How to Start a Cloud Kitchen and Secure Financing for It

Starting a cloud kitchen is a practical way to enter the food business with lower upfront costs than a traditional restaurant. You focus only on food preparation and delivery, without dine-in space. Success depends on choosing the right location, meeting food safety rules, managing costs, and arranging timely funding to support daily operations and growth.

Starting a cloud kitchen in India involves clear planning, compliance with food laws, and efficient operations. 

You can follow these steps to set up your business smoothly:

• Understand the Cloud Kitchen Model

Start by choosing the cloud kitchen model that suits your budget, operational capacity, and long-term goals. Common models include a single-brand kitchen, where you focus on one cuisine or food concept, and a multi-brand kitchen, where multiple food brands operate from the same kitchen to maximise utilisation and revenue. 

You can also run a delivery-only kitchen that relies entirely on food delivery platforms, without walk-in customers. Selecting the right model helps you control costs, streamline operations, and scale your business efficiently.

• Choose the Right Location

Select a location with affordable rent, good delivery access, and proximity to your target customers. Visibility is less important than logistics.

• Finalise Your Menu

Create a focused menu that travels well, has consistent demand, and allows efficient preparation. Avoid overly complex dishes initially.

• Set Up the Kitchen Infrastructure

Arrange cooking equipment, storage units, ventilation, and hygiene facilities as per food safety norms.

• Register Your Business

Register your cloud kitchen as a sole proprietorship, partnership, LLP, or private limited company based on your scale and plans.

• Tie Up With Delivery Platforms

Partner with food delivery platforms or set up your own delivery system to reach customers efficiently.

• Hire and Train Staff

Employ trained cooks and helpers who understand food safety, portion control, and consistent preparation.

• Plan Initial Funding

Estimate setup and working capital needs. Many entrepreneurs use business loans through financial marketplaces like Bajaj Markets to manage early expenses.

Before starting operations, a cloud kitchen must complete specific registrations and obtain licences to meet food safety, tax, and local compliance requirements. These approvals help ensure legal operations and smooth partnerships with delivery platforms.

The key registrations and licences include:

• FSSAI Registration or Licence

Every cloud kitchen must register with the Food Safety and Standards Authority of India. Small kitchens may require basic registration, while larger operations need a state or central licence based on turnover and scale.

• GST Registration

GST registration is required if your cloud kitchen crosses the prescribed turnover limit or supplies food through online delivery platforms. It also helps maintain proper tax compliance and invoicing.

• Shop and Establishment Registration

This registration allows you to legally operate a commercial kitchen and employ staff. It covers working hours, employee conditions, and basic workplace compliance.

• Trade Licence

Issued by the local municipal authority, a trade licence permits you to run a food-related business within city limits and ensures adherence to local civic rules.

• Fire Safety Clearance 

Kitchens using commercial gas connections, electrical equipment, or operating in shared buildings may require fire safety approval as per local fire department guidelines.

• Local Municipal Health Licence

Some states and municipal bodies mandate a health or hygiene licence to confirm that food preparation meets sanitation and public health standards.

Strong financial planning helps you manage costs, control cash flow, and scale operations without disruptions. A cloud kitchen requires both setup capital and ongoing working capital.

Here’s how you can get started:

• Budget Estimation

Calculate one-time setup costs such as equipment, licences, deposits, and branding, along with monthly expenses like rent, staff salaries, raw materials, and utilities.

• Cash Flow Management

Track daily inflows and outflows carefully, as cloud kitchens often operate on thin margins and delayed settlement cycles from delivery platforms.

• Working Capital Requirement

Maintain sufficient working capital to handle raw material purchases, platform commissions, staff wages, and packaging costs during slow periods.

• Business Loan Planning

Many cloud kitchen owners use business loans to fund equipment purchases, kitchen expansion, or marketing without straining cash reserves.

• Credit Readiness Check

Review your personal and business credit profile before applying for funding to improve approval chances and borrowing terms.

• Emergency Reserve

Keep a small reserve to manage unexpected costs such as equipment breakdowns, menu changes, or temporary order drops.

• Profit Reinvestment

Reinvest early profits into menu expansion, additional brands, or improved kitchen efficiency to support sustainable growth.

A business loan can help you manage both initial setup and ongoing expenses of a cloud kitchen without putting pressure on daily cash flow. Applying through Bajaj Markets gives you access to multiple lenders and flexible financing options suited for food businesses.

• Access to Adequate Loan Amounts

You can access funds to cover kitchen setup, equipment purchase, deposits, and early operational expenses, depending on your eligibility.

• Quick Disbursal of Funds

Once approved, funds are usually credited directly to your bank account, helping you start or expand operations without long delays.

• No Collateral Requirement

Most business loans for cloud kitchens are unsecured, meaning you do not need to pledge property or personal assets.

• Flexible Repayment Tenure

Repayment tenures can extend up to 96 months, allowing you to align EMIs with your monthly cash flow and order volumes.

• Transparent Fee Structure

Loan-related charges, such as processing fees and interest rates, are disclosed upfront, helping you plan finances clearly.

• Competitive Interest Rates

Interest rates are generally competitive and depend on your credit profile, business stability, and loan tenure.

• Convenient Online Application

The entire process, from application to approval, can be completed online, saving time and reducing paperwork.

A business loan can support multiple operational and growth-related needs of a cloud kitchen, especially during the early and expansion stages.

• Kitchen Equipment Purchase

Use funds to buy ovens, burners, refrigerators, exhaust systems, and food preparation tools required for daily operations.

• Setting Up or Upgrading Kitchen Space

Finance the cost of converting a home kitchen, renting a commercial kitchen, or upgrading to a higher-capacity setup.

• Working Capital Management

Manage recurring expenses such as raw materials, packaging, utilities, staff salaries, and platform commissions.

• Marketing and Brand Visibility

Invest in menu photography, digital promotions, discounts, and onboarding fees charged by food delivery platforms.

• Staff Hiring and Training

Cover costs related to hiring cooks and helpers, along with training for hygiene, food safety, and standardised preparation.

• Compliance and Licence Fees

Pay for FSSAI registration, GST compliance, trade licences, and other mandatory approvals.

• Business Expansion

Launch additional brands from the same kitchen, increase daily order capacity, or expand operations to new delivery zones.

Your credit profile plays an important role in determining loan approval, interest rates, and repayment terms. Lenders review both your personal credit score and, where applicable, your Company Credit Report (CCR).

A personal credit score is issued by credit bureaus and typically ranges from 300 to 900. A score above 750 indicates disciplined credit behaviour and timely repayments, making you a lower-risk borrower in the lender’s view.

For registered entities such as LLPs or private limited companies, lenders may also evaluate the Company Credit Report. The CCR reflects your business’s borrowing history, repayment track record, and overall credit exposure. Based on this data, a CIBIL Rank between 1 and 10 is assigned, with lower ranks indicating stronger creditworthiness.

Maintaining a healthy credit profile helps build lender confidence. Paying EMIs on time, avoiding excessive borrowing, and reviewing your credit reports regularly can improve both your personal score and business credit standing, making it easier to secure funding for your cloud kitchen.

Applying for a business loan is a simple and structured process. You can complete the application online by following these steps:

1. Click on the ‘Apply Now’ option available on this page
   

2. Enter your basic personal details and cloud kitchen business information in the online form
   

3. Specify the loan amount you need and select a suitable repayment tenure
   

4. Submit the application for verification and further processing

Once submitted, lenders review your details and contact you for the next steps, if required. The process is designed to save time and reduce paperwork through digital verification.