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A shop loan can get you the desired loan amount to expand your enterprise further, hire staff, restock, reorder, or renovate the shop. It is ideal for you to get financial support for this purpose and meet your business needs.

Features & Benefits of Shop Loan

  • Competitive Interest Rates: The interest rate on a loan depends upon your business, the loan amount you have applied for, and your past relationship with the bank. Currently, the rate of interest on shop loans starts at 12%. Most banks charge a minimum processing fee of 1% to 3% on business.

  • Loan Tenure: Generally, the loan tenure for this loan is between 12 months to 60 months. You can choose between short-term and long-term loans based on your business requirements.

  • Convenient Repayment Options: Lenders offer different loan repayment options. Some banks and financial institutions provide a customised repayment plan as per the business cash flows to avoid facing financial difficulties while servicing the loan. Owners can lower or increase monthly instalments as per the profitability or choose a bullet payment option to repay the loan amount.

  • No Collateral Required: When getting a business loan, you are not required to pledge any collateral to avail of the loan. For a small business start-up, these loans can help you meet your business requirements and grow your business.

  • Quick Disbursal: Once your loan is approved, you will receive the approved loan amount in your bank within a few days. Business loans enable businesses to grow unhindered.

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Eligibility for Shop Loan

To get a loan for a shop, you need to fulfil the eligibility criteria listed below:

  • You must be a citizen of India

  • You must be a self-employed individual

  • Self-employed individuals between 26 - 66 years are qualified

  • Businesses that are in operation for at least 3 years

Documents Required for a Shop Loan

Below we have provided a list of common documents required to get a loan to buy a shop. 

  • Complete the application form

  • Identity proof of the applicant such as Passport, PAN card, Voter's ID card, Driving licence, etc.

  • Proof of Residence such as Ration card/Telephone Bill/ Lease agreement/ Electricity Bill/ Passport/Trade licence /Sales Tax certificate

  • Proof of Age: Passport, Photo PAN card, Voter's identity card

  • Financial Documents such as IT return for the last two years, the latest Bank statements for 6 months, and P & L and balance sheet for the last two years audited by a C.A


Also, make sure you have a good credit score when applying for a shop loan with any bank or financial institution. 

FAQs on Shop Loan

Can I get a shop loan if I have a low credit score?

It will be far more challenging to get a shop loan if your credit score is low, but it is not impossible. However, the lenders can offer you a loan with less favourable terms, like a higher interest rate or limit on the loan amount. You might also need a co-applicant.

Can I use a business loan to cover all aspects of opening a shop?

Yes, funds can be used for various purposes, like lease payments, purchasing inventory, equipment, machinery, hiring staff and marketing.

What's the typical interest rate on shop loan?

The interest rate can range from 12% - 25% depending on your creditworthiness and is up to the lender’s discretion.

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