Get a Loan

What Are The Basic Steps To Get A Business Loan For Women?

Discover the basic steps to getting a business loan as a woman entrepreneur. Learn about loan options & tips to increase your chances of approval at IIFL Finance,

2 Feb, 2023 15:54 IST 3185
What Are The Basic Steps To Get A Business Loan For Women?

Money is essential to keep business operations run successfully. The main obstacle that stands between ideas and their execution in a business, especially for women entrepreneurs, is lack of capital. The most practical solution available to all businesswomen is to take a business loan.

Business loans not only help in the purchase of equipment, payment of vendors, payment of office rent, and employee salaries, but they also assist in establishing a good credit rating that will enable future borrowing.

Additionally, business loans have several tax advantages that can be quite useful for companies that are already making money or are about to start making money.

How To Apply For A Business Loan?

Getting a loan is easier said than done. Therefore, it is important to know the necessary steps for getting a business loan from a bank. Here are a few steps to take when applying for a business loan:

• Choose The Right Financing Option:

Before applying for a business loan, one must choose the right kind of financing. Based on the business requirements, there are different types of loans offered by banks and NBFCs. Some of these are MSME loan, machinery loan, startup loans, etc. Since all loans have different repayment terms and conditions, it is ideal to pick a financing option keeping in mind one's repayment ability and business requirement.
Another important consideration for women entrepreneurs is to do thorough research and finalise a list of banks that are likely to extend the type of loan one is looking for. Comparing different business lending options helps to get the best rate. During an ongoing loan term, keeping eyes and ears open about changes in interest rates is a great way to substitute a high-cost loan. But switching loans for better interest rates can be beneficial only if done during the early loan tenure.

• Check Eligibility:

Most lenders evaluate business loan eligibility based on credit score, which reflects the creditworthiness of an individual. Women business owners must ensure a credit score of 750 and above for loans. A low credit does not mean no loan. Lenders may approve business loans against lower credit scores but it will have higher rates of interest, resulting in higher EMIs.
The easiest way to know the loan interest rates being offered by a bank will be to use the business loan eligibility calculator. It is a digital tool available to all individuals free of cost. All one has to do is to visit the lender’s website, enter the desired loan amount, tenure and other details like income, age, credit history, financial liabilities, etc. The calculator will provide the exact amount of EMIs one will need to pay, depending on the interest rates.

Get Gold Loan at the comfort of your home
Apply Now

• Gather Important Documents:

A significant percentage of loan applications gets delayed, and sometimes rejected, due to improper documentation. Banks need borrowers to submit many documents related to personal and financial information. Banks weigh balance sheets, income statements, cash flow statements, etc. to appraise the financial obligation and ascertain the repayment ability of a loan applicant.
Document verification involves a considerable amount of time. Since it is an important step of loan approval and cannot be overlooked by banks, keeping these documents ready saves unnecessary trouble and speeds up the loan disbursal process.

• Submit Loan Application:

The final step to a business loan application is to submit it. It can be done online by applying through the lender's website. For those not comfortable with an online process, they can visit any local branch of the bank or the NBFC for the application form. The loan application must be duly filled.
Applicants must be careful not to furnish any wrong information as it can possibly lead to loan rejection. Along with the loan application applicants must submit all the documents that are needed to by the lender.

After the application form goes to the lender, it verifies the different parameters to check the loan eligibility. At the same time, a background check of the applicant is conducted to evaluate the repayment capability.

Once the lender is satisfied it shares the loan details and repayment terms with the borrower. If the borrower agrees with the loan terms, the loan documents are signed and the amount is credited to the applicant’s account in a few days.

Conclusion

Business loans available for women can be taken to buy commercial vehicles, restock inventory or for working capital loans to cover temporary cash flow problems in business. A prior knowledge of the loan application procedure improves the chances of getting the approval easily. Before seeking out a business loan, women entrepreneurs must be sure to have a business plan in place.

At the same time, the right approach is to choose the best loan type that is right for a business. Nevertheless, it does not simply end here as one needs to approach the right lending partner.

IIFL Finance, a leading financial services company of India, offers many types of business loans to suit every need of a business person. Women entrepreneurs engaged in manufacturing, trading and service businesses can easily get secured and unsecured business loans at affordable interest rates and flexible repayment terms.

Get Gold Loan at the comfort of your home
Apply Now

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

Most Read

Check the Difference Between 24k and 22k Gold
18 Jun, 2024 14:56 IST
73989 Views
Like 8363 8363 Likes
Franking and Stamping: What’s the difference?
14 Aug, 2017 09:15 IST
48351 Views
Like 9666 9666 Likes
Why Gold Is Cheaper In Kerala?
22 Jul, 2024 15:05 IST
1859 Views
Like 6383 1802 Likes
Udyam Registration Certificate & Its Benefits
27 May, 2024 14:42 IST
33858 Views
Like 260 260 Likes