Women are a key force in the entrepreneurship field. This is a reason why governments, authorities, and lenders have tried to help women leaders expand their enterprises by bringing in attractive financial assistance. Since the needs of women-led businesses are slightly different from others, the type of financing help also is unique. Business loan for women has emerged as a preferred way for women to grow and nurture their businesses, be it in manufacturing or service line.
Women-led businesses are competing with men driven enterprises. Women-led businesses exist in areas like apparel, food delivery, office maintenance, beauty and wellness, coaching, manpower management, technology, customer care and service, etc. Handicraft, art and many small-scale businesses are entirely led and operated by women. However, the requirement of capital is almost equal for any growing and expanding business.
Hence, financial lenders offer business loans for women. Institutions like Tata Capital offer up to Rs 50 lakh for such a business loan. Women are not required to bring any collateral i.e. security for taking a loan. If the business is strong and growing, and the borrower is eligible, a business loan will be given quickly.
There are 5 areas where a business loan for women differs from conventional business loans.
Low-interest rates – Business loan for women are usually given at low-interest rates. In this way, the loan repayment burden is low for women entrepreneurs. If you get a business loan offer, calculate the repayment with business loan EMI calculator to assess whether it is affordable or not. If you want even lower rates, talk to Tata Capital for better deals.
High tenures – Business loans for women are often given with high tenures. This has two advantages; one the business loan EMI is lower, and the repayment pressure is eased over a longer time period. Some women-led businesses have a high gestation period, and high tenures are a smart way to deal with this.
Waiver of security requirements – Top lenders like Tata Capital give business loans for women entrepreneurs without any collateral or security. Banks insist on collateral the moment business loan amount crosses a threshold. But, NBFCs like Tata Capital give up to Rs 75 lakh business loan with zero collateral.
Minimal processing fees – One of the areas where there is a major difference between business loans for women and conventional business loans is processing fees. Financial institutions are ready to forego all or most of the processing fees when it comes to giving loans for women-led businesses. In this way, women entrepreneurs can save on the processing charges and get more out of their business loan. The processing fee waiver can also indirectly help cut repayment amount; you can check the same with business loan EMI calculator and judge the difference.
Minimal documentation – The government and the financial system are encouraging women enterprises to come forward and take loans to grow their business. So, women-centric business loans usually have minimal documentation requirements, which means women can fill up a loan application with just a few documents.