With India ranking first in the list of countries with the highest percentage of successful female entrepreneurs according to a recent Global Entrepreneurialism Report by BNP Paribas, it is a morale booster for women business owners, and those looking to start one.
A loan is an integral part of a business and is the fuel that keeps it running. Here are a few things about business loans, that women business owners must know about:
Business loans are offered even by NBFCs
With the evolution of non-banking financial companies (NBFCs), women business owners don’t have to resort to traditional financing institutes like banks for procuring business loans. Business loans for women from NBFCs entail minimal documentation, hassle-free lending, quick disbursal of funds, and an easy application process, among others.
With relaxed lending norms compared to traditional lending institutes, NBFCs provide funds to women business owners to propel their business.
Collateral-free business loans are available
It’s a common misconception that a business loan needs collateral. However, it’s not always the case. Today, women business owners can avail collateral free loans where they don’t have to put their personal or business assets on the line as security.
This acts as a shot in the arm of women business owners who are in the formative years of business and are still trying to establish a foothold in the market. The collateral-free business loans are available at a competitive interest rate.
A high loan amount for unsecured business loans
In a competitive environment, it’s not only the time, but also the amount of loan that plays an essential role in meeting business objectives and goals. Women business owners can avail an unsecured business loan amounting to as high as Rs.30 lakh to meet their varied business objectives such as:
Buying/leasing new equipment
Improving working capital
Funds can be withdrawn as per needs
New-age business loans offered by NBFCs like Bajaj Finserv come with a flexi loan facility whereby women business owners can withdraw funds as and when required from the approved loan limit. This facility is useful to meet unexpected and sudden operational costs in a business arising due to policy and socio-economic changes.
Another essential feature of this facility is that interest is charged only on the amount withdrawn and not on the entire limit, unlike term loans. This results in lower monthly EMIs, thereby limiting cash outgo every month. This improves cash flow in the long-run.
Loans can be availed even with poor credit score
While credit score does play an essential role in the loan application and approval process, it’s not always true that women business owners with not-so-great credit score can’t avail a business loan. There are lenders who offer loans to women business owners who don’t have a high score.
However, these loans come with various terms and conditions with variations in interest rate, loan amount, and tenor among others.