5 Types of Business Loans for Women Entrepreneurs in India
The whole start-up ecosystem of the country is booming, with an increased number of individuals kick-starting their entrepreneurial journeys. Women are following the trend and taking centre stage for innovative business ideas and executing them with success.
To follow the trend and encash the opportunity, several working women are now shifting from high-income job positions to entrepreneurial development and establishing successful businesses. Moreover, the availability of business loans for women entrepreneurs in India further fuels this growth. There are several types of business loans that women can avail to start, execute, and expand their businesses.
Here is a complete list of available loan options for women entrepreneurs in India.
Exploring 5 Business Loan Options Tailored for Women Entrepreneurs in India
Small Business Finance:
Small Business finances have affordable interest rates and are the ideal choice for the short term financial needs of women entrepreneurs. It can be a secured or unsecured type of funding.
While most such loans are limited to an existing business, some lenders offer these business loans to start-ups. For instance, one of the standard options for medium scale female entrepreneurs funding is a line of credit (LOC). The eligibility criteria for availing of such loans depend on the borrower’s age, income levels, and business financial position.
Business Loans:
Business loans can be availed up to 5,00,00,000 with repayment tenures of upto 60 months and at attractive interest rates. The whole process of applying for these loans is online and involves minimal documentation. Credible lenders provide collateral-free loans to women if they can fulfil the eligibility criteria.
These loans are suitable for instant loan sources for medium-sized businesses that aim to expand their operations. These are usually offered to businesses at least one year old and have valid business proof. It is crucial to check your eligibility to enhance your chances of getting the loan.
For instance, checking the net profit of your business after taxes is an integral part of the criteria. Apart from this, healthy credit history also plays a critical role.
Personal Loans:
Personal loans refer to a type of unsecured loan in which the borrower does not require to pledge securities against the loan amount. The eligibility criteria for these loans include the applicant’s e monthly income and credit scores. These are suitable for women entrepreneurs in need of instant funds. Several credible lenders enable applicant’s to apply for the loan online, with minimal documentation and affordable interest rates.
Loan Against Securities:
A loan against securities is a secured type loan with lower interest rates and minimum eligibility requirements for the borrower. These also have flexible repayment options and faster processing rates.
Such loans are suitable for small or home-based businesses. In such loans, the borrower can pledge the investments in the stock market, life insurance policies, or mutual funds and avail a loan against these investments. Lenders usually offer 60%-75% of the market value of the investment as a loan with this option.
Government Schemes:
Government schemes encourage women entrepreneurship by launching various finance incentives exclusively for entrepreneurs. The features of Government Schemes include low-interest rates and eligibility requirements, a variety of schemes to choose from, and flexible repayment tenures.
Pradhan Mantri Mudra Yojana is another popular business loan for women. It has three different loan options- Shishu, Kishor, and Tarun for start-ups and existing businesses planning to expand.
There is also a Women Enterprise Program or Mahila Udhyami Yojana, which helps women entrepreneurs get discounts on their business loan interest rate. Equipment Finance Scheme, Credit to Micro Enterprises, Mudra Card, and Refinance Schemes from financial institutions are other significant aspects of the Mudra Yojana which help in the growth of female entrepreneurs.
Conclusion
For a female entrepreneur, one of the most challenging aspects is to find sources of initial funding. With different loan options, women entrepreneurs can overcome this challenge and put a successful business together.
Loan applicants must consider various factors such as interest rates, repayment options, loan tenures and reputation of the lender before availing of a loan. Approach the most trusted lender to apply for a suitable business loan and achieve your entrepreneurial dreams.
