There are several different loans and financial facilities, that are provided to women to help them set up their own enterprise. To know more about such loans, read on.
One of the biggest difficulties that women entrepreneurs face today is the lack of timely and sufficient credit to start their own business. Many lenders especially large-sized and well placed banks have realized this problem, and have started providing women entrepreneurs small business loans. Instead of getting into the terms and conditions of loans, let’s take up a different approach towards this subject.
Usually business loans are provided to individuals who are planning to start their own enterprise. It must be noted that such loans are provided by only some selected lenders. The approval process is also slightly different from the usual loans.
- Applicants: One of the first things that is considered by the lender while sanctioning a business loan is the applicant’s qualification and experience in handling businesses.
- Business Model: The second aspect of any business loan is its business model. The success of the business model is determined by the lender before approving the loan.
- Goodwill and Reputation of Applicant: Another very important point that is considered by the lender, is the goodwill of the applicant within the market in which she operates. The goodwill is basically analyzed because it greatly points out to the success of sales.
- Technology and Support : Another logical point that is considered is the technological back up of the applicant. For example, if the applicant is a holder of a patent or has come up with some great scientific development, then her chances of getting the loan are good.
- Utilization of the Loan: The lender is also bound to inquire about the utilization of the loan amount. Usually, there are two different cases where the need for credit is experienced, namely for capital expenditure or for operational expenditure.
Small Business Financing for Women
In most of the cases, these loans have favorable terms and conditions. It basically means that the rate of interest that is levied is pretty low. After the lender receives the application for the loan, he performs the standard checks on the credit ratings, credit reports and identity checks. In addition to that, the standard checks of business loans are also conducted.
In case if the loan is a secured loan, then the lender will analyze the status and market value of the collateral. As mentioned above, the rate of interest that is levied on small business loans is usually low, and the time period of the loan is prolonged. It must be noted that in case of late installments, the credit score and ratings tend to suffer. Small business loans are sometimes also provided to businesses to pay off operational costs such as labor wages or electricity bills. Small business loans for women with bad credit, on the other hand, are provided for poor credit ratings.