For a couple of years women entrepreneurs have started making some contribution to the Indian economy. In order to encourage the women entrepreneurs in the country, multiple banks and financial institutions have been extending financial help. Many nationalised public and private sector banks have launched several loan schemes to help women startups.
Business loan interest rates charged by lenders for women entrepreneurs are lower. Other benefits include, reduced EMIs, discounted processing fees, collateral-free business loan, credit guaranteed by the government, higher loan amount, longer repayment tenure, and a lot more.
Here are some of the best business loan options for women entrepreneurs:
1.Shringaar and Annapurna schemes of Bhartiya Mahila Bank Business Loan
Bhartiya Mahila Bank has launched a variety of loan schemes to fund women entrepreneurs for setting up a new business or expansion of an existing venture. Shringaar and Annapurna are two of the most popular schemes of Bhartiya Mahila Bank business loan.
BMB Shringar Scheme: Women who want to set up a beauty parlour, Salon or Spa can get financial help from Bhartiya Mahila Bank under this scheme. This is a collateral free loan covered under CGTMSE scheme.
Features of BMB Shringar
- Age limit: Applicant aged between 20 years and 60 years.
- Repayment tenure: Up to 7 years
- The bank has tie-up with Lakme, Naturals and Cavinkare
BMB Annapurna loan scheme: Women entrepreneurs who are interested in establishing a catering business for selling lunch packs can get financial support under BMB Annapurna loan scheme. Collateral Free to be covered under CGTMSE
Features of BMB Annapurna
- Age limit: Minimum age of the applicant is 18 years and max 60 years.
- Repayment tenure: Up to 3 years
2.Cent Kalyani from Central Bank of India – MSME Loan
In order to help ambitious women who want to start a new business or expand the current one, Central Bank of India offers financial assistance under Cent Kalyani loan scheme. The bank offers a loan to business women engaged into rural and cottage industries, entrepreneurs, MSMEs and women working in farming and retailing, as well as government-backed firms. The fund can be used to meet daily business requirements, such as the purchase of machinery/ equipment and plant, as well as working capital expenses. Processing charges are not applicable on the loan amount.
Central Bank of India offers a business loan up to Rs. 100 lakh for business women.
- Stree Shakti Package from SBI
State Bank of India has launched Stree Shakti Package or Stree Shakti Tractor Loan for women-owned businesses at competitive interest rates.
Features:
- Attractive interest rates: Interest rates starting from 11.20% onwards (p.a.)
- Unsecured business loan: No need to submit collateral to get the loan.
- Flexible repayment tenure: Up to 36 months, including 1-month moratorium period
4.Synd Mahila Shakti from Canara Bank
Syndicate Bank offers a business loan to open a new business or expand existing business under Synd Mahila Shakti. The loan can be availed to meet the working capital requirements of a new business or existing business. They can also get a term loan for up to 10 years. In order to get a business loan, one or more women should be the business owner(s) with at least 50% of the financial holding.
5.Shakti Scheme from Bank of Baroda
Women entrepreneurs active in business activities in several sectors like retail trade, micro credit, education, housing, manufacturing, service sector, and enterprises in the direct/indirect finance can get a business loan under Shakti Scheme from Bank of Baroda. The maximum loan amount varies based on the nature of a business i.e. the sector in which it operates. Processing fee is not applicable on the loan amount and rebate of 0.5% on loans up to Rs. 5 lakh.
6.Mahila Udyam Nidhi Scheme from Punjab National Bank
Punjab National Bank and Small Industries Development Bank of India (SIDBI) offers Mahila Udyami Scheme for women entrepreneurs to finance a new business or existing venture.
Features of the scheme
- Loan amount up to Rs. 10 lakh
- Repayment tenure up to 10 years
- Competitive interest rates based on the prevailing market rates
- A 5-year moratorium period
- Financing for upgradation and modernisation of the existing projects
7. Dena Shakti scheme from Dena Bank
Dena Bank offers a business loan to women entrepreneurs active in the fields of manufacturing, agriculture, micro-credit, retail stores or small enterprises.
Features of Dena Shakti scheme
- Business loan up to Rs. 20 lakh
- 25% discount on interest rate
- A business loan of Rs. 50,000 is offered under the microcredit category
Features of small business loan for women
- Interest rate: Discount on business loan interest rates varies from bank to bank.
- Loan amount: No minimum amount limit, maximum loan varies from lender to lender.
- Interest Rate: Discounted for Women Borrowers, varies from bank to bank.
- Repayment tenure: Between 12 months and 5 years.
- Loan type: Term loan (Short or long term), working capital loans, usually unsecured loans
- Fees or service charges will vary from lender to lender
Documents Required for business loan for women
- Crisp and clear business Plan
- 2 Recent passport-size photographs of the applicant and co-applicant, if any
- Identity proof such as driving license, voter’s ID card, PAN card, passport, Aadhaar card, etc.
- Address proof such as passport, utility bills (for the latest 3 months), Aadhar card, voter’s ID card
- Income Proof: Bank statement
- Business address proof
- Bank statement for the last 6 months
- Last 1-year ITR
How women entrepreneurs can apply for a business loan
You can apply for the business loan either by visiting the nearest branch of the respective bank or on the bank’s official website. All you need to do is fill in a business loan application form of the loan scheme and submit required documents.
Eligibility Criteria for startup business loans
- Age Criteria: Women aged between 18 years and 65 years
- Citizenship: Indian citizens with no criminal background
- Credit history: Applicants who have not defaulted on the loan previously shall be considered
- Business type: Individuals, MSMEs, sole proprietorship, partnership firms, limited liability partnerships (LLPs), engaged in trading, manufacturing and services sector can apply for the loan
- Annual Turnover: Shall be defined by a bank or lender
- Business existence: for a minimum of 1 year and with profit
Conclusion
Multiple banks are offering loans to women entrepreneurs who aspire to expand their existing business or start a new business. Business loan interest rate is much lower for women startups.
