Introduction
A Women business owner within the MSME sector could go through times when she has to take a leave from her MSME for a period of time. Compared to a man, women business owners will have to do it for a longer period of time due to reasons like pregnancy, raising her child, taking care of parents etc. Even though it is natural for a business owner to take a long leave when he/she comes back to taking care of the business there could be expected and unexpected challenges, one of which will be lack of enough funds to keep the business running, or lack of funds for paying salary. To overcome such challenges a business loan could be helpful to the business owner.
Today we will explore what small business loans mean for women, the do’s and don’t when going back to business management or when restarting the business.
What Does a Small Business Loan for Women Mean?
A small business loan for women is nothing but a business loan for women which is in a lot of ways unique and helps the gender to face their own challenges. Business loan for women are offered by most lenders but there are some lenders like NBFCs who make attractive offers which could be game changer for women business owners.
There are programs and resources specifically designed to help women entrepreneurs. These can include:
- Lower interest rates or fees: Some lenders offer reduced rates or waived fees for women-owned businesses.
- Mentorship programs: These programs connect women with experienced entrepreneurs who can provide guidance and support.
- Networking opportunities: Events and workshops designed for women entrepreneurs can help build connections and access potential investors.
Steps for Women Business Owners Re-entering MSME Sector
- Define Your Goals and Needs
The first step is to get clear about your goals. Are you looking to return to a previous employer, find a new job, or launch your own business? Each path has different financial needs.
- Re-entering the Workforce: You might need funds for retraining, childcare, or updating your wardrobe.
- Launching a Business: Here, the funding needs are typically larger. You might need money for equipment, inventory, marketing, and rent.
Once you know your goals, create a detailed business plan if you're starting a business. This plan should include financial projections, marketing strategies, and a breakdown of your funding needs.
- Assess Your Financial Situation
It is very basic to keep an eye on your financial capabilities, to look at the assets and liabilities. And yes the credit score should be in the required bracket to be even considered to be eligible for loans and to survive the competitive business landscape.
- Explore Funding Options
There are several ways to finance your goals:
- Personal Savings: Bootstrapping is a common way of funding and can be explored if it is sustainable, but it is important to remember that it could also increase personal risk and you have a life out of business.
- Grants: Grants offered by non govt organizations and govt organizations could also be options to consider. However the challenge is such grants are only enjoyed by a minority of the actual women business owners. Lot of paperwork and processes also could be in place and could lead to delays in getting funding.
- Small Business Loans: Banks and credit unions offer traditional loans for businesses. Consider exploring programs specifically designed for women-owned businesses, as mentioned earlier. Business loan without collateral can be offered by the prominent NBFCs in india.
- Crowdfunding: Platforms like Kickstarter and GoFundMe allow you to raise capital by pitching your business idea to a large online audience.
- Angel Investors or Venture Capital: These are individuals or firms who invest in startups with high growth potential. This option typically requires a more established business plan and a strong pitch.
- Strengthen Your Loan Application
When applying for a loan, be prepared to present a strong application package. This should include:
- A well-written business plan with realistic financial projections.
- Personal and business financial statements.
- Tax returns (personal and business, if applicable).
- Proof of collateral (assets you pledge as security for the loan, if required).
- A solid credit history.
- Get Help and Mentorship
Don't be afraid to ask for help! Many resources are available to support women entrepreneurs.
Get mentored by successful entrepreneurs who are women. There are such active communities online and offline who are willing to extend their hands to help struggling business owners who are women. Their experiences and guidelines would help a mile in avoiding non necessary things in the entrepreneur cycle and the lessons passed on with experience will add a lot of value in the long run.
Mentorship could also add a lot of motivation and direction for a woman entrepreneur to move forward without being anxious about what is ahead of her in the path. The SBA office, SCORE which is non-profit organization, and WBCs are some examples for consideration in this dire
Conclusion
Regardless of one’s gender, returning to business operations and taking it where it was originally destined shouldn’t stand as a challenge for any entrepreneur. However it is no secret that women entrepreneurs have to face extra obstacles in comparison with men. Fortunately there are NBFCs out there who have customized lending options for female entrepreneurs. And yes, NBFCs are the right choice to be considered.