June 21, 2024
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4 Advantages of Availing Business Loan for Women

In today’s times, women entrepreneurs are leading the business space, be it with small or medium-size start-ups or large-scale firms. However, any successful business needs capital or funding for a variety of reasons, be it for growth, to manage daily working capital, buying machinery or inventory, upscaling, etc.

While there isn’t any stark difference in business loan products for male or female, there is certainly more concessions offered to women to encourage them to become self-sufficient and gain competitive advantage, like –

  1. Interest Rate Concession: Some banks, NBFCs and other financial institutions offer concessions to women applicants in the form of discounted interest rates on their business loans, like NeoGrowth business loan products. This could also be of huge value, especially if the loan amount is
  2. Flexible Repayment Tenure: Lenders understand that any business, be it an existing, start-up or a newly formed company, can run into various issues and face challenges along the way. Hence, most lenders and banks offer very easy and hassle-free repayment plans that are also flexible in terms of the
  3. Collateral-free: Many business loans for women applicants are collateral-free in nature, which means that they do not need to offer anything to the lender as security. Moreover, in many cases, banks and financial institutions don’t ask for a third-party guarantor
  4. Type of Business Loan: Women entrepreneurs can opt for various types of business loans, be it a short-term loan, long-term business loan, overdraft loan, working capital requirement, or unsecured business

In addition to this, women applicants also need to submit minimal paperwork, and the bank or lending institution takes care of the entire loan process for the applicant, as in the case of NeoGrowth business loan and other such leading loan providers. Women who are seeking a business loan can also avail of a higher loan amount if they are eligible and get special benefits by opting for women-led government loan schemes.

To facilitate women entrepreneurs with their business, many of the leading banks and financial institutions offer business loans for women with discounted rate of interest, quicker disbursal and other such advantages. Even the government of India has launched many schemes to help women run, expand and fund their businesses. Here are some of the government schemes for women entrepreneurs that offer business loans with special features and provisions –

  • Mahila Udyam Nidhi Scheme

 

Under this scheme, women can avail support for setting up new projects or enhancing viable sick units in the small-scale sector. Women who are looking to start day care centres, open a parlour business, buy a rickshaw, etc., can avail a business loan under this scheme from the Punjab National Bank & Small Industries Development Bank of India.

  • Pradhan Mantri Mudra Yojana

Every individual seeking a business loan, including women, is eligible for this government scheme. Business loans under this scheme are offered by the NBFCs,

Regional Rural banks, small finance banks, commercial banks, and other micro-financing institutions. Mudra loans are offered in 3 categories, which fund a business unit at various stages – Shishu (up to ₹50,000), Kishore ( ₹50,001 to ₹5,00,000) & Tarun (₹5,00,001 to ₹10,00,000).

  • Shakti Scheme

This is a scheme from the Bank of Baroda, applicable for women who are seeking a business loan. The margin for this type of a loan product is decided by the RBI and Bank of Baroda. Women who are setting up or having an existing business in the field of housing, education, MSME industry, micro-credit sector, or agriculture can avail of this scheme.

  • Cent Kalyani Scheme

Women who seek to expand their business or start a new one in the manufacturing and services sector can avail of the Cent Kalyani scheme. Business loans under this scheme are in the form of letter of guarantee, credit, overdraft, cash credit, etc.

This is a collateral-free loan and there is no requirement for any third-party guarantee either.

Funding is fuel to business, and the banks, NBFCs, and other financial institutions are there to fuel your dream and ensure your business runs at warp speed. Often, lenders encourage women applicants to start a new business, expand an existing company or even scale up their business at ease, with the help of flexible business loan products, such as the NeoGrowth business loan product. Applying for a business loan is now a cakewalk for women, and the discounted rates, hassle-free paperwork and ease of application gives the much-needed boost for women everywhere who want to start or grow their business.

FAQs

  1. Can women avail of a business loan?

Ans. Yes, women entrepreneurs who run a business or start-up and want to expand their business or even women who aspire to start a business can avail of a business loan. The business loan amount can help fund your business, add to the working capital, help pay wages, buy machinery or inventory, and more.

2.          Do women need to provide security to avail a business loan?

 

Ans. Nowadays, it is not at all mandatory for women to put up any collateral or even offer third-party guarantor to the lender, banks, or other institutions.

However, it could help negotiate for better interest rates or higher flexibility if you do put up a collateral.

3.          Can a Mudra loan be availed by women from any bank?

Ans. Mudra loans are offered by most commercial banks, NBFCs, Regional Rural banks, small finance banks, and other micro-financing institutions, under the government’s Mudra scheme.

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