SBI Loan for Restaurants

State Bank of India (SBI) offers a specialised loan scheme to fund existing restaurants and startup of restaurants. State Bank of India offers a wide range of financial products and services for SMEs in India. With a network of over 579 specialized SME branches across the country, SBI has kept a special focus to develop an effective platform for SME lending. Further, single point contact through dedicated relationship managers have been put in place for medium as well as small enterprises. A Centralized Processing Cells (CPC) has also been created for quick turnaround time in sanction & disbursal for loans upto Rs 1 crore.

Restaurant Business in India

The restaurant industry in India is projected to grow to over Rs.4.08 lakh crores by 2018 at an annualised growth rate of 11% by the

National Restaurant Association of India (NRAI). Majority of the restaurants (74%) are setup as Quick Service Restaurants (QSR) and Casual Dine-in formats, Cafés make up for 12%, while Fine Dining and Pub Bars Club & Lounges (PBCL) comprising the rest. Out of the total industry, chain and licensed restaurants are expected to contribute only about Rs.24600 to Rs.25000, leaving plenty of opportunity for Entrepreneurs to establish very good standalone restaurants.

Starting a Restaurant in India

There are various factors that must be considered while starting a restaurant like location, branding, staffing, equipment, model, investment, funding, etc., Capital expenditure of over Rs.50 lakhs would be required for setting up a small restaurant with nearly 80% of the capital expenditure being made towards interior and kitchen equipment. A mix of loan and promoter equity can be used for funding the capital expenditure. Know more about

procedure for starting a restaurant in India.

Loan for Restaurant

SBI provides loan for starting up of restaurants or fast food chains or cafes. Loan for restaurant can be availed by individuals, partnership firms, private limited companies, limited companies and trusts. Loan under this scheme can be used for purchase of kitchen equipments, investment in interiors, purchase of furniture and fixtures and purchase of land and construction of buildings.

Amount of Loan

Loan for restaurants can be sanctioned as a term loan or overdraft facility for funding operational requirements. A margin of 25% must be contributed by the promoter towards the loan. Interest for loan is floating linked to the base rate of the bank. Loan for restaurants is sanctioned with a repayment period of upto 7 years when land and building financing is included in loan. In case of financing only for interior or kitchen equipment, the loan is sanctioned with a repayment period of 5 years.

Collateral Security

All the assets created out of bank finance must be hypothecated or pledged to the bank. In addition to primary security, collateral security in the form of immovable property or bank deposits may also be requested on a case to case basis. Personal guarantee of the proprietors, partners or directors would be required on all cases. Loan for restaurants can also be sanctioned without collateral under the CGTMSE scheme. SBI loan for restaurants of upto Rs.25 lacs are to be covered under

CGTMSE scheme. Eligible loans above Rs.25 lacs upto Rs.1 crore can be covered underCGTMSE guarantee scheme.

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Frequently Asked Questions

Common questions about SBI Restaurant Loans in India: Business Financing Solutions.

SBI provides loans for starting up restaurants, fast food chains, or cafes. The loan can be availed by individuals, partnership firms, private limited companies, limited companies, and trusts.

The loan amount can be used for purchasing kitchen equipment, investing in interiors, purchasing furniture and fixtures, and acquiring land and constructing buildings for the restaurant.

The article does not specify a maximum loan amount. However, it mentions that loans up to Rs. 1 crore can be processed through the Centralized Processing Cells (CPC) for quicker turnaround time.

A margin of 25% must be contributed by the promoter towards the loan amount.

The interest rate for a loan for a restaurant is floating and linked to the base rate of the bank.

The repayment period for a loan for a restaurant is up to 7 years when the loan includes financing for land and building. If the loan is only for interior or kitchen equipment, the repayment period is 5 years.

All assets created out of the bank finance must be hypothecated or pledged to the bank. Additionally, collateral security in the form of immovable property or bank deposits may also be requested on a case-to-case basis.

Yes, personal guarantees of the proprietors, partners, or directors are required in all cases for a loan for a restaurant.

Yes, loans for restaurants up to Rs. 25 lacs can be sanctioned without collateral under the CGTMSE (Credit Guarantee Trust for Micro and Small Enterprises) scheme. Loans above Rs. 25 lacs up to Rs. 1 crore can also be covered under the CGTMSE guarantee scheme.

According to the National Restaurant Association of India (NRAI), the restaurant industry in India is projected to grow at an annualized growth rate of 11% to over Rs. 4.08 lakh crores by 2018.