How Female Entrepreneurs Can Secure a Business Loan ?

The Indian economy is experiencing significant changes due to a more supportive environment for entrepreneurship. Many individuals are now more willing to leave their jobs to pursue entrepreneurial ventures. A growing number of women are also stepping into entrepreneurship, contributing to the country’s SME sector and driving positive societal change. To support their initiatives, the government and financial institutions offer business loans for women, enabling them to showcase their business skills and creativity.

Female entrepreneurs who are successfully running a business but need funding to launch a new product or expand their presence can obtain loans designed for women.

Benefits of Business Loans for Women

Here are the advantages of small business loans for women:

• Easy Accessibility: Leading lending institutions, such as Hero FinCorp, encourage female entrepreneurs by offering small business loans. These loans can be accessed online with simple eligibility criteria and minimal documentation. Applicants can apply for the necessary funds from the comfort of their homes via the lender’s website.
• No Collateral Requirement: Many female entrepreneurs may not have assets to pledge as collateral or may not want to risk them. Collateral-free business loans provide finance without requiring collateral, security, or a guarantor.
• Discounted Interest Rates: Women entrepreneurs can compare various loan plans to secure the best interest rates. Additionally, loans under government schemes may offer extra subsidies and tax exemptions.
• Easy Repayment: Female business owners can repay SME loans in easy EMIs over a convenient term. An EMI calculator helps them choose a plan with affordable installments.
• Business Growth: SME loans enable female entrepreneurs to operate and expand their businesses with adequate funds and no restrictions on end-use.

Business Loans Under Various Government Schemes

Here are some government schemes that provide financial support to female entrepreneurs in India:

• Cent Kalyani Scheme: This scheme is for businesswomen who want to start or expand their business in the services and manufacturing sectors. Loans are available as cash credit, letter of guarantee, letter of credit, or overdraft without requiring collateral or a guarantor. Loans up to ₹1 Crore have no processing charges and offer optional comprehensive insurance for stocks, machinery, and equipment.
• Mahila Udyam Nidhi Scheme: Offered by the Small Industries Development Bank of India (SIDBI) and Punjab National Bank, this scheme provides loans for setting up beauty parlours, auto rickshaws, daycare centres, and more. The interest rate is based on market rates, and loans up to ₹10 Lakh are available for 3-5 years with a moratorium period of 3-6 months.
• Udyogini Scheme: This scheme allows female business owners to obtain loans to establish a business enterprise, agricultural setup, or small-scale industry. Retail traders and self-employed entrepreneurs can also apply. Selected beneficiaries receive Entrepreneurship Development Program (EDP) training.
• Mahila Udyam Nidhi Scheme: This scheme provides financial support of up to ₹5 Lakh under the Small Industries Development Bank of India.

Eligibility for a Small Business Loan for Women

To be eligible for a business loan for women, applicants must meet the following criteria:

• Citizenship: The applicant must be an Indian citizen.
• Age: The applicant must be at least 25 years old at the time of application and no older than 65 years at the end of the loan term.
• Occupation: Self-employed professionals (CAs, doctors, architects, Company Secretaries), self-employed non-professionals (retailers, traders, sole proprietors, manufacturers, service providers), and entities (LLPs, partnership firms, private limited companies, trusts) are eligible.
• Work Experience: The applicant should have at least five years of experience in their current business.

In addition to these criteria, an applicant’s credit score, annual turnover, business debt coverage ratio, and nature of business are also considered by loan providers. Improving eligibility can be achieved by creating a solid business plan, enhancing cash flow, increasing credit score, and preparing necessary documents.

Documents Required for a Business Loan for Women

Here are the documents needed when applying for a business loan for women:

• Mandatory Documents: Application form and PAN card
• Identity Proof: Aadhaar card, voter ID card, driving license, passport, or government-issued photo ID
• Residence Proof: Aadhaar card, driving license, voter ID card, utility bill, property tax receipt, rent or lease agreement, or registry copy
• Business Continuity Proof: VAT, sales tax, excise or service tax registration, trade license, certificate of practice, partnership deed, or RBI/SEBI-issued registration certificate
• Signature Proof: Passport, PAN card, or banker’s verification
• Income Proof: Latest ITR, audited financials, GST returns, last six months’ bank statement
• Other Documents: List of directors and shareholding patterns

Stepwise Process to Apply for a Business Loan for Women

Applying for a business loan for women online is straightforward. Follow these steps:

1. Visit the Lender’s Website: Check the eligibility criteria and documentation requirements.
2. Go to the Business Loan Page: Click on “Apply Now.”
3. Fill Out the Online Application Form: Provide the necessary details.
4. Upload Relevant Documents: Submit the required documents.
5. Enter Loan Details: Specify the loan amount and repayment tenure.
6. Await Contact: A representative will get in touch if additional information is needed.
7. Verification: After verifying all details and documents, the lender will send a personalized loan offer.
8. Accept the Loan Offer: Once accepted, the loan amount will be disbursed directly into your bank account within a few hours.

Indian women are redefining economic performance and growth. Female entrepreneurs are emerging as new-age leaders, quietly yet boldly achieving remarkable success. Women entrepreneurs looking to scale their businesses can consider obtaining a business loan for women from reliable NBFCs like Hero FinCorp, which offers collateral-free loans of up to ₹40 Lakh at attractive interest rates and flexible repayment terms.