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Business loans for women – All you need to know

mahindra-finance-author

by Mahindra Finance

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February 7, 2024

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6 mins read

Women entrepreneurs are transforming the business industry by bringing in fresh ideas, determination, and unique perspectives. Breaking through traditional barriers, they're making their mark in various sectors, contributing to innovation and economic growth. Particularly notable is the rise of women-owned Micro, Small, and Medium Enterprises (MSMEs), showcasing their significant impact.

Business loans for women play a vital role, enabling them to pursue their dreams. With financial backing, they can invest in resources, technology, and marketing, overcoming initial challenges and expanding their ventures.

What are business loans for women?

Loans for female business owners are financing facilities provided by banks and financial institutions to help borrowers start or expand their businesses. They come into two variants i.e., secured loans and unsecured loans. For secured business loans, you need to provide collateral security. The upside is – it comes with a lower interest rate.

Alternatively, you can opt for unsecured business loans that do not require any collateral security. These business loans for businesswomen assist them in starting and expanding their business. Now let’s understand the features of these loans, including government loans for women.

Features of business loan for women

Following are some of the key features of loans for female business owners in India:

  • No Collateral Requirement: Business loan for women are unsecured loans that are granted to meet business-related expenditure. Therefore, you are not required to provide any collateral security to avail of such loans. This ensures your personal assets are not at stake, thus bringing in a sense of relief.
  • Affordable Interest Rates: The interest rate in the case of a women entrepreneurs loan is quite affordable. Most banks and financial institutions like Mahindra Finance provide loans to businesswomen at affordable interest rates.
  • Favourable Terms: If your business idea and plan are good and you meet all the eligibility criteria for business loan, then you can get loans at favourable terms. This can make the financing aspect a lot simpler for your business.
  • Flexible Repayments: Business loans offer flexible repayment. It usually depends on the amount of loan you avail and the amount of EMI you can afford to pay each month. Depending on your business needs, preferences, and financial situations, you can select the tenure that meets your requirements.
  • Government Loans for Women: The government too, with an aim to promote entrepreneurship among women, has launched women entrepreneurs loan schemes. These loans provide them with the capital to help them get established, especially in the initial stage

Benefits of business loan for women

The following are the benefits of business loan for women:

  • Initial Capital: To start any business, having initial capital is imperative. It helps develop the first prototype or sample, market the product, and gain initial customers. These startup business loans for women provide you with the much-needed initial capital for your business. This can help you with the initial setup and get your business going.  
  • Debt Consolidation: If you have already taken a loan for starting your business from multiple sources, then loans for female business owners can help you with debt consolidation to consolidate all your debt into one place. Further, business loans can be a lot more affordable than informal loan arrangements like money lenders.
  • Scaling Your Business: After gaining the initial traction and customers, you get the validation for your product. Thus, you can proceed to scale your business. Scaling can be done in multiple ways. It can include scaling your marketing campaign, expanding geographically, introducing verticals, or even new products. All these require significant capital and that’s where the business can help you with. They can provide you with the capital to grow rapidly in a cost-affordable manner.
  • Loans for Professionals: If you are a professional like a doctor or a Chartered Accountant, then these loans can easily assist to start practicing your profession. Further, the interest rates are quite affordable. Further, other professionals like architects, company secretaries etc. are also eligible to avail of this financing facility.

Government loans for women entrepreneurs in India

The following table shows the government schemes for businesswomen in India:

Scheme NameMaximum Loan AmountInterest Rates
Mudra Loan for WomenUp to Rs 10 lakhNil to 0.05%
Stand-Up India SchemeUp to Rs 1 croreMCLR + 3% + tenor premium
Stree Shakti YojanaOver Rs 2 lakh0.05%
Dena Shakti SchemeUp to Rs 20 lakh0.25%
Pradhan Mantri Mudra YojanaUp to Rs 10 lakhBanks charge reasonable rates
within the overall RBI guidelines.

Note: These rates are subject to change

Conclusion

Business loan for women have been the game changer for women with entrepreneurial spirit. It ensures that capital is not a hindrance to starting and growing a business. You just need to have the right plan and select the right lender to start your business. If you too are starting your own startup, then you can easily fund it with startup business loans for women.

Mahindra Finance is a pioneering financing institution that has helped numerous women start and expand their businesses to achieve their dreams withloans forfemalebusiness owners. With a seamless application process, simple eligibility criteria, flexible terms, and affordable business loan interest rates, Mahindra Finance ensures capital is not a hurdle to fulfil your dreams.

Frequently Asked Questions (FAQs)

Q: How can business loans help women?

A: Business loans provide the initial capital to women to start their own businesses. Further, it can also be used to expand the business operations.

Q: What is the interest rate for business loans for women?

A: The interest rates in the case of business loan for women depend on multiple factors like the borrower’s profile, their business plan and prospects, financial forecasts etc.

Q: What is the purpose for which business loans can be used?

A: You can use funds from business loans to meet the business-related expenditure. This includes initial set-up, product development, marketing, operation expenses, expansion, etc.

Q: Are business loans secured or unsecured?

A: Business loans are both secured and unsecured. While you need to furnish collateral security to get secured business loans, you can avail of unsecured business loans without any security. However, the interest rates are generally higher in the case of unsecured business loans as compared to secured business loans.

Q: What are the things I should keep in mind while applying for business loans?

A: When applying for a business loan, you should determine your needs, select the right lender, and negotiate the best interest rate and terms. Further, you should also check whether you fulfil all the eligibility criteria of the lender.

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