Shop Loan: Starting a shop or retail business demands handsome capital, especially if one is looking at long-term benefits. A good investment at the initial stage will boost the business to sustain itself in the competitive market and pay good dividends in the long run. Hence, a shop loan is the right choice to finance the investment.
Plenty of loan options are available in the market today to choose from as per your needs. What are the other benefits of availing a shop loan and schemes that will help you?
We are discussing here the top 5 Amazing benefits of a shop loan.
Flexibility and Customised to Needs
Lending institutions offer different repayment options to businesses. Based on their current requirements, business enterprises have different loan schemes. Small businesses can avail 10-50 lakhs easily. Some lending financial institutions even provide a customized repayment plan per the business structure and tailor-made solutions with high loan top-ups.
Also, the owner can regulate loan installments depending on the ability to pay at a particular installment period. In some months, he may pay a lesser or higher installment as he deems fit. This is very convenient for shop loans. Also, online account access allows one to manage a business loan account anytime from anywhere using any device.
Loan Tenure
The business loan facilities are flexible, with 1 to 5 years of repayment periods. As they are unsecured loans, they are generally offered for a short period. One can choose between short- and long-term loans.
No Collateral Required
To finance a small business, one doesn’t require to pledge any collateral when availing of a loan for a business. These loans meet the requirements and are very useful for retailers in business growth.
Interest Rates are competitive.
Loans for small businesses offered by most lending institutions have competitive attractive interest rates. They have nominal processing fees, and the interest rate depends on the type of business. Bank loans are preferable to shop loans over personal loans and other credit. Another advantage is that the interest rates for retail businesses are tax-deductible.
Complete control of your company
The significant advantage of a bank loan for the shop is that the owner commands complete control of the business availing cash flow which is not the case with large enterprises in the share market. Since a small business loan is a short-term measure, clearing off the loans ends the owner’s obligation to the bank. Also, there is no interference from lending banks and no obstruction in business as long as regularity in repayment installments is maintained.
This scheme provides loans for hawkers, vendors, makeshift retail shops, Thela-walls, etc., involved in the supply of goods and services in rural and urban areas. These are the benefits to these traders under this scheme.
Working Capital Loans
Loans of Up to Rs 10000 can be availed by urban street vendors with monthly installments for 1 year without collateral. Early or timely loan repayment makes the vendor eligible for the following loan with an increased limit.
Rate of Interest and Interest Subsidy
The rates of interest are low. Also, an interest subsidy of 7 % gets credited quarterly to the borrower’s account.
Incentive on Digital Transactions by Street Vendors
The cashback facility on digital payments is a good incentive for street vendors under this scheme. Vendors on board the scheme get a monthly cashback of 50-100.
The above 5 benefits and the benefits scheme are why shop loans are growing. Financing is essential for growth, and Bank loans are a smooth way to avail more funds without waiting for profit generation.
Earlier, availing bank loans for retail was difficult, but now Banks have identified the potential of microfinancing in India. Also, availing of a loan means starting the execution of business plans early with suitable infrastructures and equipment, gaining more valuable experience, and learning from market behavior. This will boost growth and strengthen the enterprise in the long term.