Top five benefits of getting a business loan for women from NBFCs

Women’s participation in Indian business is meager. This gender gap is especially apparent in small businesses where women only run 13% of businesses. Financial inclusion based on gender is often discussed, and access to credit is an obvious way of achieving it. In NBFCs, woman entrepreneurs can find an accessible and user-friendly source of funds.

business loan for women

1. Preferential interest rates

Many NBFCs offer a preferential business loan interest rate to women applicants. It is part of an industry-wide practice to encourage more participation of women in businesses and financial matters. Apart from business loans, products, like home loans, also offer discounts on the interest rate in the case of a woman applicant. Even a slight reduction in the business loan interest rate can significantly borrow cost savings for woman entrepreneurs.

2. Facilitates the government’s women-centric credit schemes

NBFCs are eligible to offer most women-centric schemes promoted by the government. For instance, NBFCs can provide MUDRA loans to woman entrepreneurs under the refinance scheme. NBFCs providing loans to women entrepreneurs can avail and pass on the benefits of the MUDRA scheme for working capital loans of up to Rs. 10 lakhs.

3. Better than non-formal sources

Most SME businesses, including women-run businesses, rely heavily on non-formal sources of finance for their business needs. Apart from high business loan interest rates, this method also doesn’t guarantee any improvement in their credit score. By opting for a business loan from an NBFC, the repayment history of businesswomen is documented, and their credit history can improve. This can help them avail of bigger business loans in the future, should the need arise.

4. Quick loan processing

Almost all lenders are transitioning towards a digital presence. This has quickened the turnaround time in loan applications. With NBFCs, women entrepreneurs are almost certain to get a faster business loan approval and disbursement. The paperwork is digitized, and the credit score is checked online by the processing team to check the business loan eligibility, leading to a reduction in the time taken.

5. Collateral-free loan options

Business loans are offered without any collateral as the borrower’s credit history and repayment capacity are the primary criteria for loan approval. A woman applying for a business loan with an NBFC doesn’t need to furnish any security-related documents, thus making it easier for her to avail of loans. For a woman who has just started her business, a business loan is one of the fastest sources of cash for her business’s initial financial needs.

As a woman entrepreneur, it is best to approach an NBFC for the business loans on offer and inquire about its benefits. Choose a partner who is instrumental in the growth and success of your business.

Jason B. Barker

Social media expert. Student. Music advocate. Travel aficionado. Bacon scholar. Skydiver, risk-taker, hiphop head, Eames fan and Guest speaker. Acting at the intersection of design and purpose to develop visual solutions that inform and persuade. I am 20 years old.