Though female entrepreneurship in India has been given a huge impetus by the Startup India programme, which has offered loans from Rs.10 lakh to Rs.1 crore to women entrepreneurs from April 2017 onwards, there is a long way to go to make business funding accessible to women. Out of the 6,300 start-ups recognised by Startup India, only 2,488 feature women as a partner, director or founder. A survey by the National Sample Organisation reveals that only 14% of Indian businesses are run by women. What’s more, it also found that 79% of women-run businesses were self-financed.If you have business ideas for women, but basis of financial crises you not starting your dream business that time easy financing options are a must.
If you are a woman entrepreneur, you can make use of these sources of quick and convenient external funding to grow your business.
1. Unsecured term loans
Collateral-free loans are easy to apply for online, and don’t require much time to get sanctioned. You can choose a customised business loan that offers you the freedom to use the funds as you please.
For example, if you need funds for daily operations due to a last-minute payment delay from your biggest customer, an unsecured loan can be the perfect option. A Business Loan by Bajaj Finserv, for example, gives you funds up to Rs.20 lakh in as less than two days. You can even get a higher loan amount by talking to the lender. All you need to do is see if you meet the loan’s eligibility criteria and submit certain documents that attest to them. These include your business profile, business proof, bank statements, ID proof and address proof. You can use an unsecured term loan to purchase or lease expensive machines, fill in gaps in working capital, grow your operations by shifting to a commercial complex, carry out digital marketing for your business, etc. These loans are available at competitive rates of interest and offer your flexible options of repayment by allowing you to choose your tenor and make part prepayments.
2. Secured term loans
Increasing overhead expenses, rising cost of raw materials and costly human resources are some of the reasons why you may need funds for your business. You can cater to these recurring costs and the more substantial amounts needed for product development, R&D, purchasing a warehouse, etc., by taking a secured loan such as a loan against property. Since you are pledging an asset, your interest rate will be low, and you’ll be able to access a bigger loan amount. Bajaj Finserv’s Loan against Property, for example, offers you funds up to Rs.5 crore, depending on the value of the security and your income. All you need to put forward are simple KYC documents along with the legal papers for the property you are mortgaging. There are other secured loans you can apply for such as Loan against Shares, Loan against Fixed Deposit, and Lease Rent Discounting. Consider these options in detail and see which one suits your needs better.
3. Flexi loans
Flexi Business Loans are a unique offering that support unpredictable needs for business finance. Say you are rolling out business expansion in stages to keep in line with increased demand. Since applying for multiple loans is cumbersome and time-consuming, you can take a Flexi loan, which offer savings as compared to a term loan. For example, say you took a term loan of Rs.20 lakh. Here you will pay EMI on the entire amount. In contrast, say you opt for a Flexi loan of Rs.20 lakh. You can withdraw Rs.10 lakh for the first 6 months, and pay interest only on Rs.6 lakh versus the entire sum. Say you require Rs.5 lakh during the 7th month for leasing equipment. You now pay interest on Rs.11 lakhs. A Flexi loan allows you to withdraw as much as you require within the limit and your chosen tenor. Further, you can choose a pay only the interest as EMIs to manage your business cash flow better. You can pay off the principal at the end of loan tenor, timing it with when your business is likely to have the funds for repayment. These three business financing options provide a fast and convenient source of funds for your business. Choose from them based on your business needs, and grow your business at your own pace.
Additional Read: Flexi business loans explained
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