Our country had a lower ranking as far as business opportunities for women were questioned. However, this was until the important mandate NPSDE (National Policy for Skills Development and Entrepreneurship), adopted in 2015, started offering the advantage of business loans. It was implemented for women who wished to establish their own businesses. Business loans for women are available in a variety of sectors.
Did You Know?
Based on the Sixth Economic Census published in 2018, women make up approximately 14% of total entrepreneurs. Although the numbers might not be that stunning when you read them in percentage, this is 8.05 million female entrepreneurs.
Also Read: Know about Udyogini: An Entrepreneurial Scheme for Women
Business Loans to Run Beauty Parlour
Women who wish to operate and open their beauty parlours, spas or salons can apply for a business loan in India. The loans are available to build or buy parlours, spas or salons. The loanee can also use the funds to purchase the necessary equipment or tools for running her business. The borrower can also make use of the money to pay for expenses of the day.
The applicant's age should be a maximum of sixty years and a minimum of twenty years. Some of these loan plans offer loans with no collateral, and the rates of interest and repayment terms differ from bank to bank.
Business Loans for Food Catering Restaurants and Businesses
Someone looking to start a restaurant or foodservice business may apply for this loan to accomplish exactly that. It is possible to either establish a restaurant professionally or even start a simple tiffin company and can avail of the loan to finance this. The age bracket is 18-60 years old to be eligible for the loan.
There isn't a need for any collateral. The time frame for repayment is lengthy, and the interest rates are also very lucrative. This allows those interested in applying for loans to fulfil their desires.
Business Loans for Children Day Care Centres
Women can apply for loans to start the first daycare or preschool centre for children. The lender may use the money to set up the nursery besides purchasing the necessary equipment. Again, the age bracket is 18-60 years old to be eligible for the loan.
SME Easy Business Loans for Women
SMEs that women run are seeing a rise. In this regard, SME business loans for women can be used to assist women in achieving their goal of owning their own companies. The repayment time on these loans can usually be more than the other loans.
Business Lending Against Property
Women aged between twenty-one to seventy can get these kinds of business loans with low-interest rates. These loans are usually short-term loans or overdrafts to businesses run by women in the country.
The number of loans that banks offer can differ on the nature of the sector, i.e. manufacturing, service, corporate, etc. The interest rates for these loans are extremely low, and the repayment time is also quite lengthy. Also, once you establish your business, no matter which niche you select, avoid any online transaction fraud when you receive payments online.
Best Loan for Women Entrepreneurs in India
Here are the best women entrepreneurs' loan programs for business, which provide loans of up to ₹25 lakhs to female entrepreneurs who want to start their businesses.
1. Oriental Mahila Vikas Yojana
In this Loan Scheme for businesses, the Oriental Bank of Commerce gives credit to female entrepreneurs who, either person-wise or jointly, are the owners of an entity that is a sole proprietorship and has 51% of the capital. In the Oriental Mahila Yojana for Vikas, which is for women entrepreneurs, they can avail of loans from the amount of ₹10,000 to ₹25 lakhs for industries that work on a small scale.
Therefore, no security is mandatory for the loan. Women entrepreneurs can take out loans and repay them over seven years. The loan's interest rate is around 2%, and some female entrepreneurs also enjoy interest rate concessions.
2. Sukanya Samriddhi Yojana
Under the SSY Loan Scheme for businesses, the loans are offered to women who start companies from small businesses. This could include tuition centres and tailoring units, beauty salons, etc. Women can also avail Mudra Card upon giving the loan. The Mudra Card can function similarly to the credit card, and it will come with a maximum amount of 10% of a loan. Additionally, the loan amount available is about ₹50,000 to ₹5 lakhs.
3. Udyogini Scheme
Under the Udyogini Scheme, ladies aged 18 and 45 can opt for loans up to ₹1 lakh. Also, loans are available for those individuals working in agriculture, small-scale entrepreneurs and the business retail sector. In case the yearly earnings of a woman's household are lower than ₹45,000, then she can take advantage of loans through the Udyogini scheme. A 30% subsidy is also available for loans of as much as ₹10,000.
4. Bharatiya Mahila Loan From Bank For Businesses
Bharatiya Mahila commercial loan from banks is available to women entrepreneurs who wish to launch an enterprise from the property or SME that deals in retail. Also, ladies from entrepreneurs are granted an amount up to ₹20 crores. A rebate of 0.25% is also provided in this scheme for business loans. An interest rate for the loan is typically 10.15% (PA) or higher.
5. Dena Shakti Scheme
The Loan Scheme from Dena Shakti is an ideal scheme for women entrepreneurs looking to expand their businesses in manufacturing, stores, agriculture or micro-businesses and require financial help. Female entrepreneurs can avail of up to ₹20 lakhs at a 0.25% interest rate. The loan can easily be returned to the bank with every month's payment of instalments.
Also Read: Government Loan Schemes for Small Businesses In India
6. Annapurna Scheme
In the Business Loan Scheme- women entrepreneurs are encouraged to start catering businesses to sell packaged food items, breakfast, etc.
