Women entrepreneurship is constantly on the rise around the globe for the last few years, and India is not an exception. Women are heading respectable organizations and even promoting small and medium businesses, paving the way towards women’s empowerment. Financial institutions have also changed their lending policies to keep pace with the trend. Today, banks and NBFCS hold special schemes for business loans for women.
It ensures speedy loan approval and disbursal and makes business funds available to women entrepreneurs on flexible terms and conditions and competitive interest rates. Here are the key benefits of taking business loans for women.
Flexible eligibility conditions and chances to get subsidies
The Indian Government has been promoting women’s empowerment and women’s entrepreneurship for decades. It has made the Government roll out more flexible loan eligibility criteria for women compared with their male counterparts. Thus, women entrepreneurs stand a higher chance of getting the loan application approved. Most importantly, the Government offers various subsidies on loans taken by women entrepreneurs. It acts as a significant capital source for women to start and consequently expand, develop, and modernise their businessesbusinesses.
Lower interest rates
One of the best parts of business loans for women is that it comes at a lesser interest rate compared with the male applicants. Thus, women entrepreneurs can borrow money at a lesser cost, which helps them optimize their revenues and consequently enhances the business profit. Research suggests banks and NBFCS charge around 1 to 2% lower interest than usual on loans granted to women.
Meaningful Tax Benefits
Suppose a woman entrepreneur avails a term business loan. The interest paid within the financial year qualifies for income tax exemption. Thus, women entrepreneurs can enjoy tax benefits by taking business loans. The total interest paid towards the business loan gets deducted from the gross business revenues and thus lowers the income tax liability. As women are enjoying higher tax brackets for an income tax rebate, the interest paid on their loans entitles them to enjoy further higher income tax rebates.
Differentiating the personal and professional finance
A business loan is always a better alternative to introducing capital each time. Suppose an entrepreneur goes about financing the capital requirements out of pocket every time. In that case, personal and business finance keeps mixing, eventually making it impossible to comply with the accounting standards and, thus, weakening the financial foundation on both the personal and professional fronts. On the other hand, business loans are completely professional finance that the entrepreneur utilizes for business needs. Hence, it helps in better business accounting and separates personal and professional finance. Needless to say, appropriate accounting is the foundation for controlled expenses, and it paves the way for higher business profits by eliminating unsolicited and unproductive expenses.
The best way to build business creditworthiness
Creditworthiness is the most crucial factor in determining access to loans and other credit products. Adequate capital supply is the most important condition for a business to exist. Hence, your business might need finance at any time. Once you avail of an instant business loaninstant business loan and complete the repayment timely, you can consolidate the business creditworthiness. A highly creditworthy business not only finds finance at competitive rates but adds more credibility to the organization in the eyes of the investors. Most importantly, your future customers will likely consider your creditworthiness before tendering you a significant order.
Getting a business loan for women is not a big deal if you meet the eligibility criteria. Banks and NBFCs take the minimum time to process and consequently approve and disburse loans to such competent applicants at the most flexible terms and competitive interest rates. Bajaj Finserv offers the best deals on business loans for women entrepreneurs.