Overcoming Challenges: Advantages of Loans for Women in Business

In today’s age, women-owned companies are extremely important. They offer equal opportunities in various sectors, build the economy, and increase the employment rates. These businesses may range from parlours and boutiques to retail shops and professional services. As the Indian government started recognising female entrepreneurship, the variety of opportunities has also improved. However, women-owned businesses still face a lot of challenges in the business world, a lack of finance being the most prevalent. 

A loan for ladies for business offers several advantages that help women entrepreneurs overcome challenges. Let’s explore how.

No Collateral Requirement 

Female entrepreneurs often approach family and friends for business funding. The ratio of Indian women owning properties is still low, so they cannot access traditional Business Loans that need collateral as security. 

In such a scenario, unsecured SME loans for women come to their rescue from financial institutions like Lendingkart. Aspiring borrowers can obtain the required funding without pledging an asset as collateral. It is a beneficial funding option for women who do not own an asset or want to put it at risk. Borrowing an unsecured Business Loan ensures that the borrower’s savings and assets are kept intact while providing funds required for business operations.

Ample Loan Amount

In secured Business Loans, the Loan-to-Value (LTV) ratio depends on the collateral’s value. However, in the case of an unsecured Business Loan, ladies can borrow an ample amount according to their eligibility, credit history, and repayment capacity.

Reasonable Interest Rates

Conventional Business Loans usually have high-interest rates that female entrepreneurs usually cannot afford. If they default on EMI payments, the situation worsens, leading to bigger losses. Moreover, the SME loan interest rates are fixed and do not change with market fluctuations or the global economy. As a result, the EMIs remain the same throughout the tenure, making them easy to plan and manage upfront.

Flexible Repayment Terms

The way borrowers utilise their limited funds is crucial, especially during the early stages of the business endeavour. If a small business owner has a low budget, making EMI repayments on time might sometimes become challenging. 

In this case, a small business loans for women offers flexible repayment terms, allowing them to choose a tenure with budget-friendly EMIs. One can opt for a longer tenure to keep the EMIs easily manageable and ensure timely repayment. Moreover, they can allocate the surplus funds towards business growth instead of focusing on loan repayment.

Minimal Documentation

Due to less time and resources, female entrepreneurs often lack documentation or find proper management challenging. For instance, if they apply for a shop loan, they prefer to focus on their set-up and operations instead of arranging the necessary paperwork. Small Business Loans for women have minimal documentation requirements. Moreover, they allow online documentation submission from the comfort of home, making the entire loan process easier, faster, and more manageable. 

Quick Disbursal

As a female entrepreneur, one may find it challenging to grab every opportunity coming their way. Moreover, many business needs are sensitive to time limits, requiring fast loan processing, approval, and disbursal. The situation becomes harder for women who already have limited funds and resources. 

While conventional Business Loan providers take weeks to approve loan applications, SME loans from NBFCs make loans available much faster due to fintech features and automated systems. Modern finance companies with advanced processing systems are great for the purpose as they conduct the entire application, verification, approval, and disbursal procedure in a few hours.

Opportunity to Build Credit Score

A credit score is one of the most important parameters for entrepreneurs looking for Business Loans. Lending institutions always check this score to determine an applicant’s creditworthiness, repayment habits, and chances of default. That said, most women never use credit, which means they have no or a very low credit score. 

By borrowing a loan for business for women with a low credit score requirement, they get an opportunity to build their credit score and improve their eligibility for more loans in the future. It overcomes the challenge of financial constraints due to a low credit score. 

Increased Independence

An SME loan for women can help them become financially independent, which is a challenge for a large percentage of Indian women. With a loan for business for women, they no longer need to depend on their families for financial support. They can re-invest their money into the business to grow the enterprise and achieve their desired success.

SME loans for women are designed to fulfil their financial requirements while considering the challenges they usually face. They are convenient and affordable financing options for female entrepreneurs while guaranteeing ample loan amounts, reasonable interest rates, and credit-building opportunities. While respecting the time and privacy of a female entrepreneur, many lending institutions support 100% digital loan procedures that save branch visits and physical documentation. 

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