Business Loan in India for Grocery Store

Introduction

Local kirana and grocery stores are abundant in India, serving as the foundation of our communities. These stores depend on personal savings and often resort to taking out high-interest business loans from private lenders, as well as seeking financial assistance from friends and family, in order to sustain their operations and remain operational. In order to not be dependent on unreliable sources, the government of India provides its citizens with business loan related schemes.

Prominent Business Loan for Grocery Stores

The Mudra Yojana is open to any individuals, private businesses, sole proprietors, or any eligible business that has a requirement of a business loan up to Rupees 10,00,000 (Rupees Ten Lakhs). The interest rate on this scheme is one that is considerate to the nature of the business. It is also to be noted that the interest rate for this business loan may vary, depending upon the lending institution. You can consider and assess the business loan according to the needs of your business, which are as follows:

1. Shishu Loan- The Shishu Mudra Loan covers loans up to Rupees 50,000 (Rupees Fifty Thousand)
2. Kishore Loan- The Kishore Mudra Loan covers loans above Rupees 50,000 (Rupees Fifty Thousand) and up to Rupees 5,00,000 (Rupees Five Lakhs)
3. Tarun Loan- The Tarun Mudra Loan covers loans above Rupees 5,00,000 (Rupees Five Lakhs) and up to Rupees 10,00,000 (Rupees Ten Lakhs)

Applying for a Mudra Loan

Applying for the Mudra business loan is time-effective and easy to understand. The understated points serve as a general checklist for your documentation process.

1. Valid Photo Identification Proof
2. Current Address
3. Proof of Income
4. Bank Statement (up to 6 months)
5. Loan Application Form
6. Ownership- Proof of Residence/Office
7. Proof of Continuity of Business
8. Trade References
9. Minimum Age of Applicant (21 years of age and above)

For more information on the same, refer to the guidelines stated at

For the business loan app, you can refer to the four simple steps by the online business loan mode. Scroll below to learn more:

1. Visit the official Mudra Yojana website
2. Download the Application Form and fill in the details. Remember to keep all your documents ready.
3. You can then approach the bank of your preference, which will further assess and provide guidance on the steps further.
4. After the bank does its due diligence, your amount will be credited.

Further Processing of the Business Loan

Apply for the Business Loan

1. Fill out the application with the appropriate details
2. Attach necessary documents
3. Some lenders may interview the applicant
4. Await response

Factors that Influence Business Loan Eligibility

1. Business Plan – When applying for a business loan, it is crucial for businesses to present a comprehensive and well-structured business plan. This plan serves as the foundation for your business’s strategy and demonstrates to lenders that you have a clear vision and attainable goals. It should reflect your long-term vision and provide a roadmap for growth and success.
2. Documentation– Several business owners remain unaware of the necessary KYC (Know Your Customer) documents, which may differ from institutions that you may approach, which are required while applying for a business loan, along with the interest rates that the loan is being provided at. It is essential for all documents to be updated with the latest documentation. The documents may include Business PAN Card, Income Tax Return, Rent Agreement and Bank Statements. The presence of any conflicting records may act as a hindrance for the eligibility of the business loan. Be sure to get your documents in order.
3. Credit Score– To be eligible for a business loan, it is imperative to maintain a high CIBIL (Credit Information Bureau (India) Limited) score. This involves not only keeping well-maintained accounts but also demonstrating stability, consistent profit ratios, and potential for expansion. A strong credit score reassures lenders of your repayment ability and enhances your business’s reputation within the industry.

Loan Approval and Disbursement

Submitting the loan application on the website will be followed by a detailed examination of the documents provided, as well as credit history and business plan examination.

1. Loan Assessment: This process will consist of reviewing your business application, your credit background and your business plan.
2. Sanction Letter: You will get a sanction letter if your application has been granted including the loan amount, interest rate, tenure, and other stipulated conditions.
3. Loan Agreement: This should be followed by signing of the loan agreement after agreeing to the stipulated terms and conditions.
4. Fund Disbursement: It will be remitted in your business account for disbursement of the loan.

In conclusion, obtaining a business loan for a grocery store in India, offers a structured and accessible way for small businesses to secure funding. By referring to the given information, grocery store owners can successfully navigate and access the financial support needed to grow and sustain their operations.