Shop Loan

If you are thinking of opening up a retail business, you will probably be looking into getting a shop loan to set up your shop. With the help of a business loan, you get the desired loan amount to suit your needs at affordable interest rates. With the loan amount, you can meet your different financial needs, such as furnishing a shop, buying new machinery or equipment, or increasing your business's working capital. Suppose you are already an established business looking to expand your enterprise further or need some funds for restocking or reordering. In that case, a shop loan can get the financial support your business needs.

Features & Benefits of Shop Loan

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

Flexibility: An overdraft facility whereby borrowers may overdraw the current accounts as per the agreed terms and conditions. Business owners have numerous options available for loans based on their current requirements. The flexibility makes it easier for borrowers to avail a loan for the business facility.

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

Loan Tenure: Business loans are unsecured loans this means it is given for a shorter period. 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.

Competitive Interest Rates: Most banks, NBFCs, and other lending companies offer loans for businesses at competitive interest rates. Small and medium businesses can avail of these loans in India at attractive interest rates, nominal processing fees, with absolutely no hidden charges. The interest rate on 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 13.50%. Most banks charge a minimum processing fee of 2% to 3% on business loans.

Eligibility for Shop Loan

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

• You must be a citizen of India to be eligible for a loan.

• You must be a self-employed individual to be eligible for the loan.

• Self-employed individuals between 26 - 66 years are qualified and can apply for a loan.

• Businesses that are in operations for at least 3 years are considered eligible.

Shop Loan Interest Rates & Charges

Documents Required for a Shop Loan

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

• Complete business loan application form with one passport size photograph.

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

• Proof of Residence such as Ration card/Telephone Bill/ Lease agreement/ Electricity Bill/ Passport/Trade license /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.

List of Documents for Self-employed Individuals - Professional

• Proof of Identity of Sole Proprietorship.

• PAN card/ IT return documents of the borrower or Municipal tax, Water, Electricity bill in the applicant's name.

• Sole Proprietor proof of identity such as passport, driving license, Voter's identity card, PAN Card.

• Proof of residence for the Sole Proprietor such as Driving license, Passport, Voter's ID.

List of Documents for Self-employed Individuals- Non Professionals

• Proof of identity of the sole proprietorship.

• Three years of income tax returns.

• Three years of sales tax return documents.

• A copy of periodic stock and creditors' statements for the last three months.

• Bank statement of the last 6 months of the applicant.

Also, make sure you have a good credit score when applying for a shop loan with any bank or financial institution. An individual's credit score information is essential, and a good CIBIL score signifies timely payment of all the loans. Several factors can affect the CIBIL Score, and a low Credit Score can mean rejection of your loan application. Even if your application gets approved, you may be charged a high-interest rate on the loan amount.

To manage your financial needs, Finserv MARKETS offers business loans at attractive rates of interest. You can avail of a business loan of up to Rs. 30 Lakhs. You can use the funds to purchase a shop, expand operations, upgrade to the latest plant and machinery, maintain inventory, etc. Apply for a business loan online with the Finserv MARKETS app and avail of pre-approved offers for an instant loan without security.