Quick Summary
Starting and growing a business requires money, and for women entrepreneurs in India, financial support is crucial. A business loan for women is a special financial product designed to help women start or expand their businesses. These loans offer various benefits, such as lower interest rates, flexible repayment terms, and government-backed support.
In this guide, we will provide detailed information on business loans for women, including eligibility criteria, required documents, application processes, and government schemes available for women entrepreneurs in India.
A business loan for women is a type of loan provided by banks, financial institutions, and government schemes to support female entrepreneurs. It helps women to finance their business needs, such as purchasing equipment, expanding operations, or covering working capital requirements.
Key Features:
Women entrepreneurs in India can benefit from several advantages when applying for a business loan:
By leveraging the benefits of a Business Loan, you can take significant steps toward achieving your business goals and making your venture a success.
Many banks, financial institutions, and government agencies provide short-term as well as long-term loans for women to start a business in India. Here are the various types of business loan for women in India:
Also known as SME loans, these are small business loans that are offered by many financial institutions. This small business loan for women is largely available for existing small and medium-scale businesses at affordable interest rates. However, some lenders also provide secured and unsecured funding for start-ups. You need to have a good credit score to avail of this loan. You can even choose a Line of Credit (LOC). This option is ideal to fulfill your short-term funding requirements.
If your needs are higher than what you can borrow through an SME loan, you can apply for a commercial business loan. Ideal for medium-scale enterprises, this loan can be used for expanding your business operations. However, your business has to be at least one year old to avail of this loan.
If you have shares, mutual funds, or life insurance policies, you can apply for a Loan against Securities. You will be entitled to a loan up to 60 to 70 percent of the market value of these investments. Since this is a secured loan, the eligibility requirements will be minimal.
If you are a homemaker wanting to start a new business from home, you can apply for a personal loan without any collateral. Since you need a good credit score and decent monthly income, you can even add your spouse as your co-applicant and increase your chances of getting one. You can use this loan for any purpose.
These refer to the multiple finance schemes launched by the Government to promote women’s entrepreneurship. These include the Mudra Loan for Women, the MSME Loan for Women, and the Mahila Udyam Nidhi Scheme which can help you get a ladies’ business loan at a very low interest rate. Although the eligibility criteria are minimal, the processing time of this loan is a long one.
From Shopclue’s founder Radhika Agarwal to Limeroad’s mastermind Suchi Mukherjee, and Nykaa’s founder Falguni Nayar, each of these women has added to the success of women in entrepreneurship in India. Having recognized the uniqueness that women bring into business ventures, the Government of India has taken some significant steps to provide startup business loan for women to start a business.
Here is a list of such women’s business loans from the government India:
The Pradhan Mantri Mudra Yojana (PMMY) or the Mudra Loan for Women is a government scheme designed for women entrepreneurs. It helps them stand strong and focus on building a better future. Here you get a credit card called Mudra card that you can use to maintain the cash flow of your business. From ₹50,000, you can avail of a loan up to ₹10 Lakhs, through this scheme. Available at an affordable interest rate, this loan requires no collateral. However, your business has to be in the non-agricultural, non-corporate, and non-farming sectors. Also, you must hold at least a 50% stake in your company.
The TREAD (Trade-Related Entrepreneurship Assistance Development) scheme is a government scheme where the Government provides 30 percent assistance for the project, with the rest of it funded by the bank that will appraise your business. Apart from the financial assistance, this scheme also provides the necessary counseling and training for the women to develop the required technical skills. However, you should have experience in developing and handling women-centric economic projects.
Mahila Udyam Nidhi Scheme also known as the MUN scheme, this is provided by the SIDBI (Small Industrial Development Bank of India). to encourage women’s entrepreneurship. This loan is made available for the MSMEs (Micro, Small, and Medium Enterprises) at a concessional rate. The project has to be manufacturing, production, or service-related. Your minimum investment should be ₹5 lakhs and you should have a minimum stake of 51% in your business, to qualify for this MSME Loan for Women.
Self-employed professionals such as beauticians, doctors, architects, and chartered accountants can apply for the Stree Shakti Package. You can get a loan up to ₹20 lakhs without collateral, provided you have more than a 50% stake in your business.
This refers to the multiple business loan offered by the BMB Bank. The interest rates for this business loan are decided by the RBI and SBI. You can get up to ₹20 crores as a loan under this scheme if you have collateral. If not, you can get a loan of up to ₹1 crore at a maximum 7-year repayment period.
Scheme Name | Loan Amount | Interest Rate | Eligibility |
---|---|---|---|
MUDRA Loan Scheme | Up to Rs. 10 lakh | Starting from 7% | Women micro-entrepreneurs |
Stand-Up India | Rs. 10 lakh – 1 crore | 6.5% – 8% | SC/ST and women entrepreneurs |
Annapurna Scheme | Up to Rs. 50,000 | As per bank policies | Women in the food business |
Stree Shakti Yojana | Varies by bank | 0.5% concession | Women with 50% ownership |
Apart from the government scheme, there are also other private schemes such as Bajaj Finance Business Loan that support women entrepreneurs.
