Get Access to our Small Business Loans for Women!
There has been a significant rise in the number of female entrepreneurs across India. This is a sure-fire sign of a liberal, progressive, and prosperous economy because there are numerous provisions & significant avenues of financial aid for women business owners in the country.
According to the Sixth Economic Census in 2018, there are over 8.05 million female entrepreneurs in India. Business loans for women offer significant financial freedom to these budding female go-getters. The easy availability of business loans at attractive interest rates & flexible repayment options act as substantial incentives for budding women entrepreneurs to turn their dreams into reality.
What is a Business Loan for Women?
Business loans for women are loans for women-led enterprises. They come with attractive features and structures that make availing them simple & straightforward for businesswomen. Designed to meet a myriad of business needs, small business loans encourage women entrepreneurs to take their initiatives forward without worrying about working capital, debt, or other financial trouble.
Small Business Loans for Women Entrepreneurs
Small business loans for women entrepreneurs are lucrative and convenient financing options as they come with attractive interest rates, zero collateral needs, flexible tenures, and a host of handy features. The primary aim of all these loan schemes is to encourage female entrepreneurs and lend any financial support necessary to lead a business to success.
Below are seven of the best business loans for women in India.
Best Business Loan Schemes for Women Entrepreneurs
1.Cent Kalyani from the Central Bank of India
The Central Bank of India offers the Cent Kalyani Scheme for female-led start-ups and small businesses in the rural & cottage industry, farming, trade retail, and MSME sectors.
This scheme is specifically designed for women entrepreneurs and can act as seed funding for kick-starting & expanding businesses. The Cent Kalyani scheme offers collateral-free business loans for women with zero processing fees and no need for any guarantors.
The key features of this loan scheme are as follows.
- Available loan options are cash credit, letter of credit, term loans, working capital loans, overdraft, cash credit, letter of guarantee, etc.
- No need for any collateral or third-party guarantee
- Risk coverage by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGFTMSE)
- Interest rates range between 7.35% to 8% per annum (7.35% for loans up to Rs. 10 lakhs, 7.65% to 8% for loans above Rs. 10 lakhs)
- The maximum loan amount to be availed is Rs. 1 crore
- Additional insurance options for stocks, machinery, equipment, etc.
- Women entrepreneurs and government-backed firms in the cottage, farming, retailing, and MSMEs are eligible.
2.Mudra Loan under PMMY
The MUDRA(Micro Units Development & Refinancing Agency) scheme under the Pradhan Mantri Mudra Yojna is another prominent avenue for obtaining a small business loan for women entrepreneurs.
Common partnership firms include public sector commercial banks, non-banking financial institutions, micro-financing institutions, regional rural banks, and cooperative banks. Under the MUDRA loan scheme, women business owners can borrow upto Rs. 10 lakhs to build or expand. There are three variations or categories of this scheme, namely, Shishu (for loan amounts up to Rs. 50000), Kishor (for loans between Rs. 500001 and Rs 5 lakhs), and Tarun (amounts from Rs. 5 lakhs up to Rs. 10 lakhs).
Key features of this loan scheme include:
- Zero processing fees for the Shishu and Kishor categories; 0.50% plus taxes for the Tarun category
- Businesses in the manufacturing, trading and services sector are eligible
- No need for any collateral
- Maximum loan amount up to Rs. 10 lakhs
- Repayment tenures of up to 5 years
- Female-led businesses in both rural and urban regions are eligible.
3.ICICI Bank – Self Help Group-Bank Linkage Programme (SBLP)
The Self-Help Group Bank Linkage program is the ICICI bank’s Agriculture & Rural Branch initiative. It helps self-help groups in rural regions engaged in micro & small-scale industries such as animal rearing, handicrafts, zari work, tailoring, cottage industries, NGOs, etc.
Self-help groups are collectives of individuals in rural regions who do not have formal access to banking institutions. Members of these groups rely upon each other and friends & family for financing support. The Self-Help Group Bank Linkage Program by ICICI assists these groups by linking with NGOs known as Self-Help Promoting Institutions. The banks work with these NGOs to determine the creditworthiness, record keeping, bookkeeping practices, rotation of funds, and other crucial parameters to assess financial health & repayment capabilities.
- Self-help groups must have been in existence for at least 6 months.
- Groups of 10-20 women are eligible.
