The Indian economy is undergoing a major transformation due to a more favourable environment for entrepreneurship. Many individuals don’t hesitate to ditch their jobs and take up entrepreneurial roles. An increasing number of women are also becoming entrepreneurs, flourishing the country’s SME sector and bringing a positive change in society. Regarding finance for their initiatives, the government and financial institutions offer Business Loans for women that let them show their business acumen and creative abilities.
Those female entrepreneurs who are operating a business successfully but need finance to launch a new product or expand their presence can get a Loan for women.
Benefits of Business Loans for Women
Let’s look at the benefits of a small Business Loan for women:
- Easy Accessibility: Top lending institutions like Hero FinCorp encourage female entrepreneurs by offering them small Business Loans. These loans are accessible online with simple eligibility criteria and minimal documentation requirements. Aspiring borrowers can apply for the required finance on the lender’s website from the comfort of their homes.
- No Collateral Requirement: Many female entrepreneurs may not have an asset to pledge as collateral against a loan. Even if they have, they may not want to risk it. Collateral-free Business Loans make finance available without collateral, security, or guarantor.
- Discounted Interest Rates: Women entrepreneurs may compare various loan plans to get the best interest rates. Moreover, they may obtain a loan under a government scheme to get extra subsidies and tax exemptions.
- Easy Repayment: Female business owners who take out SME loans can repay the loan in easy EMIs spread across a convenient repayment term. An EMI calculator helps them choose a plan with budget-friendly instalments.
- Business Growth: SME loans encourage female entrepreneurs to operate and expand their businesses with adequate funds and no end-use restrictions.
Business Loans Under Various Government Schemes
Here’s a look at various government schemes meant to provide financial support to female entrepreneurs in India:
- Cent Kalyani Scheme: The scheme is meant for businesswomen who want to start or expand their business in the services and manufacturing sectors. These loans are offered in the form of cash credit, letter of guarantee, letter of credit, or overdraft and do not require any collateral or guarantor. These loans up to Rs 1 Crore require no processing charges and offer optional comprehensive insurance for stocks, machinery equipment, etc.
- Mahila Udyam Nidhi Scheme: The Small Industries Development Bank of India (SIDBI) and Punjab National Bank offer loans under the scheme for the purchase and setup of beauty parlours, auto rickshaws, daycare centres, etc. The interest rate is based on the market rate. The scheme offers Business Loans of up to 10 Lakh for 3-5 years with a moratorium period of 3-6 months.
- Udyogini Scheme: Under this scheme, a female business owner can use a loan to establish a business enterprise, agricultural setup, or small-scale industry. Retail traders and self-employed entrepreneurs can also apply for a loan under the scheme. Selected beneficiaries receive EDP (Entrepreneurship Development Program) training.
- Mahila Udyam Nidhi Scheme: The scheme provides financial support of up to Rs 5 Lakh under the Small Industries Development Bank of India.
Eligibility for a Small Business Loan for Women
- Citizenship: The applicantshould be an Indian citizen at the time of loan application.
- Age: The applicant should be at least 25 at application and at most 65 years old at the term end.
- Occupation: Self-employed professionals like CAs, doctors, architects, and Company Secretaries; self-employed non-professionals like retailers, traders, sole proprietors, manufacturers, and service providers, and entities like LLPs, partnership firms, private limited companies, and trusts are eligible to apply for a Business Loan for women.
- Work Experience: The applicant should have at least five years of experience in the existing business.
Apart from these Business Loan eligibility conditions, an applicant’s credit score, annual turnover, business debt coverage ratio, and nature of business also matter for Business Loan providers. One may improve their eligibility by creating a proper business plan, improving their cash flow, increasing their credit score, and preparing their documents as needed.
Documents Required for a Business Loan for Women
Here is a list of documents one must be ready with at the time of loan application:
- Mandatory documents, including the application form and PAN card
- Identity proof, like an Aadhaar card, voter ID card, driving license, passport, or a government-issued photo ID
- Residence proof, such as an Aadhaar card, driving license, voter ID card, utility bill, property tax receipt, rent or lease agreement, or registry copy
- Business continuity proof, like VAT, sales tax, excise or service tax registration, and trade license, certificate of practice, partnership deed, or RBI or SEBI-issued registration certificate
- Signature proof, like a passport, PAN card, or banker’s verification
- Income proof, like the latest ITR, audited financials, GST returns, or last six months’ bank statement
- Other documents, including a list of directors and shareholding patterns
Stepwise Process to Apply for a Business Loan for Women
The online Business Loan application process is easy and hassle-free. Follow these steps to get a Business Loan for women suitable to the funding requirements:
- Visit the lender’s website.
- Check out the Business Loan eligibility criteria and documentation requirements.
- Go to the Business Loan page and click Apply Now.
- Fill out an online application form with the necessary details.
- Upload relevant documents.
- Enter loan details like the loan amount and repayment tenure.
- A representative will get in touch for additional information if needed.
- After verifying all details and documents, the lender will send a personalised loan offer.
- Once the applicant accepts the loan offer, direct disbursal into their bank account occurs in a few hours.
Indian women have redefined how our economy performs and flourishes. Female entrepreneurs are the new-age game-changers who silently but boldly scale new heights of success. Those female entrepreneurs who have decided to scale their business may consider obtaining a Business Loan for women from reliable NBFCs like Hero FinCorp. They offer collateral-free loans of up to Rs 40 Lakh at attractive interest rates and flexible repayment terms.
