Women have been at the frontline of new developments in India. Women’s entrepreneurship has a long history. They’ve carried on the legacy and carved a place for themselves in today’s business and corporate world too. However, to grow and develop their enterprises, they must acquire the appropriate finance at the right moment.
Small Business Loans for Women: Salient Features
- Interest Rate: Women borrowers receive discounted or concessional interest rates.
- Loan Amount: There is no minimum amount but a maximum amount. Up to Rs. 10 lakh, with the possibility of going above.
- Loan Type: Unsecured Loan, Term Loan (Short or Long Term), Overdraft, Working Capital Loan, etc
- Repayment Tenure: 12 months to 5 years
- Collateral/Security or Third-Party Guarantee: Not necessary
Eligibility Criteria
- Applicants should be at least 18 years old and no older than 65 years old.
- Individuals, MSMEs, sole proprietorships, partnership firms, and limited liability partnerships (LLPs) in the trading, manufacturing, and service industries are eligible.
- Annual Turnover: To be determined by the lending institution.
- Only applicants who have never defaulted on a loan will be evaluated.
Here are five effective strategies for women entrepreneurs in India to obtain business loans.
1. Small Business Finance
Women who run small businesses are becoming more prevalent across the country. As your company grows, you may need to look into alternative funding sources. You could discover that one of these loan alternatives is ideal for you.
Small business loans, also known as MSME loans, are a great way to get funding for your company.
- Loans can be term loans, working capital loans, or lines of credit for established firms with a good track record.
- There are secured and unsecured funding solutions available for both new and existing enterprises.
2. Government Loan Schemes
For female entrepreneurs, this is the next best alternative. These programs have low-interest rates. There are secured and unsecured loans available to meet your requirements. The government has several programs to help women entrepreneurs get the finance they need. A few of the most prevalent schemes are as follows:
- Pradhan Mantri Rozgar Yojana
- Bharatiya Mahila Bank Business Loan
- Udyogini Scheme
- Mudra Yojana Scheme
- Mahila Udyam Nidhi Scheme
- Annapurna Scheme
3. Instant Online Business Loans
This form of borrowing has become increasingly common in recent years. These are quick business loans that are approved depending on your credit score. The loan application is entirely online, and it is processed within 24 hours to provide you with the money you need. Many of them are unsecured loans with no collateral. They have large loan amounts as well as exorbitant interest rates. However, the repayment period is short, and if you are a skilled money manager, you may get a lot of value from these loans.
4. Loan against Government Bonds & Securities
You can receive a loan by pledging your stock market, mutual fund, or government bond investments in the bank. The interest rate is lower than other loan categories because these are secured loans. They also offer a faster response time and a variety of payment options. You can borrow nearly 75% of the value of the pledged securities.
5. Gold Loan
It may sound cliche, but who else is more eligible for a gold loan than Indian women? We don’t mind spending money on gold jewellery, so why not put it to good use in your business? In India, the gold loan industry is quite large, with over 4 lakh crore rupees flowing into the economy. In today’s market, gold loans come with relatively low-interest rates. Most gold loans include a single payment at the end of the year, together with the interest amount, so borrowers don’t have to worry about making monthly payments. As a loan, you can get up to 90% of the gold’s value.
Summary
Because of numerous government programs and policies, women entrepreneurs have a modest advantage in the loan market; nonetheless, women business owners should educate themselves and be aware of the best funding sources available.
Women who run small businesses are becoming more prevalent across the country. As your company grows, you may need to look into alternative ways of funding. You could discover that a business loan for women are ideal for you.
Krishna Murthy is the senior publisher at Trickyfinance. Krishna Murthy was one of the brilliant students during his college days. He completed his education in MBA (Master of Business Administration), and he is currently managing the all workload for sharing the best banking information over the internet. The main purpose of starting Tricky Finance is to provide all the precious information related to businesses and the banks to his readers.
