How to Get a Small Business Loan: Tips for Female Entrepreneurs


Meeta, a nut and seed butter business owner, started her business four years back. Earlier she used to sell them on a subscription basis. But now she wants to scale it to retail touch points. She even plans to diversify into seeds oil – flax seeds, black seeds etc. given the popularity of alternate medicine. Preserving fresh nuts and seeds, and the final product without the use of preservative, is a challenge. Therefore, Meeta requires funds for purchasing storage units, machinery, and promotion. She would also need a larger commercial set up and therefore, a loan for various business needs, but not all together.  A study done by Karnataka showed that around 90% of women rely on only their own funding. Around 68% found it difficult to get business loans for womens from banks.
Female entrepreneurs can easily get flexible business loans from NBFCs like Bajaj Finserv. They can borrow as they need and repay as they can. Loans from NBFCs can help boost women entrepreneurship in the country.

Here Are Some Tips to Get a Small Business Loan for Women

Choose A Flexible Loan for Woman Owned Business
Flexible business loans provide a pre-approved credit line for a specified period. Women owned businesses can borrow as much as required for their varying needs. The interest will be applicable only on the borrowed sum, not the whole credit line.
For example: For a credit line of Rs. 10 lakh, if Rs. 5 lakh is borrowed, the interest will be applicable only on Rs. 5 lakh.
In the given case, Meeta can borrow funds several times, for different needs, as long the credit line is not exhausted. This will keep her interest payout lighter. With a nominal business loan interest rate, she will be able to meet her business needs.
Bajaj Finserv flexible business loans for women have only the interest component as the EMIs. The principal can be repaid at the end of the loan tenor. This keeps the monthly payouts lighter.
Have Adequate Cash Flows
Processing of loan application is smoother if the women owned company has a positive cash flow. The lenders assess the liquidity ratios of the company. The current assets should be higher than the current liability. The current ratio, and the debt service coverage ratio should be more than 1, and it should match the industry standards.
Sound Business Model
The women entrepreneur should have a solid business model, to get a business loan. A list of current clienteles, and projects in the pipeline is helpful. The lenders might be interested in the marketing campaign plan, and projected sales.
Opt for Collateral Free Business Loans for Women
NBFCs provide collateral free business loans. These loans require less documentation, and therefore they can be approved within 24 hours. The women owned business need not bother about pledging guarantee, or finding a guarantor.
Check the Eligibility Criteria and The Document
Before applying for the loans, the company owned by women should peruse their eligibility criteria. Secondly the documents should be in place, to avoid cancellation of loan application.
Also Read: Know The Benefits of Business Loan For Womens
For example, Bajaj Finserv requires the following criteria to be met:

  • Age range 25-55 years
  • Minimum business vintage 3
  • Income Tax returns must have been filed for at least the previous 1 year
  • Business turnover should have been duly audited by a CA

Some of the documents required are business proof, KYC, and relevant financial documents.
With these tips, business women can get their loans approved easily. They offers loans for woman owned business up to Rs. 30 lakh for a tenor of 12-96 months. Connect with them to avail loans. Loans from them can be managed on the portal Experia. E-wallet makes borrowing, and repaying a lot easier.

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