Starting a business is one thing, financing it to keep it afloat is another. Funds is one of the many things needed for starting and continuing a business. Unfortunately, many business collapse as a result of inadequate funding.
One of the many methods of getting funds for business is loan. A business loan comes in handy when you don't have enough money for business.
According to Wikipedia:
A business loan is a loan specifically intended for business purposes.
Although, a lot of things should be considered before taking a business loan, because it would be repaid, like every other loan, with interest.
Even at that, getting a loan for your business isn't very easy in Nigeria, but it is very possible. After reading this article, you should be able to get your loan approved with less stress.
We would be looking at the requirements and necessary documents for a loan for your business and where to get a business loan in Nigeria.
Documents Required For Business Loan
These are the requirements/documents needed to get a business loan in Nigeria.
- Credit reports
- Bank statements
- Means of Identification
- The business CAC registration certificate
- Income statement
NB. These documents include but are not limited to the requirements of requesting a loan for business.
With that, let us continue to the places you can source for business loans.
As long as you meet the requirements, commercial banks across the country are ever ready to lend business owners money to finance their financial activities.
If you are interested in loaned funds from the banks, then approach any branch of the bank you want. Ask the customer care or any of the bank officials for the loan officers office. With the officer, you can request for a business loan form and discuss your chances of securing financial aid from the bank.
You should understand that banks charge high interest for their loans, so it is very advisable to check the terms and conditions very well.
The government also aid new and old business with funds, and the interest rate is quite lower than those of commercial banks or loaning companies, which is why it is the most preferred.
Most government business loans schemes are done in collaboration with private banks and it could be done through the Bank Of Agriculture, CBN, DBN and the likes. You can see more details on Federal Government Loan.
Private Loan Banks
This option is quite fast and easy for quick funds without much hassle. Going through the bank process for a loan is time consuming, so this is an attractive alternative.
We have two types under this sector.
- Offline loan banks: these are those that have physical branches in states across the country. Examples are, SEAP, MFB, MFI, LAPO and others.
- Online Loan Apps: these are more popular with the smartphone users. They are institutions that gives customers loan through their apps. Examples are, Carbon, FairMoney, KiaKia etc.
Like with loans from private bodies, the interest rates of these loan banks/apps could be very high and the duration is usually short. Always check to know the in and outs of the loan before you agree to it.
N.B: There are some complaint by users about loaning apps and loan banks. It is advisable that you check their reviews on google playstore before you download and use the apps. For the loan banks, you can ask from people who have use them before to have a feel of what they are like.
Before approving your loan, most financial institutions would look at how much profit your business has generated, and if you haven't launched it yet, how profitable the idea is. Means of repayment is also put into consideration.
You should understand that with loans comes debts and interests. You should always think of how to pay on time because failure to do so would mean extra interests.
If you finally get a business loan, try to manage it very correctly. Most managers source for more funds to expand operations, so use yours wisely.