Running a small business is challenging. To keep things simple, most businesses are small. This means that businesses need to scale small. Besides, businesses like bakeries and cafes lend themselves to scaling small.
Bakeries and cafes can’t get loans from banks as they are small businesses. They have a loan option called kirana shop loan that can help them grow their business and stay afloat in case of emergencies. In this blog, we will tell you everything you need to know about kirana store loan that helps small business owners like bakers and cafe owners who run small-scale businesses access capital for working capital requirements or expansion.
What is Kirana Store/Shop Loan?
Kirana loan is a small business loan used by grocery shop owners to purchase goods, renovate shops, hire employees, buy storing equipment, etc. Initially, a loan amounting to 10-15 lakhs will be required for opening a store. Besides this, legal formalities such as shops & establishments registration, food license, entity registration and GST registration are also involved. Opening a kirana store can cost anywhere from Rs 10 lakh to 1 lakh depending on the size, location, and whether it is owned or rented. Therefore, it becomes important for businesses running kirana stores to have a sound business plan and good credit history before applying for a loan.
Features and Benefits of Kirana Shop/Store Loan
– Kirana shop loans are commonly known as small business loans. They provide small grocery businesses with access to capital to purchase goods, renovate their shops, hire employees, buy storing equipment and more.
– Benefits of kirana shop loans include the ability to grow your business faster than competitors and access to necessary registration and licenses.
– To be eligible for a business loan, your business must have been running for atov least one year and have a monthly total sales of at least ₹2,00,000. Business owners can select what items and brands to sell and procure goods either from a distributor or from a wholesaler.
– In addition to financing your business operations, kirana shop loans help you avoid overdrafts in your bank account by helping you save on credit card processing fees. Also, interest rates tend to be lower than those of bank loans or credit cards. Plus, business owners don’t need collateral or collateral documentation when taking out kirana shop loans.
– However, business owners should understand the terms and conditions of the loan before signing it to avoid any financial loss.
Eligibility Criteria of Machinery Loan
To apply for a loan of loan of loan of Rs 25 lakh or more, you will require eligibility criteria such as business vintage and turnover.
– For a loan of Rs 25 lakh or more, businesses with a business vintage of 2+ years are eligible to apply.
– The minimum annual turnover required is 10 lakhs as per the eligibility criteria mentioned above.
– No default history should be present in the loan application. Income tax filed during the last year should be more than Rs 1.5 lakhs.
– If a borrower owns either house or a business place, the loan amount would be approved easily.
Documents Required for Kirana Store Loans
– Aadhar card, bank statements, income tax returns, KYC documents are required to apply for a loan.
– A valid PAN card is required to be eligible for the loan.
– Most Kirana store loans are unsecured, meaning they do not require collateral to be eligible for a loan.
– An Indian citizen aged 21 years or above and a minimum annual turnover of Rs 1 lakh is required to apply for a loan.
– The borrower must have been in business for at least one year and have a good credit score to be eligible for the loan.
Cafe / Bakery Loans Fees & Interest Rates
Cafe / Bakery loans can be a great way for small businesses to obtain capital for working capital and long-term financing. These loans come with a range of benefits, including flexibility, interest rate fixation, and loan tenure of up to 10 years. The fees and interest rates can vary depending on the lender. Some business loans may have loan terms of three to five years while others extend credit for a maximum tenures. However, loan amount is usually in the range of Rs 25 lakh and Rs 50 lakh. Different industries have different loan options available, so it is important to research your options before making a decision.
How to Apply for Kirana Store Loan
Kirana loan is a business loan that can be used to finance various business activities such as buying goods, renovating shops, hiring new employees, and purchasing business assets like computers and other equipment. Most lenders have an online application process that requires Aadhaar card, bank statements, income tax returns, and KYC documents.
