Women have always been at the forefront of many fields. Be it technology, engineering, medicine, or entrepreneurship, women are living their mark everywhere. Women entrepreneurship goes back to history when women traders used to trade spices, cotton, and many other commodities. Fast forward to today, many women in the business world are leading their industry and setting the bar high for others. There are countless women-led businesses in India that are successfully running and expanding in new territories.
Like any other startup, funding is a crucial part of keeping the business running. You need funding to hire staff, market, legal, buy raw materials, pay office lease or rent, and many other things. Despite the widespread expansion of the startup ecosystem in India, many women find it challenging to secure funding for their startups. Many investors are skeptical about investing in startups with women founders. In such a condition, it is crucial to find reliable funding sources to help you grow your business. Due to the rising number of women entrepreneurs, getting a startup business loan for women in India by the government has become easier. If you are a woman entrepreneur and looking for funding for your startup here are some of the ways you can get loans for your startup.
Alt text: Image of Women entrepreneurs Getting loan for Startup
- Small business loans
The demand for startup funding from women entrepreneurs is steadily rising. With more innovative ideas and profitable business models, many women entrepreneurs are all set to expand their businesses and become profitable. To fuel this rising demand many private financial institutions have come forward to offer to fund women founders. If you have a foolproof business plan, accurate sales projections, and a strong credit profile you can easily get a small business loan for your startup. These business loans are purely commercial debts, meaning, you don’t have to dilute your equity to pay back the investment. You will be needed to pay back a premium of your loan with a certain internet amount decided by the loan provider.
The criteria to obtain a small business loan can vary company by company. But the company looking forward to seeking a business loan must have a good track record. The nature of the loan varies according to the lender’s policy and your business needs. Various types of small business loans are working capital loans, lines of credit, and term loans. These loans can be acquired for new businesses and existing businesses as well. Many business loans might need you to offer collateral to secure the loan. But if it is not possible for you, you can also look for unsecured loans that do not require collateral.
- Government Loan schemes
The government of India is always on the lookout for opportunities to make business easier for entrepreneurs and business owners in India. As companies create employment opportunities, bring foreign investments and support the economy, the government also does its part by offering various grants, funding, and support to business owners and entrepreneurs.
By looking at the rising number of women entrepreneurs in India, the government of India also offers many business loans and funding options for women in India. That means getting a startup business loan for women in India by the government becomes possible thanks to innovative business ideas and commitment by women entrepreneurs. These business loans are exclusively offered to women entrepreneurs with new and established businesses. Government business loans have lower interest rates and lenient payback terms than most private lending firms. Following are some startup business funding schemes offered by the government of India.:
- Mahila Udyam Nidhi Yojana
- Mudra Loan for Women
- Stree Shakti Yojana
- Udyogini Scheme
- Dena Shakti Scheme
You can check these schemes individually and find the one that suits your eligibility and business needs.
- Revenue-based financing
Many startup founders are aware of the incidents where founders were kicked out of the company as they eventually lose their equity by getting more investors on board. If you want to retain your equity and don’t want to dilute it for the investor, you must consider revenue-based financing. In revenue-based funding, the founders don’t have to shell out their equity to pay off the investors. Instead, they can pay back the investor from the monthly revenues as a payout. This approach helps you to secure funding for your company without losing equity. That is why many women entrepreneurs prefer revenue-based finance over seed or angel funding.
Raising funds for your startup can be complicated, especially if you are a woman entrepreneur. Thankfully things are changing now. Today there are many options when it comes to raising finance for your company. The above options will surely help you in the right direction. Make sure you choose the funding type that suits your goals and business needs.
