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Loan For Women Entrepreneurs

Posted: 23rd May, 2022

Updated: 8th February, 2023

Written by -

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What are the eligibility criteria for loans for women entrepreneurs?

It is crucial to produce all the original and relevant documents to support the business loan application. This will help the applicant to maintain the authenticity of their application.

Below is the prerequisite set of eligibility criteria to be kept in mind while applying for business loans:

  • The women entrepreneur must be within the age group of 23 years to 65 years at the time of applying for a loan
  • The annual turnover of the professionals or self-employed individuals should be more than 10 lakhs
  • In the case of the sole proprietorship or private limited companies, the annual turnover should be more than 20 lakhs
  • The applicant should have completed a minimum of 3 years in business to be eligible for a loan for women entrepreneurs

Features of loans for women entrepreneurs

The loan for women entrepreneurs comes with a comprehensive list of features that ultimately lead to several benefits. One of the most renowned features is the flexible payment option. The applicant, while applying for a business loan for women, must understand the following instructions:

  • As per the business loan terms and conditions, the applicant’s business should generate the minimum income.
  • It is compulsory to have the business registered.
  • The business must own a registration certificate.
  • The funds disbursed by the insurance agency must, specifically, be used for the purpose it was availed.
  • The agency can take legal action wherein there is any illegal activity such as cheque bounce, misappropriation of funds, etc., it is all punishable as per the provisions of the law.
  • While applying for the business loan for women, the applicant needs to compulsorily declare their ongoing loan agreements (if any) to help the agency accurately assess its creditworthiness.
  • The duration of the business loan provided is between 12 months to 60 months. The business loan for women's interest rates starts at 15% p.a. As every business need is different, the profile of the applicant is carefully assessed before arriving at a final interest rate.
  • The processing fees charged are as low as 2% of the business loan amount. The closure charges to be levied after a 6-months range between 3% to 6% The loan for women entrepreneurs can be availed of for a sum ranging from one lakh to a hundred lakhs.
  • For the payment, the applicant can set up the ECS, which will automatically help debit the monthly EMI from their account.
  • This feature ensures there is no miss or delay from the applicant’s end and payment is made timely.

What are the documents which are required to be submitted while applying for business loans for women?

The legal documents must be self-attested by the applicant while filling the application for a loan for women entrepreneurs.

The following documents are required for authentication & assessment:

  • Valid Identity Proof, such as Pan card, Aadhar card, Voter ID, and Driving Licence Valid address proof, namely the gas bill or the electricity bill
  • Recent colour photographs
  • Bank statements for the last 6 months
  • Trading/ Profit and loss of the previous 3 years of business
  • The balance sheet of the previous 3 years of business
  • Electronic clearing mandates (ECS) along with post-dated cheques Proof of income
  • Any other document as requested by the agency at the time of verification/application

Advantages of loans for women entrepreneurs

The women of today are unstoppable. There is a sea of ideas and opportunities thriving in their minds that they wish to accomplish. To support their vision and dreams, finance/capital is one factor that needs to be taken care of. The following points highlight the major advantages offered by loans for women entrepreneurs:

  • Reducing the risk of cash flow - At the start of the business, it is crucial to build a solid foundation of capital. For a business to operate successfully, working capital requirements need to be met. The environment is quite dynamic and is affected by several internal and external factors. There is a risk of low or no demand for the services/goods, leading to fluctuations in cash flow. A loan for women entrepreneurs helps business leaders bring things into order and tackle the changing business environment strongly.
  • No penalties for early repayment of the loan or hidden costs - Since the loans are very business-friendly, there is no penalty levied if the applicant wishes to make an early payment. This makes room for the business leader to clear off all their dues at once after paying for the first EMI. Other than the above, apart from the 3% processing fees, there is no other cost involved. So in totality, the cost of applying for a business loan for women is quite affordable.
  • Open the doors for higher funding - The women leaders can rest assured that once their business gets going, it allows them to create and maintain goodwill in the market. If in the future there lies a scope for business expansion, then it becomes convenient for them to seek funding for the same. Once a good reputation is developed, the agencies do not worry much about creditworthiness. Instead, it will allow the business to expand in more diverse regions.
  • Ease of application - The loan application can be completed from anywhere and at any time. The process is quite seamless and hassle-free. The business loan EMI calculator available online helps the applicant to compute the monthly equated payments and see if it fits their pocket. The calculator is simple and free to use. The business owner can work around different scenarios before finalizing the amount of the loan.

Hence, with such an attractive range of benefits, the women entrepreneurs should move ahead and shine a green light on their dreams!

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