Registration and licenses such as Shops & Establishments Registration, Food License, Entity Registration, and GSTIN are required to open a Kirana store. Inventory must be managed by selecting items and brands to sell and procuring them from distributors or wholesalers. A business loan for a kirana store would be unsecured and do not require collateral.
Frequently Asked Questions
Kirana store loans are financial instruments that help businesses in the textile and apparel sector obtain capital for business expansion, operations, and investment. It is a flexible loan that can be used to finance a range of business activities including working capital, inventory purchases, new technology, and marketing costs. The loan can be repaid over a range of periods from a couple of months to several years. Besides, it is typically collateralized by the business’s assets such as inventory or receivables. The interest rate on kirana store loans are typically lower than other loans while some loans also have interest-only payment options. Besides, businesses often require investments such as working capital or inventories to get approved for kirana store loans.
What Is Working Capital Manage… >
Kirana store loans provide easy access to working capital, which can be used for various purposes. For example, working capital loan may be used to pay for business expenses such as rent, payroll, and advertising. A working capital loan may also be used to cover short-term financial gaps in a business such as for a few months when business operations are shut down for repairs. However, working capital loans should only be used to cover financial gaps and not as a long-term funding solution. These loans should be paid back quickly, usually within a few months or less. Instead, businesses often use them as a source of funding for a specific project or operation.
Benefits of Kirana Store Loans
Kirana store loans are ideal for businesses in the grocery segment, including small grocery stores, kirana shops, grocery chains, and retailer business. These loans offer several benefits to small businesses such as the ability to buy goods, renovate shops, buy a new agency, hire new employees, and purchase storage equipment.
Loan applications can be completed online in a few minutes and require documents such as Aadhaar card, bank statements, income tax returns, and KYC documents. The amount of investment needed to own a Kirana store depends on the desired scale and volume of business. A loan amount of up to Rs 20 lakh is available under MSME/SME finance scheme of the banks.
Shops & Establishments Registration (S&E), Food License (FL), Entity Registration (ER), and GST (GST) are some of the other formalities that need to be complied before getting a loan from a bank.
Easy access to capital
Kirana store loans provide small businesses with easy access to capital. These loans can be used for various business purposes, such as working capital, inventory financing, or business expansion. The application process for small business loan is usually straightforward and requires documentation such as an ID card, bank statements, income tax returns, and KYC documents. Most small business loans are unsecured, which means they do not require collateral to be approved. This makes them an ideal option for businesses looking for flexible loan options with minimal collateral requirements. By providing small businesses with access to needed capital, Kirana store loans can help businesses improve operations and grow their business.
Pay at your own pace
Kirana store loans offer flexible repayment terms that allow businesses to pay back their loan over a period of time that works best for them. They may be able to get an unsecured loan of up to Rs 25 lakh without collateral. There are no interest rates or prepayment penalties with Kirana store loans, so borrowers can afford to make small monthly payments without the fear of paying more in interest. These loans are ideal for small and medium businesses that have a stable business model and monthly sales of at rate than ₹2,00,000. With a CGTMSE loan, businesses can get collateral-free credit and term loans up to Rs 2 crore. This helps businesses access working capital as they grow and develop their business.
Low rate of interest
Kirana store loans typically have low interest rates compared to other business loans. Interest rates on Kirana store loans are usually very competitive, making them an attractive financial option for grocery businesses of all sizes. Borrowers must shop around to find the best loan rate available. Some lenders may offer lower interest rates, depending on a borrower’s credit score and other factors. Borrowers should be aware of any prepayment or late payment penalties that may be associated with their loan. If you are looking for a business loan that offers low interest rates and flexible repayment options, consider Kirana store loans for your small business financial needs.
Nil to minimum security disbursement
Kirana store loans are flexible unsecured loans offered by local banks and financial institutions. They are designed to help businesses with small loan needs of up to Rs 25 lakh. This loan type does not require collateral and is interest-free for a period of 1 month or longer. The eligibility criteria for kirana store loans include being an Indian citizen aged 21 or above, having a valid PAN card, minimum annual turnover of Rs 1 lakh, being in business for at least one year, and having a good credit score. These loans can be used for any purpose such as business expansion, purchasing new assets, or making quality investments. All you need to apply for kirana store loans is a business plan and some documentation to support your request.
