Small Business Loans For Women: Eligibility, Documents Required and Everything Else
With the Government Of India taking special initiatives to encourage women entrepreneurs, the number of women looking to start new businesses as well as ones already running one, have significantly increased. Women entrepreneurs are increasing in the business sector and just like any other business, the businesses run by women also require additional funding under certain circumstances. This is when small business loans for women can be a good option.
There are several advantages of small business loans that have been made specially available to women in India. In this blog, we have talked about everything that you need to know about business loans for women. It will give you a fair idea about your options in the market as well as the eligibility and documents required to apply for such a loan and get it approved.
Key Features of Small Business Loans For Women
There are a lot of offers from various lenders who provide business loans to women entrepreneurs. Let us take a look at the key features and advantages of such loans in India.
- Zero or minimum processing fees
- Highly competitive interest rates
- No collateral necessary for a lot of these loans
- No third party guarantee required
- Loan repayment tenures of up to 10 years
A majority of banks as well as finance companies in the loan market provide loans to women to help them operate their small businesses, manage expenses and fund the growth of their startups and small businesses.
Interest Rates And Loan Amount
When it comes to small business loans that are specially available for women, most lenders offer such loans at a mere interest rate that varies between the range of 7.35% and 7.60%. The repayment tenure can be anywhere between 5 to 10 years. Not just that, the principal loan amount can easily reach a maximum of ₹1 Crore to fund small businesses owned and run by women.
Loans for small or micro business are available in two kinds:
- Term loans that can be used to purchase a shop, business equipment and tools or to set up a set up shop, etc.
- It can also be availed as a working capital loan to manage the daily business expenses.
Here are some basic eligibility criteria for such business loans offered to women.
- Small business loans for women offered to women who aim to establish a micro enterprise and are between the age group of 20-60 years.
- The business getting the loan sanctioned must have women proprietorship, or partnership firms with women. The enterprise may also have a woman as a major stakeholder and will therefore be eligible to apply for such loans.
- The applicant must be a resident citizen of India.
- If it is an operating business, it must be in operation for at least 1 year or more.
Some of these loans may require security or collateral as per the lender’s norms. Although, loans taken under the CGTMSE scheme of the Government of India. Are absolutely collateral free and women can get a loan of up to ₹1 crore under the scheme.
The basic documents required include:
- Personal KYC documents
- Residence proof
- Bank statements of past 6 months
- Business KYC documents (GST Registration Certificate, Shops & Establishment Certificate, Business PAN Card, etc.)
Get A Loan For Women With Ease!
Getting a small business loan for women is pretty simple and a lot of lenders also enable you to get such loans without any hassles. You can apply online and there is no need for any paperwork. Minimum documentation is required and you can easily get such loans approved and disbursed to your account.
Depending on the financing value availed as business loan, you can choose a suitable tenure of 5 to 7 years. This allows you to plan repayment better as per your business’s financial standing. It also helps select a suitable EMI that helps fulfil your repayment liability timely without straining the business finances.
All these factors combined with multiple repayment options that the lending institutions provide help provide an overall advantage of borrowing. Plus, businesses can always leverage their eligibility to negotiate with the lender for a competitive interest rate and other favourable terms on the business loan for overall optimization of existing financial benefits.