- The group/micro-enterprise must possess a minimum savings of Rs 5,000.
- There must be an acceptable level of financial, working, and administrative discipline in the operations of the SHG.
- The ICICI bank offers a maximum loan of up to Rs. 10 lakhs.
- No need for any security or collateral
- The maximum repayment tenure is of 3 years
- Interest rates range between 7% and 21.5%, with a mean rate of 14.6%
- Zero prepayment charges
- Processing fee applicable if (the total sanctioned amount / the number of members in the SHG) is more than Rs. 25000. The rate charged is up to 2% of the sanctioned loan amount.
- Necessary documents include identity of proof of the SHG, address proof of the business, identity & address proof of the applicant, recommendation letter from the block development officer or relevant authority, and signed agreement by all members of the self-help group regarding availing unsecured business loans.
4.Mahila Udyam Nidhi Scheme – Features(PNB)
The Mahila Udyam Nidhi Scheme is an initiative by Punjab National Bank.
This business loan scheme for female entrepreneurs aims to support generally small businesses in the MSME sector by providing quick & hassle-free business loans for working capital, meeting cash flow requirements, or meeting equity gaps.
The Mahila Udyam Nidhi Scheme supports small-scale industries run by women, such as beauty parlours, daycare centres, etc. Working capital loan, upgradation, expansion, modernisation of existing projects, equipment purchase, etc.– this business loan scheme helps women entrepreneurs expand and succeed in their sectors.
The maximum loan amount dispersed is Rs. 10 lakhs, while the maximum loan tenure offered by this scheme is 10 years.
Stand Up India scheme is part of the Indian Government’s Start-up India initiative. The scheme offers business loans for women entrepreneurs in manufacturing, trading, and services. The loan applicant must possess at least 51% of the shareholding and controlling stake for enterprises run by an association.
- Women entrepreneurs above 18 years of age can apply for small business loans.
- Small business loans offered under the Stand-Up India scheme are only available for greenfield projects. Such projects are first-time business endeavours by women applicants in applicable sectors.
- The borrower must have a clean credit history and not be in default at any bank or financial institution.
6.Shakti Scheme from Bank of Baroda (BOB)
This small business loan offering by the Bank of Baroda lends financing support to any women-led small established business. Under this scheme, BOB offers MSME loans to businesses across numerous sectors, including agriculture & associated activities, retail trading, microcredit institutions, education, housing, direct & indirect financing MSMEs, and small and medium businesses in the manufacturing & services sector.
Only women entrepreneurs are eligible under this scheme. The maximum loan amount dispensed is Rs. 50 lakhs through the ceiling amount depends upon the borrowing business’s sector. Zero processing fee and zero collateral, along with flexible repayment tenure, convenient interest rates, and minimal documentation, make Bank of Baroda’s Shakti Scheme an excellent choice for women business owners.
7.KBL Mahila Udyog Loan from Karnataka Bank
Bought to you by the Karnataka Bank, the KBL Mahila Udyog Loan offers small business loans to women entrepreneurs to meet business credit requirements.
Key features of the loan scheme are as follows:
- Eligible applicants include women self-help groups, businesses led by female entrepreneurs, and firms where at least 51% of shareholding & controlling stake lies with a woman entrepreneur.
- Working capital loan amount up to Rs. 2 lakhs; term loan & promissory notes of up to Rs. 10 lakhs.
- Repayment tenure varies between 12 months and 12 months per the loan product.
- CGTMSE coverage is available where applicable.
- The rate of interest is decided upon by the bank as per the loan amount, business creditworthiness, and other key factors.
Business Loan for Women: Feature and Benefits
1. Hassle-free Funding
Minimal documentation, fast disbursal, zero processing fee in most cases, low-interest rates, and the ability to avail of business loans online from leading banks with just a click– the process for getting a business loan for women in India at Yubi is entirely hassle-free.
2. Flexi Facility
Many small business loans are available at Yubi, with flexible repayment options comprising long loan tenure, structured EMI options, and multiple product offerings. All small business loan facilities for women at Yubi have zero collateral requirements.
3. Repay over 7 years
Different loan schemes available at Yubi offer convenient repayment tenures that extend up to 7 years. Alongside easy monthly instalments & low rates, this helps businesses grow & prosper free of any stress or hassle.
