All You Need to Know About Grocery Store Loans

Aug 20, 2020

India’s retail sector is one of the fastest-growing sectors in the economy. So much so that it has surpassed countries like China for having the most favourable market for retail expansion. Across the retail industry in the country, food and grocery account for the most revenue generated, thus contributing to 16% of the country’s GDP, as published by the Progressive Grocer India magazine .

In fact, as per a report published by the India Brand Equity Foundation, the food and grocery segment is expected to generate about 66% of the total revenue of India’s retail sector.

Under this scenario, opening a grocery store, small supermarkets in neighbourhoods or kirana stores in India can be a lucrative opportunity for small entrepreneurs. It is an avenue through which one can earn high returns, with a bright prospect for future growth.

Nonetheless, venturing into any business can be an extremely costly affair, with several other hurdles to get over. The easy availability of business loans for grocery stores in India has, however, eased the process of setting up this business to quite an extent.

Take a look to know how!

Common Challenges in Setting Up a Grocery Store in India

In India, the retail grocery market is dominated mostly by market stalls, kiranas, kiosks and specialist shops. However, in recent years, this sector has witnessed a shift to more organised structures, including the emergence of supermarkets and e-grocery shops.

With regards to the unorganised sector, some of the more pressing challenges that entrepreneurs can face while setting up a grocery store include –

  • Difficulty in inventory and supply chain management.
  • Lack of skill, knowledge, and training.
  • Issues with standardisation.
  • A shortage of capital.

On the other hand, while setting up a supermarket can be easier, it requires more investment in the initial stages.

However, availing a loan for supermarkets in India can considerably ease the process of raising capital to set up the business.

How Can Availing a Shop Loan Aid in Setting Up a Grocery Store?

It is common knowledge that venturing into a new business requires substantial investment. Whether it is a small shop, a convenience store or a supermarket, intensive capital is required to develop them into a fully functioning business.

Some of the principal areas of funding to set up a grocery store, apart from its infrastructure, include the following –

  • Gathering working capital

Every business, big or small, requires sufficient working capital to run without hiccups. Smooth inflow of working capital ensures that the daily activities and operations in the grocery store remain undeterred, allowing one to maximise on their business investment. A loan for grocery store in India allows one to not only set up their store but also keep their business running without a hitch.

  • Inventory cost

Inventory is the most important asset for any grocery store, be it a small kirana shop or a supermarket. Possessing ample inventory allows a store to increase sales, boost profit and enable the business to run smoothly. Availing a business loan can help gather inventory while setting up the grocery business.

  • Hiring help

Running a store can be an arduous task, which can seldom be managed alone. It is, thus, crucial to hire competent staff or workers who can assist with the tasks of stocking shelves, looking after customers, managing accounting, etc. Financing the staff’s salary in the initial days can also be completed with a loan for starting a supermarket.

  • Marketing costs

Marketing is an integral part of any business. It allows one to have a wider customer outreach. Advertising the launch of a grocery store is not any different. One should, thus, invest generously in means of marketing while starting their grocery store, be it by handing out flyers, putting up a newspaper ad or getting a billboard in the middle of the city.

Availing a shop loan can be a one-stop solution for the above mentioned funding requirements. However, with the plethora of business loans made available by financial institutions in India, choosing the best one can be challenging for entrepreneurs.

In this regard, you should learn about the merits of gold loan for grocery store in India. Following is an elaboration on how availing a gold loan can be beneficial in starting a grocery business or a supermarket.

Merits of Availing a Gold Loan to Start a Grocery Store

Gold holds a lot of unexplored potential when it comes to the lending sector in India. Even though it has been a popular medium of financial transactions for ages, the sector has only become more organised over the past few years.

With Rupeek Fintech Pvt. Ltd. making borrowing against gold hassle-free, it has become a noteworthy avenue for seeking loans to fund one’s business. In this regard, take a look at how availing a gold loan for business can be convenient for your grocery store venture.

  • Avail the loan at a high LTV (loan-to-value) 

A high LTV means you can raise high-value funds by pledging your gold and manage all investment requirements for your grocery shop conveniently. For example, an LTV of 65% on gold valued at Rs. 5 Lakh means fund availability of up to Rs. 3.25 Lakh. Conversely, an LTV of 80% gives you access to funds of up to Rs. 4 Lakh against the same value of gold.

Also, since it is a secured loan without end-use restriction, the advance can be utilised to fund any of the above-mentioned aspects of your business without any hassle.

  • Easily accessible

You don’t need to undergo a complicated application process with a gold loan when seeking how to get loan for supermarket. After applying through Rupeek’s app or website or by placing a call, a loan manager will reach your house on the appointed date and complete your KYC registration process. On registration, your gold will be valued, and after completing a few other formalities, the loan will be approved. On approval, the advance will be disbursed to your account within 30 minutes.

  • Flexible tenure

You can opt to avail the loan for tenure of 3 months or 6 months, depending on your repayment convenience. The tenure can also be extended for another 6 months if you opt to renew your loan.

  • Ease of repayment

Unlike other business loans, gold loans only require you to pay the interest amount on a monthly basis and offer the facility of bullet payment, thus, easing your financial burden to quite an extent. It allows you to avoid the consequences of defaulting on your EMIs for loan repayment.

With such benefits and more, a gold loan for grocery store in India from Rupeek Fintech Pvt. Ltd. is one of the most practical solutions to set up this business. Nonetheless, it is crucial to learn about the eligibility criteria to avail the loan before applying to ensure that the process is hassle-free.