Business Loans For Women – How to Get a Loan Without Collateral

With more and more taking up the mantle of entrepreneurship, it was only a matter of time that specific business loans for women are launched for them, keeping in mind the needs and requirements of the women.

However, seeking out such a loan is still not very easy and some lenders still demand some form of collateral when an application is made for the loan, meaning that the loan is to be a secured one.

This had happened mostly after the financial crisis of 2008 and lenders are wary about risking their money on first- time, albeit inexperienced entrepreneurs.

This makes the application process rather difficult for some because not everyone has a collateral to offer.

However, some banks and financial institutions like Bajaj Finserv have emerged where one can apply for a business loans for women owned business, without having collateral.

Here are some ways that might help a woman get a loan without collateral.

• Be prepared to count high rates of interest if you want an unsecured loan. Some lenders might agree to give you a loan without collateral but it would also mean that they would charge a high rate of interest. The APR could range from 10% for the more credit worthy borrower to even triple digit figures, depending on the requirement of the borrower. If you are planning for an income- based repayment plan, make sure that your business would generate that kind of money so that it provides you enough to make those payments as falling behind could hurt your credit score considerably.
• Always make sure that you have a high credit score before you apply for the loan. At any point of time if you feel that you had missed any of your payments, like on an insurance, or even on your credit card payments, take some time and improve your credit rating before you approach a lender. A bad credit history is just the thing a lender wants to be able to demand a collateral from you. Lower your credit utilization ration, which is about 35% of the total score. The ratio would tell you the amount of debt one carried in respect to the amount that is available for credit. If the debt amount exceeds 25% of the available credit, than it does not bode well for the credit score.
• Spend time creating a good business plan to convince the lender how relevant your business is and how it would continue to generate revenue even after a long tenure. Tell the lender about your long term vision for the business, the kind of exposure it would have and the kind of client you are expecting. If the lender is convinced that your business has the potential to succeed, then he might not ask for a collateral, and even charge lower business loan interest rates.

Small business loans for women from Bajaj Finserv have helped many women realize their dream of becoming successful entrepreneurs.

 

Tags: business loans

Category: Business Debt