In a developing country like ours, the opportunities and potential for growth are endless. While start-ups and entrepreneurship are predominantly male dominated, a growing number of female entrepreneurs are now realizing their entrepreneurial dreams. Loan for women entrepreneurs is a step to help women achieve their dreams. According to Start-up India, only 13.76% of total entrepreneurs in India are women. Where the number of female entrepreneurs is around 8 million, the number of male entrepreneurs has reached 50 million. And what better time than now to change those statistics and empower women?
For a long time, the traditional stereotype has been that women are only intended for housework. Some consider women to be only good for cooking, while others think it does not bode well for women to go beyond the four walls of the house. Fortunately times are changing.
All banks and non-bank financial corporations (NBFCs) offer various loans to women entrepreneurs. These loans aim to support women who wish to break the chains of stereotypes. Following this path, many financial companies have launched different loan programs that offer benefits such as low interest rates, flexible repayment options, lower EMIs, etc., especially for women.
Get started with a small business loan
A growing number of financial institutions are offering many different forms of small business or MSME loans for women entrepreneurs. While most of these loans are only available to existing businesses, some lenders also offer short-term business loans to start-ups. For example, the LOC or line of credit is a popular choice for financing small and medium-sized businesses.
With this option, the lender checks the applicant’s eligibility to decide their maximum LOC limit. You will only have to pay interest on the amount you used and not on the entire credit limit when paying off the loan.
Characteristics of small business loan for women entrepreneurs
- Several types of loan choices to choose from
- Accessible financing guaranteed and unsecured
- Competitive interest rate
- Ideal for the short-term financing needs of women entrepreneurs
Now let’s see some options for the loan for women entrepreneurs:
Non-bank financial corporations – Modern lenders
NBFCs are a great choice if you are looking to finance your start-up or an existing business. Their eligibility for loans is not as strict as those of conventional banks. It is even possible that if the banks reject your loan application, your proposal may be assessed and supported by the NBFC.
With NBFCs, the collateral requirement is also quite minimal, and in some cases there is no need for real estate collateral, and they offer special loan discounts for female entrepreneurs.
Use government programs and policies
The Indian government has placed great importance on the empowerment of women. Over the years, the central government and various state governments have initiated various loan programs for women entrepreneurs. For example, women entrepreneurs can get a loan of up to Rs 50,000, with the Shishu loan option, to start a small business. The interest rates are among the lowest in the market and the eligibility criterion is limited.
Characteristics of public financing options
- Low interest rates and limited eligibility conditions
- Several distinct shapes of structures to choose from
- The programs include many banks and financial institutions.
- Flexible tenure period for a limit of 5 years
- Take out a loan against collateral
One of the most common types of business loans in India, if you are planning to start a small business or a home business, is a secured loan. You can assign your investments in a stock market, mutual fund or life insurance policy with this option and borrow a loan against it. In most cases, you are free to use the loan amount as per your will.
Characteristics of loans against surety
- Secure form of credit.
- Competitive interest rate.
- Loan loan up to 75 percent of the securities pledged.
Even the most successful businesses sometimes need additional funds. Future businesswomen must therefore think about how the different loans granted to women entrepreneurs will meet their different financial needs. Choosing the right loan can be as critical as having cash in the first place, as variables such as repayment options and loan costs can directly affect the business.
Working with a financial company that understands their needs is important for women entrepreneurs who want to make their business vision a reality. Reputable lending institutions like Kinara Capital offer products like HerVikas, allowing women to apply for unsecured loans with special discounts. The process is hassle free and you can get a loan in no time.