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    4 Simple ways for women entrepreneurs to access working capital

    Published on May 17, 2021

    The Indian market is now a lot more accommodating for women entrepreneurs today. Unlike in the past, where a lack of opportunities, financing options, and scope for growth were active roadblocks for the growth of small and medium enterprises, today offers provisions that can help one achieve success and take their enterprise to the next level.

    Advancement in technology has allowed for greater learning opportunities while financing options such as business loans for women have simplified access to credit greatly.

    In fact, some lenders even provide specialised offerings such as a working capital loan for women or equipment financing loan for women, all tailored to suit niche needs. Such development goes to show that there’s ample opportunity in the market and, as an entrepreneur, it depends on you to pick the best option for your needs.

    To know about the different ways in which women entrepreneurs can access funds for working capital needs, read on.

    Personal savings

    Prior to the ease of access women entrepreneurs now enjoy, personal savings or the use of own funds was the popular option. Due to the restricted access to capital, many entrepreneurs relied on either their own savings or loans taken from relatives or friends to meet business demands. While this can work, such an approach is far from ideal for both short and long-term capital requirements.

    This is especially true when utilising your savings as it exerts a great deal of pressure on your financial health. Using savings to establish and scale a business exposes you to external risks, and those could negatively impact the business. Additionally, funding the business’ working capital through personal savings is quite limiting and could hamper progress. However, it can still be considered if your financial needs are accommodated by your savings, provided you still have a corpus as an emergency fund.

    Financial lenders

    Lenders such as banks and non-banking finance companies (NBFCs) are by far the best option as they offer quick access to specialised business loans for women. Of the two, NBFCs come out on top mainly because qualifying for a working capital loan or any other such offering may be easier and the convenience of getting the funds is greater.

    NBFCs are usually a lot more flexible than banks when it comes to their eligibility protocols and may also be able to offer a loan that suits your finances better.

    In any case, business loans for women are a great option for several reasons. Firstly, they offer access to ample sanctions and some credit facilities don’t require you to pledge an asset as collateral. Secondly, these loans are offered at attractive interest rates to incentivise borrowing within the sector. As a result, women entrepreneurs can make big-ticket expenses such as expansion or purchasing high-end equipment on affordable terms. Lastly, you can repay the loan comfortably over a lengthy tenor, thus ensuring optimal business cash flow. Some lenders offer loan repayment tenors of up to 84 months, which helps ensure that monthly payments never pose a risk to the working capital of the firm.

    Government schemes

    Empowering women entrepreneurs is the active stance of the Government of India, and there are many initiatives backing this goal. There are several schemes aimed at boosting the growth of this sector and offering assistance in many ways. Here is a list of the 5 popular government schemes for women entrepreneurs.

    • Mudra Yojana Scheme
    • Mahila Udyam Nidhi Scheme
    • Stree Shakti Package For Women Entrepreneurs
    • TREAD (Trade-Related Entrepreneurship Assistance and Development) scheme
    • Pradhan Mantri Rozgar Yojana

    Crowdfunding initiatives

    This concept connects businesses with investors and generates funding. Crowdfunding is quite popular on social media platforms and other online portals. Typically, you will be required to pitch a business plan and projections, after which investors will consider investing, for a share of the profits or other rewards. However, this solution doesn’t guarantee capital and may take a while to generate funding.

    These are the options available to you when looking to bolster working capital. Ideally, it is best to qualify for a government scheme that offers loan concessions and pair it with a cost-effective offering. If that isn’t possible, another alternative is to scout for a lender that offers affordable terms and ample sanction. One instrument that meets these requirements with ease is the Bajaj Finserv Business Loan for Women Entrepreneurs.

    It offers funds up to Rs.45 lakh without the need for any collateral and an attractive interest rate. What’s more, it allows you to opt for a flexible tenor of up to 84 months, ensuring that business cash flow stays healthy all through repayment. You can also avail of funds easily and in a hassle-free manner. All you have to do is meet the simple criteria, apply online and furnish basic documentation.