If you are a female entrepreneur seeking ways of getting a business loan, you've come to the right place. Here is comprehensive information on how women business owners can get business loans.
With the concept of women’s empowerment taking over the world, more and more women are taking the business industry by storm. Especially in the last few years, the female segment of our society has greatly impacted many businesses.
Many competent female entrepreneurs have developed brilliant business ideas comparable to men’s. These ideas need to be backed by adequate capital to expand into practical businesses. This is why the demand for business loans by women has also increased. Consequently, numerous banks and financial institutions have decided to offer business loans to women too.
The Basic Steps
Whether you are a start-up or an existing business, these are some of the basic steps you must follow to get a business loan as a woman:
- Conduct extensive research on all the banks and other loan facilities. From your list, pick out a loan institution whose terms and conditions best suit your criteria.
- Go to the loan service area of their website to find out more information on business loans. If the website is not available, visit the facility in person.
- Review the list of documents that are needed to apply for business loans. Confirm whether you are qualified for the business loan or not.
- If you meet all the loan requirements, fill out the physical or online application form.
- Submit the application form along with all the necessary documents mentioned on the form.
- All of your submitted details will be cross-verified by the loan institution. After verification, one of their employees will get in touch with you. They will ask you for more information if needed to proceed with the further steps.
- The loan manager will start a credit analysis after you give them the necessary information. They will send you a proposal letter according to your business strategy and overall financial plan. It will show you all the details related to the loan, for example, the amount of the loan, the tenure, the interest rate, and any potential fees associated with the lending process.
- After reading all the details carefully, you can show them your acceptance. This acceptance is usually in the form of your signature. Online loan facilities may use a different method for this purpose.
- Your loan is all set. You may get it in a day or a few in your bank account registered with the lender.
The Benefits of Getting a Business Loan for Women
Why must women get business loans when there are several other options for financial backing for start-ups? Well! This may depend upon one’s own choice, but usually, women prefer business loans for the following reasons:
The majority of loan institutions are experts in the finance industry. They consider your company’s value before deciding whether you should lend money. Suppose you have a strong and focused business strategy, an accurate sales estimate, and a good profile in the relevant market. In that case, you can focus on your business concept and less on borrowing money.
Business loans are usually flexible. Although they already meet different business needs, they can also be customised to match the individual needs of your business. For example, if you are a doctor trying to open your clinic or hospital, you might get a loan to buy all your medical equipment.
If you are a finely running business and have no loan defaults on your name, you may get a loan at low-interest rates depending on your credit history. For start-ups as well, it is easy to get a low-interest loan as long as you have a well-established business strategy.
Some institutions lend money to women without any collateral. If a woman entrepreneur completely fulfils the qualifying criteria of the lender, it may also be possible to get a loan without pledging any of her assets. If you are not qualified according to the requirements, you can ask your spouse or partner to become your co-applicant.
100% Own Profit
When investors own a company, the owner must divide all earnings with the investors. You will keep all the profits if you take out a company loan.
Business Loan Schemes for Business Women
There are various business loan schemes for women in India. Some of these are the following:
Schemes by Banks
Some banks offer female business loans individually, and some do so in collaboration with the government. They provide financial assistance to startups and existing companies to grow their businesses. A few of these schemes are:
- The Central Bank of India’s Cent Kalyani
- Bhartiya Mahila Bank’s (SBI) Shringaar and Annapurna Loan Schemes
- Canara Bank’s Synd Mahila Shakti
- Bank of Baroda’s (BOB) Shakti Scheme
Schemes by the Government
The government is also supporting young female entrepreneurs in opening new businesses and expanding existing ones. These schemes offer low-interest rates for women. Some of these schemes that are worth mentioning include:
- Annapurna Scheme
- Mudra Yojana Scheme
- Pradhan Mantri Rozgar Yojana
- Udyogini Scheme
- Mahila Udyam Nidhi Scheme
If a woman owns some government bonds, she can pledge them to get a business loan. In such a case, there are low-interest rates, and repayment options are also flexible. One can get as much as 75% of the bond value as a loan.
Online Business Loans
There are some online business loan facilities for women as well. These are good options if you want quick and hassle-free loans at the click of a finger. Some of these online loan services include:
- Capital First (from IDFC First Bank)
Loan on Gold
If none of the above options suits you, the last and easiest approach is to get your gold assets pledged in the bank. Since jewellery is merely a woman’s possession, what’s a better way to turn your unused jewellery into a backup for your business? Most of the time, the loan amount equals up to 90% of the gold’s worth.
You can use any of these ways to get a loan for your business as a woman. These are all easy ways to strengthen your business with financial support. If you want to know more about business loans for women, don’t forget to visit VakilSearch.