Why Are Businesswomen Overlooked for Business Loans?
You can come across a lot of instances and examples in the corporate world where women have faced gender inequality. But times are changing now and there are a lot of women out there who are successfully running their own business.
Running a successful business needs capital and women have to face prejudice here as well. Building capital all by yourself is not an easy task. Many people often resort to taking a loan from the banks or the Non-Banking Financial Companies (NBFCs) to overcome the difference in the capital. But there are some reasons for which your business loan application may be rejected by a lender. These are:
No Collateral:
These days, a lot of businesses are based on the web and they do not have an actual office. The banks and the financial institutions term this kind of businesses as risky businesses. Since there is a lack of an actual office, the banks or the financial institutions might ask for a collateral. But often times, since there is a lack of an actual office, it becomes difficult to arrange for a collateral by women. You should know that you cannot use a personal asset as a collateral for yourbusiness loan.
Stringent Procedures of The Banks:
The banks have a very rigorous procedure in place and they can reject yourbusiness loanapplication for the smallest of mistakes. The banks are often considered to be inflexible when it comes to loan applications and you need to make sure that all your documents are in place and nothing is amiss from your application. The Non-Banking Financial Companies are considered as a better alternative to the banks since they are more flexible in terms of their policies.
Low returns:
If you have been running a company for some time now and are unable to turn a profit from your business, this will be seen as a red flag by the banks and financial institutions. The banks and the financial institutions will reject yourbusiness loanapplication on the basis that you do not have enough revenue to repay the loan.
There are a few Non-Banking Financial Companies (NBFCs) like Bajaj Finserv, who encourage women entrepreneurs and will approve theirbusiness loanapplication if all the other required documents are proper. You can take a loan of up to INR 30 lakhs for your financial needs.
There are two ways by which you can apply for a Business Loan. You can either walk to the nearest branch of the financial institution from which you want to avail a business loan or you can apply for a business loan online. Applying for a business loan online will save your time and your application will get processed faster as well.
