Everything you need to know about business loans for women

Everything you need to know about business loans for women

Women business owners startups have picked up popularity in the country in the last couple of decades. Although majorly related to the service sector, the growth and emergence of women-owned businesses significantly contribute to the country’s economic independence.

Apart from bringing on financial independence, the women entrepreneur also created job opportunities for many people. Women entrepreneurs, however, have to struggle more to get business loan options.

Let’s look at the 5 of India’s most popular business loans for women entrepreneurs and how they can avail loans:

  1. Cent Kalyani offered by the Central Bank of India – MSME business loan with pay interest: 7.35% onwards

    The Central Bank of India offers small business loans and such loans for women entrepreneurs looking to open a new company or expand the current one.

    Women applicants in rural and cottage industries, MSMEs, entrepreneurs, and women applicants in farming, retailing, and government-backed firms can avail of this loan along with government schemes.

    This small business loan aims to meet daily requirements, such as the purchase of plant & machinery/equipment and working capital loan. There is no processing fee applicable on the loan amount offered. The loan offers very competitive interest rates among the competition.

    The maximum limit of the loan amount that you can avail of under this scheme is up to Rs. 100 Lakh.

  2. Stree Shakti Package from the SBI; Interest rate: 11.20% onwards

    The Stree Shakti Package or Stree Shakti Tractor Loan offered by the State Bank of India’s government schemes business loan for businesses owned by female entrepreneurs features no security required.

    Additionally, the loan application is provided at reasonable interest rates with 50% for accessories.

    Features:

    • Attractive Interest Rates – 11.20% onwards (p.a.)
    • Mortgage Free – No Collateral Required
    • Repayment Tenure – loan tenure up to 36 months, including one month moratorium period
  3. Shringaar and Annapurna from Bhartiya Mahila Bank

    The Bhartiya Mahila Bank offers women borrowers a wide range of loans to help them set new or expand their existing small businesses.

    Two of the popular options in this category include Shringaar and Annapurna.

    The Shringaar working capital loan targets women who are interested in setting up beauty parlors.

    The Annapurna loan scheme offers financial freedom to females with an interest in a small business like establishing a food catering business for selling lunch packs.

    a) The BMB Shringaar – Loan for Beauty Parlour, Saloon, or Spa

    Features:

    • The applicant’s minimum limit of age is 20 years, and the maximum is 60 years, this is the eligibility criteria.
    • The repayment tenure for the term loan is a maximum of seven years
    • Collateral free loan to be covered under the CGTMSE scheme
    • Tie up with Cavinkare, Naturals, and Lakme

    b) The BMB Annapurna Loan – Food Catering

    Features:

    • The age of the applicant minimum is 18 years, and the maximum is 60 years, this is the eligibility criteria.
    • Collateral Free to be covered under CGTMSE
    • Maximum loan repayment tenure up to 3 years
  4. The Synd Mahila Shakti from Canara Bank

    The Syndicate Bank’s Synd Mahila Shakthi targets both new and current businesswomen who want to avail loans.

    This scheme is available as either a cash credit to meet the working capital requirement of new and existing firms or as a term loan scheme of up to ten years. it works as financial support for women entrepreneurs who want to start their dream business.

    A company seeking such a loan that provides adequate financial support needs to have one or more women entrepreneurs owning at least 50 percent of the financial holding in partnership firms.

  5. The Shakti Scheme from the Bank of Baroda
    Shakti Scheme from Dena Bank supports women entrepreneurs active in a wide range of sectors, including agriculture & allied activities, education, retail trade, microcredit, housing, and enterprises in direct or indirect finance, manufacturing, and services sectors.

    The maximum loan amount being offered from the financial institution differs based on the enterprise’s industry.

    The term loan is provided with no processing fee and competitive interest rates of around 0.5% on business loans up to Rs. 5 lakh taken in your bank account.

Documents Required for Loan Application

Document list

  • Duly filled application form with two passport-size photographs of the applicant
  • Self-written Business Plan and Strategy
  • Identity Proof such as Driving License (DL), Voter ID Card, PAN card, Passport, Aadhaar card.
  • Address Proof such as Passport, Utility Bills, Aadhar Card, Voter’s ID card
  • Income Proof such as Bank statement of last six months, Salary Slips, Bank statement
  • The Business Incorporation Certificate
  • Additionally, any other document is required by the lender.

How to apply for Business Loans for Businesswomen?

To apply for Business Loan, female entrepreneurs can check, compare and pick from various available loans provided by leading financial institutions.

They can submit the basic required info and documents to further connect with the bank’s representative to carry forward the loan process.

Some Other Business Loan Schemes for Women

a) KBL Mahila Udyog Loan from Karnataka Bank

The KBL Mahila Udyog loan is offered to meet funding requirements for any income generation activity.

This loan is offered exclusively to women entrepreneurs, and the maximum loan amount is Rs. 10 lakh, and the maximum repayment tenure is up to 120 months.

The Mahila Udyog Loan is offered to women entrepreneurs where they hold a minimum of 51% of the shareholding and controlling stake in a company.

b) Mahila Udyam Nidhi Scheme from PNB

The Mahila Udyam Nidhi Scheme is offered to women entrepreneurs to provide financial assistance to start new projects in the small-scale sector and improve SSI units.

This scheme also helps expand, upgrade, technology advancement, and diversification of tiny and SSI units.

Frequently Asked Questions (FAQ)

Q. How can a woman entrepreneur apply for a business loan?

Ans. Women borrowers can visit the bank’s official website to apply or can personally see the bank to perform loan formalities.

Q. What loans are there for women to start a business?

Ans. Business loans for women are available in almost every type that applicants can use, like MSME loans, business loans, working capital loans, and term loans.

Q. What is the best available loan for a woman entrepreneur?

Ans. The Cent Kalyani from the Central Bank of India is the best possible business or MSME loan for females, as it is offered at a nominal interest rate of 7.40% per annum.

Q. What loan options are available to start a small business for women?

Ans. Small Business Loans is provided by various Micro Finance Institutions, Small Finance Banks, Regional Rural Banks, Co-operative Banks at concessional interest rates.

Q. What are the government loans for females to start a business?

Ans. Businesswomen can apply for business loans under various government loan schemes like Mudra Yojana, PMEGP, CGTMSE, Startup India, Standup India, psbloansin59minutes.com.

*Disclaimer
The ROI is provided to us by the bank, and details are subject to change without notice.
OneNDF cannot be held accountable for it.

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