India is home to a diverse business ecosystem. The nation offers innumerable opportunities to potential business enthusiasts, especially women. A significant contributor to this increase in female entrepreneurs is the easy access to Business Loans for Women.
Lenders offer instant business loans to women entrepreneurs to help them attain greater success in their endeavours. The high capital value helps business women work more efficiently towards entrepreneurial success. Read on to know more about business loans for women.
Features and Benefits of Small Business Loans for Women
Following are the features and benefits of small business loans for women:
1. Quick Loan Allotment
The foremost advantage is that almost all financial institutions and NBFCs nowadays provide small business loans without any collateral. This has unveiled an opportunity for women borrowers with nil or insufficient funds to get business loans effortlessly. To get a loan, all you need to do is fulfil the eligibility criteria.
These small business loans are available at attractive interest rates. The rate of interest depends on several factors, such as business model, loan tenure, financial status of the company, and the borrower’s credentials.
2. Flexible Repaying Terms
Most of these small business loans come with flexible payment terms for supporting the borrowers to repay the loan EMIs with ease. Depending on the status of borrowers, they can also negotiate the terms of payment and EMI amount with the lender.
3. Build Your Creditworthiness
For bourgeoning business enterprises, repaying EMIs on time helps boost their creditworthiness. Greater credibility improves the trustworthiness of the business and makes borrowing women valuable clients to lenders. A convincing business profile offers the borrower better chances to avail lower interest rates.
4. Business Growth
Small business loans for women inspire budding entrepreneurs to initiate their own ventures as well as develop their existing businesses. Particularly for small businesses, adequate funding is integral to meet their initial and working capital need.
5. Tax Benefits
The interest on the principal loan amount charged by the financial institutions, which the borrower pays through EMIs, is tax deductible. The interest paid for having a business loan is generally deducted from the business revenue. This lowers the tax liability.
Now that you have gone through the benefits and features of small business loans for women, take a look at the steps to apply for a business loan for women.
How to Apply for Small Business Loans for Women
Following is a step by step guide to apply for a small business loan for women:
Step 1: Go to the lender’s website. Click on ‘Apply Online’ option in order to get the application form.
Step 2: Input your name and mobile number to generate OTP.
Step 3: Share your personal and business details.
Step 4: Upload the necessary documents along with the bank statement for the last six months.
Upon completion of all these steps, your documents will undergo verification. As soon as your loan is approved, the loan amount will be credited to your bank account within 24 hours.
Fees and Interest Rates
Leading financial institutions provide attractive interest rates on business loans which can be repaid within a flexible tenure of repayment. Doing so will facilitate affordable EMIs too. The table below will help you to understand the prevailing interest rate, processing and foreclosure charges on small business loans:
Institution |
Interest Rate |
Processing Fee |
Prepayment/Foreclosure Charges |
Bajaj Finserv |
18% onwards |
Up to 1% of the loan amount |
4% of the outstanding loan amount + Applicable taxes |
Lendingkart Finance |
14% onwards |
Up to 2% of the loan amount |
Foreclosure Charges: Nil (The option of foreclosure is allowed only after the first EMI is fully paid) |
KreditBee |
15% onwards |
NA |
NA |
FlexiLoans |
12% onwards |
1.5% - 2.5% of the loan amount |
NA |
IIFL |
16.50% onwards |
2.50%-4% of the loan amount + GST |
NA |
Disclaimer: The details are subjected to changes as per financial institution policies
Eligibility for Business Loans for Women
A business loan for women is easily approved as long as your meet the simple eligibility criteria:
Be at least 21 years of age when applying for the loan and not more than 65 years
Be an individual corporation, sole proprietor, or private company involved in trading, production, or services
Business vintage of a minimum of three years and as a professional, have at least five years of work experience
Possess clear business account records
The company must be tax-compliant
Borrowers are advised to check their eligibility with an online business loan eligibility calculator.
After having gone through the eligibility criteria of business loans for women, take a look at its necessary documents and keep them handy to avoid future hassle.
Documents Required for Business Loans for Women
The following documents must be presented when applying for a business loan for women:
Personal KYC: PAN card
Residential Address Proof: Rent agreement, driving license, voter's ID, ration card, passport, Aadhaar card
Banking Proof: Bank account statements for last 6 months
Business Proof: GST registration certificate, shops and establishment certificate, Business PAN card
FAQs
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✔️How can a woman get a business loan?
If you run a women-owned business, you'll likely be in need of a business loan at some point. Online platforms like Finserv MARKETS have made it easier for female business owners to obtain financing.
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✔️How can I get a Mahila loan?
Launched in 2015 by the Government of India, the Pradhan Mantri Mudra Yojana (PMMY) provides financial support to aspiring female entrepreneurs in starting their own business. To promote women entrepreneurship in the country, financial institutions thus extend Mahila loans for women under this scheme.
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✔️Is it easier for a woman to get a business loan?
Traditionally, women entrepreneurs have found it hard to secure business finance due to a number of social stigmas. However, the recent evolution in business finance and the emergence of FinTech platforms such as Finserv MARKETS have made it easier for women entrepreneurs to get business loans. Today, business loans for women are also enabling self-employment in rural and urban India.
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✔️How do I know if I qualify for a business loan?
Following are the factors deciding business loan eligibility:
● Age Limit: The applicant should be minimum 21 years old.
● Income: Business should be profit making at least for the past 2 year.
● Turnover: The business should have a minimal turnover of Rs. 1.5 Lakhs per annum.
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✔️What is the EMI for women's business loans?
The EMI amount you will need to pay every month will be determined based on three factors: the loan amount you have availed, your chosen repayment tenure and the rate of interest that the lender charges.
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✔️Is a business loan for women secured?
Yes, business loans for women are secured, provided you avail the loan from an approved financial institution.
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✔️How can women apply for a business loan?
The borrowing women can visit their nearest bank personally or the bank’s official website to carry out the required loan formalities. Before availing the loan, as a borrower, you are suggested to compare different business loan options along with interest rates offered by various financial institutions.
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✔️What are the types of women's business loans available?
As of today, there are various types of business loans available in India for women. They include the MUDRA Loan introduced by Pradhan Mantri Mudra Yojana (PMMY), Cent Kalyani offered by the Central Bank of India, ICICI Bank’s Self-Help Group-Bank Linkage Programme (SBLP), Stand Up India, a government initiative and Shakti Scheme offered by Bank of Baroda (BOB).
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✔️What is the age limit for women's business loans?
To become eligible for a women's business loan, your age should be minimum of 24 years and a maximum of 70 years.
