Have you dreamed of starting your own business? Is there an idea in your mind that can make you the next Ambani or Tata? If the answer is yes, then you know that the most important thing needed to start a business, apart from the idea, is capital.
Any business requires some initial investment. It might be used to set up an office or to buy the raw materials or some machines or even to pay the employees. And even if your idea is really good and your business takes off, there is still some time at the beginning where you need to spend money from your own pocket.
What do you do if you do not have the capital? The answer is business loans. Business loans can be a lifesaver for those who want to start a business and even for those who need a little help running the business.
Business loans are offered by banks with little or no collateral and with competitive rates. These loans can really help tide you over when you are having a financially difficult time.
Why Are There Business Loans for Women?
Traditionally, business has always been considered a man’s domain. But with changing times, this notion is also changing. Successful women entrepreneurs have shown everyone that they can run a business just as well, or perhaps even better than men.
But quite a lot of times, women find it difficult to get the capital needed to start a business. There is a popular misconception that women cannot handle money well and so, any business run by a woman is bound to fail.
Indra Nooyi of Pepsico, Vandana Luthra of VLCC, Shahnaz Husain of Shahnaz Herbals are all proof that this notion is as far from the truth as possible.
As per the Mastercard Index of Women Entrepreneurs 2018, India was ranked 52nd out of the 57 countries in terms of women’s ability to find capital to start a business.
It was ranked only higher than Iran, Saudi Arabia, Bangladesh, Egypt, and Algeria. This is a sorry state of affairs. This low rank is due to lack of a supportive environment, lack of financial assets and knowledge, and also due to the level of bias against women in the workforce.
But the good news is that the government and banks are aware of this situation and they are trying to rectify it by offering business loans for women. These loans have lower interest rates, lower collateral requirements.
Business Loan Schemes Available for Indian Women
Here are 5 business loan schemes for Indian women entrepreneurs being offered by different banks and the Indian government.
This loan is offered by the State Bank of India. It is available only to those women who own at least 51% of the capital.
– You can avail loans up to INR 25 lakhs.
– If the loan amount is less than INR 10 lakhs, then no collateral is needed. Eligible units may be covered under CGTMSE, or others, collaterals should be provided. Apart from business women, women who are working as chartered accountants, beauticians, doctors, and architects are also eligible for this loan.
– You should have taken part in the Entrepreneurship Development Programmes or EDPs organised by state-level agencies.
This loan offered by Dena Bank targets those women who want to start a business in the manufacturing or agricultural sector. They offer loans for retail trading, education and housing, and also micro-credits.
– You can avail loans up to INR 20 lakhs for retail. Under the micro-credits program, you can avail up to INR 50,000.
– Women get a concession of 0.25% on the interest rate.
This scheme was launched by the Central Bank of India to help women start new businesses and also expand or upgrade their already existing businesses.
This is offered for Micro and Small enterprises that are engaged in manufacturing and service activity for e.g. Handloom weaving Handicraft, Food-Processing, Garment making, Professionals & Self-employed women, Doctors, Chartered Accountants, and Engineers or trained in Art or Craft etc. Beauty clinics, Fashion Designing, Beauty Parlours, Canteens, etc.
– The maximum loan amount that can be obtained from this scheme is INR 1 crore.
– There are no processing fees
– Margin required is 20%.
– There is no need for collateral and guarantor as the loans are covered by Guarantee cover of CGTMSE.
This scheme was launched by the Government of India with the aim of encouraging more women to start their own businesses.
This loan can be availed by a business owned by a single woman or a by a group of women. The loan is available under three schemes, each targeting businesses at different stages of development.
Shishu scheme is for businesses that are just starting and the maximum amount available is INR 50,000.
Kishor scheme is for businesses that are well-established and the loan amount ranges from INR 50,000 to INR 5 lakhs.
Tarun scheme is for well-established businesses who want to expand their operations. The maximum loan amount available under this scheme is INR 10 lakhs.
– The scheme is launched by the government in collaboration with different banks.
– The loans are tailored to meet the requirements of the business depending on how established it is.
– Once the loan is granted, you will be given a Mudra card. This card functions like a credit card, with the limit being 10% of the loan amount.
– The loans do not require any collateral.
– The interest varies depending on the banks from where you avail the loan.
This scheme is offered by Punjab and Sind Bank. The aim was to provide loans on liberal terms to women entrepreneurs engaged in agriculture activities, tiny sector, retail trade, professionals and self-employed.
The enterprises eligible for a loan under this scheme should have at least 51% shareholding by women shareholders.
– For loans up to Rs. 25,000, margin money is not required
– For loans up to Rs. 25,000 collateral is not required
– There will be no processing fee
Now that you know of all these business loans for women, you do not have an excuse to not chase your dreams.
If you want to avail any of these schemes or want to know more details about it, visit deAsra.in. They can also help you in starting your business, marketing it, and improving the overall performance.
Ekta Shah is a part of the content & marketing team at deAsra Foundation a not for profit organization that aims to enable entrepreneurs to start, manage and grow their businesses. Entrepreneurs often face challenges getting enough support, training and guidance on a continuous basis. deAsra supports aspiring or existing entrepreneurs on their journey with a broad array of support services.
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