BK & Co Auditors SalemBK & Co Auditors Salem

Specialist Advisor

Corporate & Compliance Consultant

Published on: Sep 16, 2026

Baroda SME Loan Pack

Bank of Baroda is the second-largest bank in India, surpassed only by the State Bank of India. It ranks among the big four banks in India, alongside State Bank of India, ICICI Bank, and Punjab National Bank. Bank of Baroda has a vast network of 5,326 branches across India and abroad. This article provides a detailed overview of the Baroda SME Loan Pack scheme.

Overview

The Baroda SME Loan Pack offers a single line of credit to Small and Medium Enterprises (SMEs) to fulfill their working capital or term loan requirements within an overall limit approved by the bank. Considering the nature of the business, cash flow, and current trends, the bank can sanction a mix of working capital (both fund-based and non-fund-based facilities) and term loans. For businesses aiming to capitalize on online marketplaces, understanding GST on e-commerce sellers can be crucial.

Eligibility

The Baroda SME Loan Pack is available to any MSME business with an annual sales turnover under Rs.150 crores. After the disbursement of funds under this scheme, the business must bank exclusively with Bank of Baroda. Both new and existing borrowers who wish to establish a sole banking arrangement with the bank are eligible for the scheme. To comply with government regulations, acquiring an FSSAI license might be necessary for businesses involved in food-related industries.

Amount of Loan

The maximum loan amount that can be sanctioned is Rs.5 crores or 4.5 times the borrower's tangible net worth as per the last audited Balance sheet, whichever is lower. Borrowers must maintain a margin of 25% of the limit sanctioned. The interest rate will depend on the borrower's credit rating. For companies revising their names for compliance or branding, the New Rule 33A process is essential.

Collateral Security

An exclusive charge on the business assets must be provided to Bank of Baroda. Additionally, personal guarantees from all promoter Directors/Partners are required. The bank may mandate a charge on unencumbered personal properties of the partners or promoter Directors, wherever applicable. If a medium-sized business with MSME registration seeks a credit line above Rs.100 lakhs, collateral is necessary to maintain an asset coverage ratio above 1.25. However, micro or small businesses with MSME registration can apply under the Credit Guarantee Fund Trust Scheme (CGTMSE) without collateral. For micro and small enterprises with a credit line above Rs.100 lakhs, a third-party guarantee must be provided.

Companies looking to optimize taxation may consider the benefits of revised Form 3CEAB for tax compliance. For efficient resource management, entrepreneurs might explore schemes like the North East BPO Promotion Scheme.

Other Considerations

For any amendments or restructuring of a company's framework, reviewing the Memorandum of Association might be beneficial. Enterprises planning on a proprietary business structure should ensure compliance, as detailed in our proprietorship compliance guide.

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Frequently Asked Questions

Common questions about SME Loans India.

The Baroda SME Loan Pack is a loan scheme offered by Bank of Baroda that provides a single line of credit to small and medium enterprises (SMEs) to meet their working capital or term loan requirements within an overall approved limit. It offers a mix of working capital (fund-based and non-fund-based) and term loan facilities based on the business's nature, cash flow, and trends.
Any MSME (Micro, Small, and Medium Enterprise) business having an annual sales turnover of less than Rs. 150 crores is eligible for the Baroda SME Loan Pack. Both new borrowers and existing borrowers of Bank of Baroda, who are willing to have a sole banking arrangement with the bank, can avail this loan scheme.
The maximum loan amount that can be sanctioned under the Baroda SME Loan Pack is Rs. 5 crores or 4.5 times the borrower's tangible net worth as per the last audited balance sheet, whichever is lower.
The borrower must maintain a margin of 25% of the limit sanctioned under the Baroda SME Loan Pack.
The interest rate on the borrowing under the Baroda SME Loan Pack is based on the credit rating of the borrower.
To avail the Baroda SME Loan Pack, the borrower must provide an exclusive charge on the assets of the business to Bank of Baroda. Additionally, personal guarantees of all promoter Directors/Partners are required, and the bank may mandate a charge on their unencumbered personal properties.
No, collateral security is not mandatory for all borrowers under the Baroda SME Loan Pack. Micro and small enterprises having MSME registration can apply for a loan under the Credit Guarantee Fund Trust Scheme (CGTMSE) without collateral. However, medium enterprises with MSME registration must provide collateral if the credit line exceeds Rs. 100 lakhs to maintain an asset coverage ratio above 1.25.
Yes, existing borrowers of Bank of Baroda who desire to have a sole banking arrangement with the bank are eligible for the Baroda SME Loan Pack.
Micro and small enterprises having a credit line above Rs. 100 lakhs under the Baroda SME Loan Pack must provide a third-party guarantee as additional security.
The article does not explicitly mention any restrictions on the sectors or industries eligible for the Baroda SME Loan Pack. As long as the business meets the eligibility criteria of being an MSME with an annual sales turnover of less than Rs. 150 crores, it can potentially avail this loan scheme from Bank of Baroda.