10 Tips on How to Get a Small Business Loan in Nigeria
Sustaining a business isn’t easy, especially for a newbie in the business industry. There are lots of ups and down before breaking even. This is why entrepreneurs apply for business funding across banks. But in getting this done, some business owners get turned down by these institutions and they might feel some type of way either because of inappropriate documentation or not meeting the criteria to getting the business loan needed.
This article is aimed at helping small business owners obtain a loan in Nigeria. You will find out effective ways that work in getting the business loan you have always wanted to run your business. Although it isn’t easy to get a business loan, there are sure ways to get one.
Follow the guidelines I will drop here. One thing we all need is knowledge in getting things done, and once it is gotten, everything becomes possible. I will be showing you ways to get a business loan in Nigeria fast and easily without having to go through the rigorous stress of paperwork and documentation.
Read: How to Create a Modern Website for your Business
Steps to get a small business loan in Nigeria
The following are the ways to get a small business loan in Nigeria to run your business and push for profitability. They are;
- Banks and financial institutions
- Loan service providers
- Government loan schemes
- Family and friends
- Show result
- Have an official who trusts you
- Sincerity in the purpose of the loan
- Showcase the repayment schedule
- Show visible commitment
- Cashflow forecast
Banks and Financial Institutions
When starting a business, one of the first options to utilize is the banks and financial institutions. These organizations are known for providing financial assistance to small businessmen.
Sometimes, some banks will lend you money if they are satisfied with the business model you present to them to carry out your business activities. They will have to look at things like the model, financial projections, and your payback strategy.
The banks and financial institutions also look at the management experience – are the people capable enough to manage these funds that would be provided? These are the things being put in place to make sure that the leasing to finance your business is secured.
Loan Service Providers
There are situations in our lives where we all have needed cash. If you are trying to make use of the banks and financial institutions, you know how tedious the rigorous work process and documentation is. This difficulty in getting loans from the banks is where the loan service providers come in.
We live in the high technology environment where fintech has created easy access to easy short – terms loans for small businesses and individuals. There are some good short-term loan providers in Nigeria such as Carbon, Fair money, etc. it is so easy for people to make use of these loan providers to make access to finance and within 24hrs, you get your money.
But there is something with these loan providers – the type of loans being offered are always limited usually between 3 – 6 months and is very can also be your safest option when you want to get funding easily.
The beauty about this is that they are really good and accessible when needed and can come up for you when you need them to.
Government Loan Schemes
Over the years, there have been some good government interventions for small businesses regards to business loans for businesses. if you are looking for a small loan to finance your business, I would say that government loan schemes are the best to get access to especially if you are just growing as a business.
Government loan schemes can help SMEs manage their day–to–day activities, grow, create expansion metrics, and execution for infrastructural development. Some accredited banks have been chosen by the government to provide these loans under government aided funding programs such as the popular NPower, BOI, etc.
Most times, the government funds come in form of a loan with little or no interest rate. This is one beauty of the government loan schemes. The interest rate compared to the banks and loan service providers can’t be compared to the government-sponsored funds. There is still some backlash to this. It has made it difficult to get access to one due to the low-interest rate involved with getting access to the loan.
Family and Friends
Family and friends are also a way of getting loans for small businesses. some family members might have a lot of money to spend. You can always meet with them for support and assistance. There are also some friends too that have some money to spare, they also can come in as investors to support your business.
When you have friends, they should be able to support your course if they have the means to achieve the aim which you have set out. You shouldn’t hang around people that can’t do that literally for you as long as it also benefits them as investors.
Show result
You need to show results that you are capable of delivering with the money being released to you to run your business. So many new entrepreneurs want to go into business but can’t show the result of their capacity to deliver.
Have an official who trusts you
Some people have officials who trust them over loan facilities because they have been able to build up trust over the years with these officials. You can also create one for yourself and have access to facilities whenever you feel like there is a need for that.
Sincerity in the purpose of the loan
You need to have some honest sincerity on why you need the loan. The reason why this is always asked is that these organizations leasing out the loan want to know how you want to use the loan and how you plan to repay them.
Showcase the repayment schedule
Financial institutions will always request a repayment schedule for every facility being taken. So, have a plan to showcase this and your access to business loans will see the light of the day.
Show visible commitment
Your commitment to things says a whole lot about you when you run a business. It is always very clear that when the appraisal is being done, it gives a facility company the view that you know what you are doing and they will be willing to grant you what you seek regards business loans.
Cashflow forecast
The cash flow forecast shows how well your business has been doing for at least 6 – 12 months. This is also a preview to organizations you want to outsource loans from that you are either a good business or a bad one. It will help them secure their money.
