Indian women with an entrepreneurial bent of mind are driven by ambition and want to start their own business at the earliest or expand an existing one. If you too are led by your dreams of becoming an entrepreneur, along with a great idea and immense dedication, you will need capital to turn your dream into reality.
For any upcoming entrepreneur, securing a business loan isn’t easy. And traditionally, it has been even more difficult for a woman. Various restrictions, gender barriers, and lack of financial resources made it difficult to get a loan for women.
However, things are changing for the better. The central and state governments now have funds earmarked as business loan for women to promote entrepreneurship and to encourage women to play an active role in building the economy. Many banks and NBFCs also have eased the process to get such type of a loan.
However, a due process has to be followed for any loan application. If you want to ensure that your loan application is approved without any hassle, here are some things to keep in mind before you apply for this type of a loan.
Build a strong business plan
Having a well-drafted business plan is necessary not just to chart your progress but also to secure a business loan. When you fill out an application form, you will have to mention specific details about your business plan. The clearer you are about your idea and the future operations of your business, better are your chances to get a women entrepreneur’s loan.
Improve your credit score
Your credit score is one of the key parameters to have an impact on your business loan application. Your credit score reflects your personal details, type of credit availed of, repayment history, loan enquiries, etc. You should aim at maintaining a high credit score as it allows you to negotiate for lower interest rates on your loan.
File your Income Tax Returns (ITR)
A financier may ask you to furnish your ITR to check your financial standing. You may have to declare ITR for the previous two or three years as part of the basic documentation procedure. The amount of loan that can be disbursed has a direct correlation with the annual income you declare in your ITR.
If you haven’t filed your ITR for the last three years, you can still file for differed returns before applying for a business loan.
Cut down on personal debt
If you have any outstanding personal loans, educational loans or credit card debt, pay all dues/EMIs on time and focus on repaying these off at the earliest. Your PAN details will reflect all outstanding debt. With fewer liabilities, your chances of getting a business loan for women increases.
Choose the right financing partner
Even though you are keen on securing a business loan, it is essential to select a provider that understands your needs, enjoys a strong reputation in the market, and offers sound customer service. Tata Capital is one such financier; a company that is built on the legacy of trust and customer service.