If you are an aspiring entrepreneur or a small business owner looking forward to expanding your shop or a business but facing issues due to lack of funds. You can easily avail of a shop loan to meet your working capital requirements and expand your business. Leading financial institutions offer loans for shop purchase at attractive terms. But before applying for a shop loan to start a new business there are a few things you must know
Since the procedure for applying for a small business loan can be confusing and stressful. Before applying for a loan for shop purchase, keep these points mentioned below to make the process easier and less stressful for you:
- Have a clear reason for taking the loan: Before you apply for a loan for your shop, you must have it established for what purposes you’re going to be using it. Keep in mind whether you would be using the amount for leasing/buying a new shop, procuring new inventory, hiring new employees, etc.
- Conduct extensive research on the available options: There are a lot of financial institutions that offer loan to start a new business and that too at attractive rates today, go with the one that suits your needs the best, and allows you to get your desired loan amount at an affordable interest rate.
- Decide the loan tenor carefully: While going for a longer repayment tenor, you have to pay less amount as EMI, you end up paying a lot more as interest in the end, and in-case of short-term loans, the EMIs are higher. Therefore, do your research properly and choose the lenders that lets you have a better control on how you repay the loan amount.
- Develop a strong and attractive business plan: When developing your business plan, make sure to list past achievements, and future goals in a way that makes your business plan seem reliable and gives lenders confidence to lend you the loan amount.
- Keep all your financial statements and necessary documents prepared: Keep a statement of your business accounts, business license, proof of ownership ready so that lenders can go through to get an idea about your business and grant you a business loan quickly.
- Check your accounts: It’s very important that you calculate the operating costs of your business and the expected revenue so that you know how much time and money you will need to pay back the loan.
- Have a clear understanding about the prepayment terms: Financial institutions like banks may charge a prepayment fee in case you pay back the loan amount/installment before the due date. This amount is either charged on the entire loan amount or on the installment amount. Always opt to avail loan with a financial institution that doesn’t charge a high prepayment fee in case you want to pay back your loan amount before the due date.
- Learn the penalty charges: Running a business always comes with its risks, before availing of a loan, make sure you check the terms and conditions and learn about the penalty charges in case you fail to pay the loan amount within the due date. It is advisable to go for a loan with a low penalty charge.
When you keep these points in mind, you will find that there are a lot of financial institutions in the market that offer different types of loans for your business needs, choose the one that suits your business needs the best and achieve your business goals you have in mind.
Leading lenders like offers an unsecured business loan for shop purchase on simple terms and easy to fulfill eligibility criteria. For hassle-free processing, financial institutions like Bajaj Finserv offers pre-approved deals on their products such as business loan, personal loan and home loan. You can avail of these personalized deals just by giving your name and contact details.