How to Apply for Kirana Store Loans
The Kirana store loan is a great financial option for small and medium businesses. It can be applied for with an online application process. Documents such as Aadhar card, bank statements, income tax returns, and KYC documents are usually required for loan application.
After loan application, lenders will assess eligibility and offer terms and conditions. Once the loan is accepted, the loan amount will be disbursed to the borrower’s account within a few days. It is vital to ensure all legal formalities such as shops & establishments registration, food license, entity registration, and GST registration (if applicable) are fulfilled before applying for a loan. This loan option offers many business loans benefits such as flexible repayment terms, interest rate subsidy, and loan tenure of up to ten years.
Fees and Interest Rates for Kirana Store Loans
Kirana store loans are small loan facilities designed for businesses operating small retail establishments such as kirana stores. They come with a prepayment of interest facility and often have loan amounts ranging from Rs 10 lakh to Rs 25 lakh. Interest rates vary depending on the borrower’s creditworthiness, loan amount and repayment period. Most lenders have an online application process, which requires documents such as Aadhaar card, bank statements, income tax returns and KYC documents. In terms of fees and interest rates, you should expect to pay a loan processing fee of around 2.5%, interest rate of 10% per annum on loan amount, and a loan tenure of 15 years in most cases.
The benefits of taking a kirana store loan include the ability to buy goods, renovate shops, hire new employees and buy storing equipment. The loan amount is disbursed within a few days of the application being accepted so you can plan your business with ease.
Get Grocery Store Financing without any Hassle
-FlexiLoans provides financing options to grocery store owners without requiring collateral or security. These term loans and vendor financing products come without collateral and can be disbursed within two to three working days.
– Kirana store loan is a business loan that can be used for buying goods, renovation, hiring employees, buying equipment etc..
– HFS offers quick and easy pre-approved loans to help expand businesses faster. These loans are interest free and can be disbursed without collateral. All loan applications are processed within 48 hours.
– There are various loan plans in the market, but it’s essential to understand the loan structure and interest rate before applying for a loan.
If you have a business idea and want to invest in it, you can consider kirana store loan. It’s an interest free loan offered by banks that can help you expand your business fast. Get started with kirana store loan today!
Growing Your Grocery Business with Line of Credit Loans from FlexiLoans
If you are looking for a loan to start or expand your grocery store business, Flexi loans is the best option you can go for. The loan disbursal mechanism involves no collateral, security or guarantee from the bank, which makes it much easier to avail loan. This loan offers easy pre-approval and easy repayment options ranging from 12 to 36 months. Apart from this, the loan tenure can be extended up to 4 years if required. For example, if you avail a loan of Rs 1 lakh with a tenure of 18 months, you will have to pay interest rate of 8% per annum during the tenure.
Shop & store loan is also another option that allows small business owners to obtain funds easily and quickly. With Ziploan, you can take out loans of different tenor ranging from 12 to 36 months at an interest rate of 8% per annum. So, shop & store loan is a perfect solution for grocery store owners looking for financing options.
Eligibility Criteria for Kirana Store Loan
Eligibility criteria for Kirana store loans are generally the same as they are for other loan schemes such as loans from banks and NBFCs. Most of the loan eligibility criteria for Kirana store loans include a working capital loan of up to Rs. 1 lakh, turnover of over Rs. 1 lakh per annum, and a good credit score with a loan amount not exceeding Rs. 2 lakh.
The loan amount is determined by the interest rate, tenure, and tenure of loan agreement chosen by the borrower. However, eligibility criteria for kirana store loans may vary from lender to lender.
Most kirana store loans are collateral-free unlike bank loans or NBFC loans where loan amount is linked to assets such as land or business premises obtained as security against loan amount.
