Moreover, it is essential to remember that one can take a business loan even after their business is established for goals like expansion, day to day workings, types of equipment, etc.
For now, let’s learn more about shop loans!
What are some features and benefits of a shop loan?
Accessibility and convenience:
Lenders offer different types of loan repayment options. Various financial lending institutions provide a customised repayment plan according to the cash flow of a certain business so that the business owners won’t have difficulty repaying. Business owners are also allowed to increase or decrease their monthly instalments as per their profitability.
According to the business requirements, businesses can avail a short-term or a long-term loan. As business loans are mostly unsecured loans, they are given for a shorter period of time. However, the loan term is usually between 12 months to 60 months.
Business owners have a lot of options available for loans based on their requirements. An overdraft facility is also available sometimes where the borrowers may overdraw their current accounts according to their terms and conditions. This flexibility makes it easier for small business owners to avail a loan for shop purchase and repay it as well.
How can you apply for a shop loan?
Usually, the process for any kind of business loan is more or less the same. However, some basic requirements change with the specific loan you avail. There are three fundamental steps that are required to get the application process started.
Fill out your application form –
Make sure to fill out your application form properly and carefully with all your personal, professional, and financial details on the form. Usually, once you fill out the form and enter the required information, a representative will reach out to you, make you understand the product you are interested in, inform you about any loan offers you might be eligible for and inform you about the applicable interest rates, repayment details, and the tenure of the loan.
Upload your documents –
If you are filling out your application form online then you will have to fill out the documents online as well. You can also check with the help of a business loan EMI calculator for the instalment you are committing to. This will help you understand if you can even afford to repay the amount or adjust the value of the principal amount accordingly.
Your loan disbursal –
If your loan application gets approved, your funds will get disbursed in your account within the next 24 hours. However, you might have to wait for three days for the amount to be reflected in your account.
Eligibility requirements for a shop loan
● You must be a citizen of India
● You must be self-employed
● You must be in between the age group of 26-66 years
● Your business must be in operation for at least 3 years
What are the documents required to get a shop loan?
There are some common documents that every lending institution ask for while availing a shop loan.
Below is the list –
● Completely filled application form with one passport size picture
● Identity proof of the applicant such as passport, PAN, Voter’s ID, driving license, etc.
● Proof of residence like ration card/leaser agreement/telephone bill/electricity bill/passport/sales tax certificate/trade license
● Proof of age like passport, photo PAN card, voter’s identity card
● Financial documents like IT returns of the last two years, latest bank statements of the last six months, and P&L and balance sheet of the last two years audited by a CA.
One can apply for a shop loan or even for a commercial shop loan to set up their business. Ensure a good credit score while applying for this loan as this signifies the timely repayment of loans. Make sure to do the necessary research and follow the required steps to avail a loan for shop purchase.