What Types of Shop Loans are Available?

Shop loans are usually designed to meet the financial needs of shop owners for various purposes like expansion, inventory, or equipment upgrades. Below are the common types of shop loans typically available:

• Working Capital Loans: They help shop owners pay for day-to-day operational costs like inventory, salaries, or bills. These are short-term, usually for less than one year.
• Business Expansion Loans: They are typically designed to fund renovations, open new shops, or fund other growth initiatives. Depending on the project, they are usually medium to long-term.
• Equipment Financing: They usually help shop owners buy or upgrade machines, fridges, billing systems, etc. Typically, these loans use the equipment as collateral.
• Secured Shop Loans: They typically use property or other assets as collateral for larger loan amounts over longer loan tenures. Interest rates are typically lower.
• Unsecured Shop Loans: They do not require collateral. They are suitable for small shops but with lower loan amounts and slightly higher interest rates.
• Term Loans: They provide funding for major investments like setting up a new shop or for buying commercial property. They typically have fixed repayment instalments spread over defined periods.
• Overdraft Facilities: They allow shop owners to withdraw beyond a set limit to manage cash flow ups and downs. They are usually linked to a business’s current account.