For the last few decades, women-owned start-ups have been gaining popularity and picking up pace in the country. It is adding significantly to the country’s economic growth and benefitting India’s women and business culture immensely. The Government of India has also supported the development of women-owned businesses.

One of the prime resources needed to begin and run a start-up is funding. Several banks and Non-Banking Financial Corporations (NBFCs) in India have taken the initiative to offer special Business Loans for women for their start-ups.

What Are the Eligibility Criteria for Start-Up Loans for Women?

Most banks and Non-Banking Financial Corporations have made the process and prerequisites for Business Loans for women hassle-free. They also offer unique benefits and solutions to these women. Women-owned businesses primarily operate in the category of small-sized or medium-sized businesses.

The eligibility criteria required to avail of Business Loans in India are:

1.Age: Banks or NBFCs establish their age bracket, and the women owners who belong to that age limit may avail of Business Loans for their start-ups.

2. Annual Business Turnover: Each lending body benchmarks its limit of a minimum yearly business turnover or projected turnover while sanctioning a Business Loan in India.

3.Work Experience: Banks and NBFCs define a minimum work experience in the business vintage to allow sanction of a business loan.

What Are the Document Requirements while Applying for Business Loans in India?

Applicants require a few documents and prerequisites to avail of a Business Loan in India. The requirements are:

1.The company PAN card or owner’s PAN card, Aadhar Card and Passport are required for the KYC procedure while applying for a Business Loan.

2.Address proof, such as utility bills or rent agreements, is required.

3.A bank account statement of the business for the past six months is necessary to check the financial status.

What Areas to Take Care of while Applying for a Business Loan?

1. Maintain a Good Credit Score: A good credit score would incentivize lenders to offer loans at lower interest rates. The credit score indicates timely repayments without lapses and errors. A good score will enhance the possibility of easier approval for a business loan. Women who are looking for financing for their businesses can start by maintaining a good credit score.

2. Focus on Offers Specific to Women: Women searching for financing options for their start-ups should mainly look for Banks and NBFCs introducing offers and deals specifically for women entrepreneurs. Today there are numerous schemes undertaken by the Government to support women’s growth and following that approach will motivate more women to join the entrepreneur hub.

3. Set up a Well-Functioning Business Plan: Lending bodies will sanction Business Loans more willingly and at a lower rate of interest to businesses functioning well and showing a growth pattern over the last few months. Formulating and implementing an efficient and effective business plan is imperative to gain the trust of financing bodies.

4. Collateral: Women entrepreneurs can opt to use collateral for getting a business loan. Lenders may sanction loans without difficulty if provided with appropriate collateral against them. The collateral can be in any form if approved and accepted by the bank or NBFC.

Interest Rates of Loans for Women-Owned Businesses

Generally, Government schemes and other Banks and NBFCs provide loans specifically to women-owned start-ups at a lower rate of interest than the prevailing rate for typical Business Loans. The interest rates range between 7% and 8%. However, the conditions against sanctioning Business Loans for women at a lowered interest rate vary from lender to lender. The repayment tenure may also be more than usual, provided the prerequisites are complete, and the risk factor is considerably lower.

Conclusion

To conclude, women-owned businesses are continuously gaining prominence, and pushing the country’s economic status upward. Financing bodies must provide opportunities to women from all backgrounds to avail of the funding resources for their businesses and help them grow.