Under this scheme, a loan amount of up to ₹50,000 is provided to female entrepreneurs through the State Bank of Mysore. Ladies can pay this in monthly instalments and last for 36 months. Loans are given to meet the most basic needs of a female entrepreneur.
7. Cent Kalyani Scheme
Suppose Indian ladies are looking to begin a new business venture or modify it. In that case, the Central Bank of India offers women the chance to benefit from this DHS Loan Scheme for Businesses. Entrepreneurs may take a loan for women included in business ventures such as medium and small industries, agriculture, self-employment, or retail trade. Also, women entrepreneurs don't require a guarantor to get loans, and the highest amount is the amount of ₹1 lakh.
8. Stree Shakti Packages
This business Loan Scheme will make women entrepreneurs successful as they can receive a discount on the loan amount. If the loan amount for an entrepreneur woman is greater than the amount of ₹20 lakhs, it offers the benefit of a 0.50% for the interest rate. The Indian central government has operated the Stree Shakti Packages. Through all locations that are part of SBI Bank.
9. Mahila Udyam Nidhi Scheme
Punjab National Bank announces Mahila Udyog Nidhi Yojana as a perfect scheme of business Loans for women. This scheme aims to offer loans to women-owned enterprises in industries that work small-scale. Female entrepreneurs repay several loans over 10 years. A variety of schemes for loans are available under the scheme of Mahila Nidhi. These include beauty parlours, auto-rickshaws and daycare centres. The maximum amount of loan available under this scheme is the amount of ₹10 lakhs.
Comparison of the 5 Most Popular Loan Programs for Women Entrepreneurs – 2023
|
Comparison Criteria |
Cent Kalyani (Central Bank of India) |
MUDRA Loan |
Shringaar / Annapurna (SBI) |
Synd Mahila Shakthi (Canara Bank) |
Shakti Scheme (Bank of Baroda) |
|
Eligibility |
Women over 18 years of age with no income ceiling for assistance |
Minimum 18 years & Max. 65 years |
Applicant age between 20 to 60 years for Shringaar, 18 to 60 years for Annapurna |
Women entrepreneurs with adequate knowledge /experience of business activity |
Women entrepreneurs with >50% ownership of business enterprise |
|
Max. Loan Amount |
Up to Rs. 100 lakh |
Up to Rs. 10 lakh |
Up to Rs 10 Lakh for Shringaar/Up to Rs. 50,000 for Annapurna |
Up to Rs. 5 Crore |
Up to Rs. 20 Lakh for retail trade, education, and housing. Rs. 50,000 under micro-credit schemes |
|
Loan Term |
1 year to 7 years |
Term Loan / Overdraft |
7 years (Shringaar)/3 years (Annapurna) |
Maximum of 10 years including moratorium period |
Varies based on the loan amount and other factors |
|
Interest Rates |
7.40% onwards |
As per applicant’s profile and business requirements |
As per the bank’s criteria |
0.25% below base rate for loans over Rs 10 Lakh, lesser amounts at a base rate |
0.25% below base rates for women applicants who are majority stakeholders in the company |
|
Processing Fee |
Nil |
Nil |
Varies based on factors such as loan amount |
Nil |
Nil |
|
Additional Features |
No collateral/third party guarantee required Hypothecation of all stocks and assets created from the bank’s fund is required as security |
No collateral/security is required from any lender Concessional interest rates for women borrowers Debit card available named as Mudra card |
Shringaar features tie-ups with Naturals, Cavinkare, and Lakme Ltd. Both Shringaar and Annapurna are collateral-free and are covered under CGTMSE |
Free credit cards with No Third-party guarantee for loans under the purview of CGMSE |
Microcredit and retail stores are also eligible along with enterprises operating in the agriculture and allied sector |
Alternative Financing Options for Women
Following are the alternative financing options that women can look for:
Small Business Grants for Women
While debt financing is likely the most convenient option for female-owned businesses to get funds, it's certainly not the only option. Female entrepreneurs could choose to investigate other options for financing in addition, like equity funding or smaller business loans.
First, a business grant will be "free money" since you will not need to repay the grant as you would for a loan. However, they are more restricted than small-business loans regarding qualifications and what you can use the money for. But, according to your financial needs, you might want to look into the grants available in the market, especially because there are grants specifically for women's businesses.
VC Firms and Angel Investors for Female Entrepreneurs
Instead of requesting an enterprise loan or looking for grants, it is also possible to consider equity financing. Equity financing occurs when the business owner seeks out funds via venture capital (VC) companies and investors.
In exchange for capital, investors will receive an amount of equity in your company. Partnering with an investor could be ideal for those who require enormous capital to launch an entirely new venture or expand their existing business. You can also get some business advice from investors as you go along.
But, finding the perfect investor can be difficult.
Conclusion
Finding financing for woman-owned enterprises may be difficult, but it's not impossible. Some lenders provide many alternatives that are geared towards female-owned businesses.
Now, it's time for you to apply for the loan and receive the cash if a nice business idea is buzzing in your mind. Also, handling a business requires calculations, and a manager for that job might cost you a lot! Instead, a free solution like Khatabook is ideal.
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