written by | March 23, 2022

Expert Tips to Get Business Loan for Grocery Store

Are you passionate about entrepreneurship and got some scalding ideas in mind? You can see young people around you implementing their business plans, and some attain with a very low investment! Investment is the word that frightens most middle-class Indian people. You've got numerous options to consider, let it be a gym, tuition centre, grocery store, and whatnot. A small supermarket with modern-day facilities can be a great idea. But in most cases, if you're dreaming big, the investment will also be big only. 

So, if you're planning a small supermarket or even a grocery store, we're here to explain how you can avail funding through bank loans and what are the ins and outs of the same. However, let’s start by discussing a few facts about grocery store business loans. 

Did You Know?

The Indian government created the MSME business loan scheme as a working capital loan. You can acquire a loan sanction of up to ₹1 crore as an MSME in as little as 59 minutes. The best part is that you may receive this loan for an interest rate of 8%, making repayment simple.

How Can I Apply for a Grocery Store Business Loan?

Launching an entirely new venture always requires a big investment. It doesn't matter if it's a tiny shop, convenience store, or an entire supermarket, and a sum of investment is mandatory to grow and sustain the business or expand it. 

  • Application submission: The first step is to enter the professional and personal details into the bank's website to receive a loan.
  • Documentation:  Upload digital copies of your documents into the loan processing bank's server to start a verification process.
  • Sanction process: Your business loan approval will occur if you meet certain guidelines, and the bank will transfer the entire amount within three working days.

The most important subjects that will demand finance to set up the grocery store aside from the infrastructure are the following:

Collecting Working Capital

Whether big or small, every business needs enough working capital to operate without issues. The smooth flow of capital will ensure that the day-to-day operations and activities of the grocery store are not affected. It allows you to maximise the return on investment in your business. A grocery store loan in India lets one open their store and maintain their business without issue.

Cost of Inventory

Inventory is the main resource for all grocery stores, whether tiny or massive supermarkets. A large inventory allows the store to boost sales and improve profits, and it also helps the business be run efficiently. Business loans can assist in collecting inventory while establishing your grocery store.

Also Read: Things to know before you setup grocery store online

Help With the Hiring Process

Running a business isn't an easy job that a single person can't accomplish. It is important to recruit competent employees or people who can assist in taking care of shelves, assisting customers, coordinating accounts, etc. Paying the staff's salary during the beginning can be done by obtaining a loan to start a supermarket business.

Marketing Expenses

Marketing is a crucial aspect of any company, and it allows for more customers. Promoting the opening of a new grocery store isn't any exception. Therefore, one should spend a large amount of money on marketing when opening a grocery store. You can do it by giving out flyers, advertising in newspapers, or putting up a billboard.

Shop loans can be an all-in-one solution to the funding mentioned above needs. However, due to the multitude of business loans offered through financial institutions across India, picking the most suitable one could be difficult for business owners. So, do some research for sure.

What Are the Features of These Loans?

You can avail of grocery loans of up to ₹7.5 lacs, and if you're a small business owner, you can choose the loan quantum depending on your business outcomes. The loan dispersion process is nothing over three days, and your time is saved that way! 

  • The repayment tenure is 18-36 months, giving you enough time to plan the repayments. You can avail of grocery shop loans at very reasonable interest rates.
  • You can apply for a grocery shop loan from your home.
  •  Banks use the EMI loan calculator to determine an entrepreneur's reputation and credit history to decide the loan interest rates and contractual terms.
  • The Indian government has declared that entrepreneurs can clear the entire loan anytime without paying prepayment charges.

How Long Is the Loan Approval Time?

Once you enter your details and provide all documents, the loan approval process starts by tapping a button. Create an online account on a loan offering platform. You can apply for a loan straight away according to your financial information. The platform will give you a quote, and once you accept it, you can begin the final verification process by uploading documents. 

A few banks consume 8-10 days, but the most reputed ones hardly take anything over three days. Some loan platforms are very speedy, and under specific business loan schemes, you can even expect the loan approval process to occur within 60 minutes. When we talk about taking a loan to start a grocery business in India, the eligibility requirements are neither tough nor demand too much paperwork. You can even skip some non-necessary paperwork on the platform. It fastens the loan approval process even more. You may have to pay a 1-2% processing fee considering the principal amount.

Documentation Required for Grocery Store Business Loans

  • Registration proof of Business
  • Statement of Bank Accounts
  • Income tax return details of last two years
  • Aadhar Card
  • PAN Card

Some Considerations Before Availing Such Loans

Take note of these points before you begin a grocery store business:

1. Document Your Business Plan

No matter how big the company you plan to establish, let it be a small-sized grocery store or a huge modern-day supermarket, it is essential to develop an in-depth business plan. It means you can set time to relax and create a great strategy for the business of your grocery store that will serve as a reference for your company. A properly documented business plan will help you obtain a loan from banks and non-bank financial institutions. If your necessary skills, to begin with, aren’t sharp enough, hire an expert to help create a solid business plan. 

2. Register Your Business

In the beginning, you must be in line with your plan and start your business by registering it and obtaining all the necessary permits and permissions before you open your store doors for customers. It is vital to start your business by registering it and receiving your taxpayer's identification along with other data. It will allow you to operate in the region you decide to open your store.

3. Source for Goods, Commodities and Suppliers

You will need to get manufacturers and wholesale distributors of the products. The advantage of the grocery business is that you can stock your store with a variety of products. You can offer greater options to your customers. You must ensure that you don't have just one particular product brand. It's a good idea to immediately contact the manufacturer of the items you would like to stock in your grocery store.

Also Read: Step by Step guide on acquiring Kirana Store Licenses

4. Arrange and Organize Shelves to Organize and Store Your Items

There are various ways to arrange your store to ensure that the shelves at your grocery store appear attractive and appealing to customers. Make sure you organise and arrange your store in a way that will facilitate customers to shop. Besides that, your employees should find it easy to keep track of the inventory and know when to replenish it.

5. Employ Skilled Staff

A business at the supermarket is not something you can manage on your own. You'd require someone to work together. If you own the largest supermarket, you should hire enough staff who can assist you in managing your grocery store. It is essential to mention that any business requires reliable, skilled and honest workers. It becomes very important if you want to avoid unnecessary losses of cash. In general, you'll need at minimum a supervisor or cashier, as well as security personnel or saleswoman, according to the type of job.


So, how profitable is a Grocery Store Business?

Selling groceries has always served as a viable option in countries like India. A large portion of the middle-class population depends upon these grocery stores to fulfil day-to-day requirements. Undoubtedly, there's great earning potential.

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Q: How can I establish a grocery store?


By following the below steps, you can conveniently establish a grocery store.

  • Have a Business Plan
  • Choose a perfect location.
  • Understand your customers' requirements
  • Track your investments
  • Upgrade technology in your grocery store.
  • Get all required permits/licences.

Q: What profit margin can I expect from a grocery store?


In India, profit ranging between 2% – 20% is a grocery store, and it highly depends upon where you're buying your grocery stock.

Q: Do I need an FSSAI Licence to open a grocery store?


Yes,you can't run a grocery store in India without obtaining a Grocery Store food license.

Q: How profitable is a grocery store business?


Yes,the grocery store business can be very profitable when you own a shop at the right place where commercial activities take place the whole day long. In simple words, we call it the market area. So, availing of a Kirana store loan isn't a bad idea if you've got proper planning.

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