Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs

SUPPORT

Menu  
 
Apply Now
Apply Now

Tata Capital > Blog > How to Get a Business Loan for Setting up a Restaurant in India?

Loan for Business

How to Get a Business Loan for Setting up a Restaurant in India?

How to Get a Business Loan for Setting up a Restaurant in India?

Food sure is the way to win hearts! Starting a restaurant or café, let alone successfully running one, opens a whole new game of juggling acts. Experiences go beyond the food to ambience, seating and much more that set the mood for cravings.

But, behind the charm of running a restaurant in India, owners often struggle with funding crunch. A problem usually answered by a convenient business loan for café.

Fortunately, there are innumerable loans at disposable for restaurateurs to build their culinary empire. Here we will list the types! But first, you will need to:

  • Establish the enterprise framework, decide the kind of funding you require and register your business. 
  • Devise a business plan to help investors decide. Therefore, it is advisable to sit with a professional and get your analyses and models right. 

Types of business loans for restaurants

Asset-based

These are long-term loans calculated using a business loan EMI calculator, particularly for equipment and property purposes.

Term-based

These loans offer large amounts of finances for longer tenures, typically for 1 to 10 years. They consolidate investment capital for enterprises.

Working capital

These offer sums for shorter terms, typically within a year for organisations. They fund everyday expenses met by businesses.

Government schemes

Government-run financial institutions like The Small Industries Development Bank of India (SIDBI) offers a competitive business loan interest rate. Nationalised banks also offer SME loans. CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) under the MSME (Micro Small and Medium Enterprise) – a government initiative, facilitates funds within hours.

To obtain a loan for opening a restaurant, you need to fill out an application and submit the following documents:

  • An Income Tax Return of the last three years
  • PAN card
  • ID/Address proofs
  • Other documents as required by the lending institution

Additional Read: How to Get a Small Business Loan from the Government

Business loan eligibility criteria

Guarantor

A guarantee is mostly necessary for loan approval. It helps the lender balance losses in cases of repayment failures.

Down-payment

A percentage of the total loan amount paid initially builds trust in the borrowing-lending relationship. Many institutions require entrepreneurs to fund a part of the project, with the rest backed by the loan.

Collaterals

Some lending institutions require an asset for security purposes. Until the loan amount is repaid entirely, hypothecations become mandatory. 

Additional Read: Need Collateral for Business Loan? Here Are Your Best Options

Experience and expertise

Ability attracts finances, especially when it is recognised. Borrowers must either demonstrate or hire the skills for running their restaurant business.

Credit rating of a borrower

Credit scores indicate the creditworthiness of the entrepreneur. Lending institutions require a minimum rating to issue the loan. It demonstrates repayment capacity and potential incomes along with current standing in the market. 

Final thoughts

It’s better to grab financial opportunities to start your restaurant business as soon as they come. That’s where Tata Capital pitches in- our minimal documentation processes and flexible business loan repayment features will ensure problem-free finance flows to your culinary business dreams.

Before applying for finance for your restaurant with us, you can also use our business loan EMI calculator to figure out your potential monthly instalments.

So, get ready to find your muse with us today!

Apply Now

Give Your Business the Right Boost: Apply for a Business Loan Today

Apply now
Popular Searches
business idea udyogini scheme hsn code full form low investment business ideas top 10 most successful businesses to start transport business import export business in india mineral water plant cost collateral free loans
More About Loans
business loan msme loans gst interest calculator business loan for women small business loans business loan prepayment business loan calculator business loan interest rates business loan documents od limit for business od interest rate loan foreclosure calculator
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools