franchisee
and dealer financing
Partner with SBI to grow
your business

Initial Tentative
discussion proposal

Initial meeting with Broad terms and

franchisor conditions of
arrangement shared
Understand franchise with franchisor
operating model and
finance requirements
 Product Sign MoU
customization

Franchisor to share Signing of MoU with

performance data franchisor

SBI to propose Franchisor to share

detailed terms and leads of franchisees
conditions of with SBI
customized financing
solution
Saloni Narayan
DGM Supply Chain Finance
State Bank of India
+91-22-22740550
dgmscfu.sme@sbi.co.in