How To Avail Of A Business Loan For Women In 4 Easy Steps

We have all seen many women entrepreneurs in our lives, from the neighbourhood aunty who operates a beauty salon from her apartment or a graduate woman who is a home-based tutor. For many women, their entrepreneurial ambition is limited to working from home. Lack of capital is one of the biggest obstacles’ women had to tackle when they wanted to start a company. 

In lending business capital to women, old school lenders such as banks require collateral, a guarantor and have other requirements. But getting business loans for women today has become much simpler. The recent developments in fintech start-ups and non-banking financial companies (NBFCs) have enabled easy and quick access to business loans for women.

Here are some steps to avail of a business loan for women:

  • Choosing the Type of Loan

Small companies have several choices for financing, so choose carefully. Having a good business idea plays an important role, but it’s not the only prerequisite to have a successful business. The first step is to apply for a loan that suits your needs and priorities. Pick a suitable loan by carefully understanding the terms and conditions offered by different lenders. There are various types of loans, such as collateral-free loans, competitive interest rate loans, bank loans, etc. 

  • Fulfilling the Criteria for Qualifying

The basic eligibility for a small business loan for women is that they should either own the small or micro-enterprise as a whole or own at least 51% of the enterprise. The other eligibility requirements will vary from lender to lender, such as turnover, loan amount requested, cash flow, etc. 

  • Keep Your Documents Ready

Some of the essential documents are:

  1. Valid KYC documents such as PAN card, Aadhar, Voter’s ID, etc. 
  2. Proof of business organization such as partnership deed, certificate of incorporation, shops and establishment certificate, Articles of Association (AOA)
  3. Projected turnover and outcomes of the last year.
  4. Reports of tax filing (ITR), balance sheets, profit and loss reports, GST returns, audited and provisional financial statements, etc.
  • How to Submit an Application for A Business Loan for Women

There are different banks and lenders which provide women with small business loans. You can visit these bank or lender websites and apply online for a loan. The steps you normally must follow are:

  1. Apply by visiting the website for a business loan for women.
  2. Submit the application form and upload the documents required.

Benefits of Small Business Loan for Women

  • Easily accessible: These days, many leading banks and financial institutions provide small business loans for women to empower women entrepreneurs. 
  • Interest rate concession: Women who choose to use small business loans enjoy attractive rate concessions.
  • The quick repayments: The loan amount can be repaid in easy equated monthly instalments (EMIs) by women entrepreneurs availing of small business loans. However, most lenders do not provide flexible repayment options, therefore getting a loan from NBFC can be the right choice.

How NBFCs Play A Critical Role in Lending Small Business Loans?

Non-banking finance companies (NBFCs) have undergone a big transformation over the past few years. Today, they form an important element of India’s financial system. NBFCs play a critical role in the growth of infrastructure, transport, the generation of jobs, and changing the country’s business loan landscape. The lending conditions of NBFCs are somewhat relaxed as compared to banks. 

MSMEs don’t have to promise any collateral for the loan in certain situations. The whole process is swift and doesn’t consume much time. Many reputed NBFCs like Kinara Capital give special discounts on loans to women entrepreneurs. Kinara offers a discount with its  HerVikas scheme, which helps  businesswomen save on interest costs of the MSME loan. Check out their website and see if you are eligible today!

You may also like...