Documents Required & Basic Eligibility for Grocery Business Loan
Documents Required & Basic Eligibility for Kirana store loan
– Indian citizens aged 21 and above must provide valid PAN card, Aadhar card, bank statements, income tax returns, and KYC documents when applying for a loan.
– Good credit score and minimum annual turnover of Rs. 1 lakh is usually required for loan eligibility. However, a loan application can be considered even if the criteria isn’t met.
– Unsecured loans of up to Rs 25 lakh are available without collateral. MSME loans are given with interest rate of 14% to 15%. Banks offer affordable interest rates due to the loan’s low eligibility criteria.
Once the application is complete, lenders will assess the borrower’s eligibility and offer terms and conditions as per their discretion. This will depend on personal financial circumstances, business profile, and loan amount requested by the borrower.
Once an approved loan is received, the loan amount will be disbursed to the borrower’s account within a few days.
Frequently Asked Questions
What is the MSME/SME finance scheme?
The MSME/SME finance scheme is a small business loan scheme that is different from regular business loans. These loans are typically collateral-free and offered by various non-banking financial companies, Micro Finance Institutions, Regional Rural Banks and Small Finance Banks.
The classification of an MSME business is based on the capital investment size. The tenure of MSME loans and the rate of interest vary from lender to lender.
What are the benefits of applying for the MSME/SME finance scheme?
Applying for the MSME/SME finance scheme can be a great way for small businesses with short or no credit history to access capital quickly and easily. These loans are collateral-free, meaning that you don’t need to provide any security such as property or business assets in order to receive the loan. In addition, these loans come with low interest rates which make them very affordable. You can repay the loan through convenient monthly EMIs.
Furthermore, by applying for MSME/SME finance, you can build financial stability and run your business smoothly. This way, you’ll avoid any potential financial issues down the road and keep your business running smoothly.
What are some important factors to consider when applying for the MSME/SME finance scheme?
When applying for a business loan, it is important to keep in mind the eligibility criteria. It is also important to research different lenders and their interest rates to find the best deal for your business.
Some of the eligibility criteria for a business loan may include having no credit history, a small business capital investment size, and collateral-free loans. Loans are usually offered from non-banking financial companies such as NBFCs. NBFCs are better suited for businesses that do not have any collateral or credit history because they can offer loans at lower interest rates than other lenders.
What are the eligibility requirements for the MSME/SME finance scheme?
There are a few eligibility requirements for the MSME/SME finance scheme.
First and foremost, businesses must have no capital base larger than Rs. 25 crore to qualify for these loans from a non-banking financial company (NBFC). This means that small businesses don’t need to worry about having a large amount of collateral available as most loan providers will accept business owners’ personal assets as collateral.
The Indian government defines the Micro and Small businesses separately based on capital investment size. A business with a capital investment size of up to Rs. 5 crore is classified as a Micro business, while a business with capital investment size of more than Rs. 5 crore is classified as a Small business.
Additionally, businesses must meet certain eligibility criteria to be approved for a loan from a financial institution. These criteria include having a minimum turnover rate, being established for at least two years, and having a credit score above 50% (measured by the CASAscore system).
Once businesses have met all of these eligibility requirements, they can apply for a loan from a loan provider, such as an NBFC, MFIs, RRBs or SFBs. These lenders will then assess the business’s eligibility for the loan and determine the terms and conditions of the loan.
So, now that you know what a Kirana store loan is and its benefits, we hope you understand why grocery store owners are opting for this loan option. A business loan for kirana store owners is a perfect way to overcome cash crunch and stay afloat in the midst of an economic recession. It helps business owners strengthen their business and increase their earnings. Besides, it’s easier to get business loans for kirana stores as compared to other small businesses. However, there are many lenders who ensure that customers understand the loan eligibility criteria thoroughly before applying for a loan. Get your business funded today!