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To apply for a business loan, women entrepreneurs must fulfill certain eligibility requirements. These criteria vary based on the lender, but generally include:
Meeting these eligibility criteria is essential for securing a Business Loan. Make sure you review the specific requirements of the lender you’re applying to, as they may have additional criteria.
When applying for a Business Loan, you’ll need to gather some important documents. Here is a list of the common documents required:
Having these documents ready can help you apply for a Business Loan smoothly. Make sure to check with your chosen lender for any additional documents they might require.
Several banks and financial institutions provide business loans with special benefits for women. Some of the top options include:
Bank Name | Loan Amount | Interest Rate | Processing Fee |
---|---|---|---|
State Bank of India | Up to Rs. 20 lakh | Starting from 9.5% | 1% of loan amount |
HDFC Bank | Up to Rs. 50 lakh | Starting from 10% | 1.5% of loan amount |
ICICI Bank | Up to Rs. 40 lakh | Starting from 10.5% | 2% of loan amount |
Bank of Baroda | Up to Rs. 25 lakh | Starting from 9% | 1% of loan amount |
Applying for a Business Loan can help turn your entrepreneurial dreams into reality. Here’s a simple guide to get you started:
Following these steps can make the process of applying for a Business Loan straightforward and stress-free.
Getting approval for a Business Loan can be easier if you follow these tips:
By following these tips, you can increase your chances of getting approval for a Business Loan and take a step closer to achieving your business goals.
As per a survey, more than 85 percent of women entrepreneurs faced challenges while availing loans from nationalized banks. Here are a few such challenges you need to overcome, if you want your business loan application to be approved by your lender:
Having a good credit score is very important to get your business loan approved at a low interest rate. It shows how disciplined you are, in paying your monthly loan instalments. A CIBIL score of 750 or higher can make it easy for you to get your loan. Make sure you check your credit score with a reputed credit rating agency before submitting your loan application.
This is one of the reasons that can destroy the confidence your lender has in you. Cashflow establishes your capacity to repay your loans after managing your operating expenses. This is why most lenders will ask you to submit your bank statements and your business financial statements.
Having too much debt can cut down your chances of getting a business loan for women. This will give an impression to the lender, that you may not be able to repay the loan within time.
A robust business plan is a must for every lender to approve your loan, especially if your business is a start-up. Even if you are not making much of a profit currently, this document will help the lender approve your loan, by considering the prospects of your business.
Most business loans that are given to women entrepreneurs do not require collateral. However, if you need a huge amount you will have to provide collateral. Also, having collateral can give you a better chance to qualify for the loan, at a lower rate of interest, since the risk would be low.
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A business loan for women is an excellent financial solution for aspiring female entrepreneurs in India. With various schemes and benefits available, women can now achieve their business dreams without financial worries. Whether it’s a startup or an established business, these loans provide the necessary support to grow and succeed.
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Yes, there are several loans available for women to start a business in India. Programs like Mudra Yojana, Udyogini Scheme, and Mahila Udyam Nidhi Scheme offer financial support to women entrepreneurs.
Yes, housewives can apply for business loans. Schemes like Mudra Yojana and Udyogini Scheme are specifically designed to support women, including housewives, in starting their own businesses.
The Pradhan Mantri Mudra Yojana (PMMY) offers loans up to ₹10 lakhs without collateral. It is divided into three categories: Shishu (loans up to ₹50,000), Kishor (loans from ₹50,000 to ₹5 lakhs), and Tarun (loans from ₹5 lakhs to ₹10 lakhs).
There are several government schemes to support female entrepreneurs in India, including Mudra Yojana, Stand-Up India Scheme, Annapurna Scheme, Dena Shakti Scheme, and Mahila Udyam Nidhi Scheme.
Interest rates for business loans for women vary depending on the lender and the type of loan. Generally, rates range from 11.99% to 18% per annum.
The government of India has started providing loans to women under various schemes, to promote entrepreneurship. You can apply for any of these loans on the official websites of these organizations.
Having a job will put you in a better position to apply for a loan. However, you can still get a loan if you don’t have a job, provided you offer some collateral against your loan.
Yes, a housewife can apply for a loan, if she wants to start a business from home. You can apply for a personal loan and include your spouse as the co-applicant. Otherwise, you can apply for a business loan under any of the government schemes and provide some collateral.
The interest rates at which banks provide business loans for women entrepreneurs differ from one bank to the other. A comparative study of banks providing business loans for women will help you understand which one is the best.
व्यापार ऋण के लिए महिलाओं के लिए कई विकल्प हैं, जैसे मुद्रा योजना, उद्योगिनी योजना, और महिला उद्यम निधि योजना.
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