4. Minimal Paperwork
Minimal documentation is necessary to avail of small business loan schemes at Yubi. Essential documents include photo identity proof, the last six months’ bank statements, and business proofs such as ITR filings, trade licenses, etc.
5. Pre-approved Offers
Businesses of good repute and credit history can avail of pre-approved offers at Yubi with customised interest rates and comfortable repayment tenure. Businesswomen can also enjoy concessions on their interest rates.
6. 24/7 Loan Management
Monitor all your debt profiles through intuitive visualisations on a single dashboard. Yubi offers a centralised platform for connecting, onboarding, and managing all your business liabilities in one place!
7. Business Growth
Turn your dreams into reality and help your business spread its wings with flexi loan facilities and a wide assortment of business loan offerings for women at Yubi.
Eligibility Criteria Business for Women
Eligibility criteria may vary from one land scheme to another. However, there are generic requirements, which are listed below.
- Applicant’s age bracket to be between 18 years and 65 years
- Clean credit history with zero loan defaults
- MSMEs, female-led sole proprietorships, partnerships & limited liability partnerships with a woman having at least 51% of controlling & ownership stake in the trading, manufacturing and services sectors
- Annual turnovers defined by lending institutions
What are the Documents Required for a Business Loan for Women?
- Applicant’s identity proof as PAN card, Aadhar card, etc.
- Business identity proof includes trade licenses, incorporation documents, ITR filings, GST returns, etc.
- Partnership deed and proof of sole proprietorship
- Six months bank statement
- Profit & Loss Statements and audited balance sheets of the last two years are required by certain banks.
What are the Interest Rates for Business Loans for Women?
Interest rates vary across different schemes. Most small business loans for women facilities come with attractive interest rates starting from around 7 % and depend upon the loan purpose, the business’s creditworthiness, the sector to which it belongs, annual turnovers, etc.
How to Apply for a Small Business Loan for Women
There are multiple ways for a small business loan for women.
- Applicants can visit the branches of lending institutions to apply in person.
- They can go online and apply through the bank’s official website, & if they are opting for government-supported loan schemes, they can apply via respective websites.
- Women entrepreneurs can also apply for varied small business loan schemes from more than 750+ major banks, small finance banks, NBFCs, and financing institutions at Yubi, India’s leading digital corporate debt & investment management platform.
How to Calculate Business Loans for Women EMI?
EMIs for small business loans for women are calculated using the compounding interest rate formulas as follows: E = P x r x (1+r)^n/(1+r)^n-1
where P is the loan amount, r is the rate of interest calculated monthly, and n is the loan tenure in months
Yubi – Best & Quick Women Business Loan Provider in India
Yubi is India’s leading digital corporate debt platform that connects businesses & lenders from all across India. With more than Rs. 1,00,000 crore worth of credit transactions & 3000+ active businesses, this is the place to unlock your business’s full potential.
Yubi offers a unified digital platform for businesses to explore a wide array of convenient loan offerings from 750+ providers and experience a fully-digitised lending cycle from disbursal to monitoring, management & repayment.
- Enjoy a variety of loan offerings at attractive interest rates,
- Find the right lender with Yubi Match, our proprietary AI/ML engine
- Get custom reports and make acute decisions with Yubi Analytics
- Access diverse debt instruments with just a click using Yubi Automate
- Manage your entire portfolio with utmost precision using automated reports & custom alerts from Yubi Monitor
Yes, housewives looking to start a new business endeavour can avail of a business loan under the PMMY’s MUDRA Yojana. They can also work with a co-applicant if they cannot meet the eligibility criteria.
Yes, it has become easy for women to avail business loans, thanks to the myriad of small business loan facilities available at competitive interest rates from major banks and Government-supported start-up loan schemes.
EMI amounts tend to vary per loan tenure, interest rate and loan amount.
No, almost all small business loans for women have zero collateral requirements.
Yes, you are. You can apply for the Central Government’s PMMY Start-Up India MUDRA loan schemes or avail of term loans or MSME loans from prominent banks & NBFCs.
The Cent Kalyani small business loan for women offered by the Central Bank of India is one of the best possible business loans for women entrepreneurs. It comes with a nominal interest rate between 7.7 to 7.9 percent.
Get your loan disbursed in 3 clicks at Yubi. Our credit evaluation process is 5 times faster than any other service.