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Great Sources of Financing for Business Women

  • Highlights

  • Challenges for women entrepreneurs

  • Performance of businesses owned by women entrepreneurs

  • Different sources of funds for women

  • The advent of NBFCs as a source of funding

As a woman, there is a high chance that you have faced numerous challenges from various quarters to start your own business. Soon, you face a bigger challenge ahead – funding.

Resources are limited and there is huge competition for them. A conservative attitude towards women business persons makes it tricky for them to secure funding. It may not come as a surprise to you that women business persons face more difficulties to get funds to meet their business needs than their male counterparts. As a result, in India, 92% of all the businesses owned by women are financed by their own source of money, quasi-capital, or loans from informal sectors.

The statistics represent a contrast to the performances of the units. As a general trend, the businesses owned by women perform better. They offer more diverse product ranges. The rate of NPAs is also lower than businesses owned by males. Yet, they face financing crisis. Social perceptions, stereotypes, and accessibility are the reasons behind this.

However, in recent times, the lending scenario of India is undergoing a radical change. With online lenders in the market, there are more borrowing options available for aspiring women business owners.

Additional read: Business ideas for women & how to arrange for funds

The economy of India is in a booming phase. Surged by a host of government legislation and other economic factors, India is gradually becoming a breeding ground for women business persons looking to turn their dreams into reality. So, let’s consider the financing options available to you:

NBFCs: The New Age Lenders

NBFCs are an excellent option for funding your businesses. Their loan eligibility criteria are not as rigid as the traditional banks. Even if banks reject your proposal, NBFCs can evaluate and fund your project. Also, the requirement of collaterals is quite nominal in NBFCs.

We, at Bajaj Finserv, offer collateral-free business loans up to Rs. 20 lakh at competitive small business loan interest rates with minimum documentation.

Making Use of Government Schemes:

The Government of India has given great emphasis on women empowerment by making them financially independent. The Central, as well as various state governments, have launched various schemes over the years to fund the activities of businesses. For example, The Stand-Up India Scheme aims to give a boost to the entrepreneurial spirit among women by lending as high as Rs. 1 Cr. Recently, the Niti Aayog had announced that they are going to set up a dedicated women cell for helping them succeed in business.

Business Loans for Women

Financial Habits that will help you get a business loan

As a small business owner, you need to stay on top of your business’s finances, in order to ensure that your business keeps running smoothly and never runs out of working capital for its day-to-day operations. Additionally, you need to ensure that you are able to obtain external financing for your business when the time comes for your business to grow, or take on a large project. Here, we give you a few financial habits that every small business owner should have, that help you get a business loan easily when the time comes for you to apply for a loan.

Crowd-Funding: Use Social Media

Crowd-Funding is a relatively new concept. It is using the ever-growing social media to connect with investors. There are various online platforms where you can pitch your project to a wide range of audiences. You can attract investors to invest there. It will depend on various factors like how practical your business plan is and how good your future earning potentials are. But with a strong business plan, you will be surprised to see how many investors are waiting for a good investment opportunity.

Use Your Own Funds

This is the most common avenue for financing. You use your savings to expand your business. You tap your friends and families for loans. However, it may not be enough to scale up the business further.

Securing funding for your business can be challenging. However, new generation online lenders cut across traditional barriers to make funding available for you. They offer collateral-free loans as high as up to Rs. 20 lakh, but also a host of value-added features to make borrowing easy for you.

Additional read: What women entrepreneurs need to know about financing business

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