A shop loan is a credit facility extended by the financial institutes to the shopkeepers. No matter to what type of business you belong, from a medical store, retail shop, and Kirana shop to a grocery store, your shop would require funds from time to time to run efficiently towards growth.
There are many best shop loan providers in India who offer loans at the best commercial shop loan interest rates. The small business loans for the shop can be very useful. They can be used in a number of ways. Let’s take a look at 4 different ways in which small business loans can be used by the shopkeepers.
With the funds availed under shop loan, you can invest in inventory. You can buy more inventory. You can buy more products – start selling a new product category. Something that is complementary to your already existing product line. For instance, if you sell mobile phones, you can add stocks of new sim cards. Or you can also start selling tampered glasses, mobile covers, accessories, etc. The customers these days prefer one-stop shopping – getting all their required products from one shop.
And with the customers getting all the products at one shop (your shop), they are more likely to turn your regular customers.
“You can’t sell anything if you can’t tell anything”
Marketing has turned an evitable aspect for every business! With a shop loan, you can invest in marketing. You can spend on different marketing strategies – SMS marketing, email marketing, word of mouth, advertisement, etc. You can also go for pamphlet distribution. In addition, you can also invest in hoardings for your shop.
You are suggested to choose the marketing strategy that best suits your target customers. Also, you must define the target audience and test your audience before choosing a marketing strategy and going forward with the investment. The last step, after adopting and completing the marketing strategy, you must also evaluate its efficiency and decide whether to continue with it or not.
In case you are working in your full capacity and earning good amount of profits, it’s the time for you to expand your business. The best way to expand the business is to have an online presence and affiliate your business with online aggregators.
Most businesses these days have an online presence. And you too can launch a website or mobile App for your business to make it easy for the customers to have access to your products. With an online presence, the demography for your business will also increase and so your customers. In addition, many businesses are also affiliating themselves with online aggregators, such as Zomato, Swiggy, and UrbanClap. You can also look forward to affiliate with them. A shop loan can be used for this purpose
Expand – Open at New Locations
The shop loan can also be used for expanding the business. Even if the business is making good profits, it is not always possible for it to take out a huge amount to finance expansion activities. It can affect the entire cash cycle of the business. Thus, a shop loan can be very beneficial for the expansion of the business.
Also, with the loan for the shop, you can buy a new shop or open at new locations. The next step after running a business successfully at one place is opening at a new location. You can take your business from regional to national level.
Things to Consider While availing a Loan for Shopkeeper
However, before availing a shop loan, you must consider a couple of things in order to ensure that you have made the right decision. The following are the most important considerations that you must make before availing a loan for shopkeeper:
- Loan Amount:This is the first consideration that you must make before availing a loan for the shopkeeper. A loan comes with interest cost and therefore, you must only avail amount you require. So, take all your requirements into account and then only decide the amount you need.
- Lender: The financial institute from whom you are availing a small business loan is important. Although the banks are the traditional and most trusted lenders, there is a shift towards the NBFCs and online lending companies. Many business owners these days prefer availing a loan for business from the NBFCs and online lenders.
- Eligibility: The business loan eligibility is, of course, an important consideration. After deciding the lender, you need to know his shop loan eligibility and check if you fulfill it or not. In case you don’t, then you are required to either work towards meeting the business loan eligibility criteria or looking for a new lender.
- Tenure: Your interest cost and EMI would depend on the loan repayment tenure. If you decrease the tenure, the interest cost would also decrease whereas the EMI would increase. And in case you increase the tenure, the interest cost would also increase and the EMI will decrease. You can use the shop loan calculator offered by the lender to choose the tenure and EMI that best suits your pocket.
There are many best small business loans offered by the lenders that you can choose from. You can search for the business loan requirements (documents and eligibility) and check the business loan calculator to choose the best lender and shop loan product. And now that know the best and various uses of shop loans, you can avail them and take your business forward.