How Can Women Entrepreneurs Apply for A Business Loan?

According to a study, women entrepreneurs in India owned nearly 20% of all micro, small and medium businesses in the financial year 2021. Moreover, women-owned the highest share of micro firms in rural areas.

However, running the operation smoothly without a financial crunch is pretty difficult for every gender. In this regard, funding solutions like business loans for women can be beneficial. This credit form extends substantial credit to cover the expenses related to running a business, like stocking raw materials, paying salaries, hiring labourers, etc.

Steps to apply for a business loan

Business loans for women offer female entrepreneurs the much-needed financial backing to grow their ventures.

This credit form extends substantial funds to applicants against simple eligibility and documentation. This makes it a perfect financial tool to address emergency financial requirements.

Following are the steps that women entrepreneurs will need to follow to apply for a business loan:

Step 1: Visit the preferred lending institution’s website.

Step 2: Select the ‘Business Loan’ option from the ‘Product’ tab.

Step 3: Fill in personal and professional details as mentioned by the lending institution.

Step 4: A representative will get in touch after checking these details.

However, to make an application, women entrepreneurs need to fulfil certain eligibility criteria. These parameters are laid down by lenders to scrutinise an applicant’s credit profile and repayment capability.

What are the eligibility criteria for business loans for women?

Some of the common eligibility parameters potential borrowers need to fulfil to avail business loans for women are-

       The applicant needs to fall in the age bracket of 25-65 years.

       An individual need to present the proof of filing ITR returns for at least the previous year.

       Applicants should have ownership of the business for at least three years.

Apart from fulfilling the said criteria, a potential borrower also needs to maintain a healthy CIBIL score. This would increase the chances of availing of better services and additional benefits. In this regard, understanding the importance of one’s business credit score would be beneficial. An individual with a reliable repayment background would further receive the power to negotiate interest rates.

They would easily find lenders offering business loans against suitable terms. For instance, reputed NBFCs like Bajaj Finserv extend the said credits against simple eligibility and documentation.

Moreover, they extend a pre-approved loan offer to make the loan application quick and hassle-free. Such an offer can also be availed on financial products like a business loan, personal loan, etc. Moreover, you can also check your pre-approved offer by entering your name and phone number. 

Apart from fulfilling the eligibility, women entrepreneurs also need to submit the specified documents for loan approval.

What are the documents required against the business loan for women?

Some of the common documents for a business loan for women are -

       KYC documents for address and identity proof

       Scanned copies of the financial documents

       Proof of business ownership which include ITR, GST returns, Memorandum of Association, etc.

It is imperative to know that individuals may have to submit additional papers as stated by the lending institution.

A potential borrower should know that eligibility and documentation are the two vital parameters that are obliged to fulfil. However, they should also keep certain factors like repayment structure, loan tenor, credit options, etc., in check before initiating an application.

According to a report, the start-up India scheme by the Indian government sanctioned nearly Rs.21,200 crore to 93,094 women applications between April 2016 and March 2021. This again indicates a positive time for women entrepreneurs to take the first step towards financial independence.

Since both government and private institutions are extending customised services to support the growth of female entrepreneurs, understanding the variables becomes vital. Having a clear idea about how to apply for the best small business loans available will help in making an informed decision.

Every women business owner needs a sustainable source of liquidity, and business loans for women fulfil the requirement. In this regard, following the guide above would help women entrepreneurs make the wisest decision regarding borrowing. 

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