The Best Business Loans in Ghana

Compare the best options on the market and choose the one which best adapts to your day-to-day needs.

Further Below: Our Guide To The Business Loans in Ghana, Everything you need to know.

Standard Chartered

• Maximum amount of GHS350,000
• Interest rates of 11.49% p.a
•  Flexible payment period of 60 months
• Loan protection insurance
• Smart scheme loans
• Smart credit
• 24/7 access to your account
•  Friendly terms

Absa Bank

•  Maximum loan amount of GHS350,000
• Long repayment period of up to 72 months
• Fixed interest rates of between 3%-20%
• Loan insurance cover
•  No collateral/security needed
• Flexible repayment options
• Quick approval

Stanbic Bank

•  Loan amounts of up to GHS 300,000
• Offers a loan tenure of up to 72 months
• Competitive interest rates
• Credit life insurance against disability and death
• Top-up option available
• Fast and simple application process
• Fast payout
• Loan repayments not more than 50% of monthly income

Business Loans in Ghana, All You Need To Know:

We’re passionate about explaining the nitty-gritty details of business credits, including the type of credits available, which factors to consider before contracting a product, and the best available options that are most consistent with your needs and peculiarities.

[UPDATE] What economic measures has the Government implemented for companies through covid-19?

Just like any other country, the Ghanaian government took measures and implemented policies that would help cushion companies and small businesses from COVID-19’s adverse effects. The government stepped in as early as March 2020 before companies and small businesses could feel the ravages of the pandemic.

• The government announced deferral and reduction of both direct and indirect taxes. 
• The state postponed the deadline on which it required companies to pay social security contributions. If companies were unable to pay the amount by the deadline, their situation was assessed and the relevant solution would be provided by the relevant authority.
• The government worked with the Bank of Ghana on credit mediation, guaranteeing banks’ lines of credit, reductions of tax rates, and resolving disputes between buyers and suppliers.
• The government exempted companies whose activities were directly affected by the pandemic such as discos, shows, movie theaters, and festivals of the employer contributions.
• The government provided a State-guaranteed loan for 12 months. The beneficiary would start repaying the loan after 12 months in a period of up to 5 years.
• The government created advances for small businesses that were unable to find financing. The state set aside GHS 500 million for SMEs whose activities were crippled by the pandemic and could not qualify for loans.
• The government amended the Finance Bill which outlined the requirements for companies that didn’t benefit from the state-guaranteed loans to get the state-granted loans. 

Distinguishing types of company profile

Our company’s eligibility for a certain sort of financing is based on a set of benchmarks. One of them is our company profile, which we must be aware of before applying for a loan. These are the various types of businesses that are available:

Companies

1. Entrepreneurs: this type of company is imagined and planned for but has yet to materialize. Its materialization depends on financing.

2. Start-ups: this refers to a business that exists but is still far from being stable. Getting financing for this type of business may not always be possible since many lenders prefer financing companies that demonstrate solvency. This type of business’s scale of operation still requires finances to keep it going.

3. Consolidated companies: these are companies that have gained ground in terms of operation. The company’s return is enough to keep it going and is solvent enough in case they take out a loan. Based on their solvency, such companies qualify for even big loans.

4. Large companies: they have a large scale of operation, probably national or international. Their financing needs are also huge, mostly in millions of Euros and Dollars, if not billions. For instance The Central Bank of Ghana, Stanbic Bank, and Absa Bank, among others. 

Self-employed

• As legal entities: this refers to a case where a professional owns a business and requires financing in some way. Financing will depend on the business’s scale of operation, whether a start-up or a consolidated company. However, the loan the professional receives is the type that’s tailored to a single person. 
• Natural persons: natural persons are people with some source of income that’s different from that of an employee. This implies that they can get personal loans to finance their particular projects such as buying a car or renovating their house.

Characteristics of business loans

The features of a business loan will vary with its type and the entity providing it. However, since basic rules governing business loans are outlined by the government, here are some of the most common characteristics you’re going to look out for in any type of business credit.

1. Cost: The cost of a loan is defined by its interest. A business credit with high interest rates will automatically affect the business’s stability and may make the repayment process strenuous. With France’s stable financial market, most business credits are affordable.
2. Amount: This parameter is determined by our business’s scale of operation. Small businesses will always qualify for smaller loans than big companies
3. Purpose: This may include working capital to have liquidity, investment to grow the business, obtaining goods, paying suppliers, or collecting invoices among others.
4. Linkage. Especially in banks, financing always comes with related products such as insurance, business accounts, or other products of mandatory recruitment.
5. Repayment period: this is also determined by our business profile and loan agreement. It may range from 3 months to 5 years.
6. Grace period: this refers to a period where the borrower is allowed to go without repaying the loan without attracting any penalties. 
7. Guarantee. Depending on the amount we request and our profile as a company, entities may require “payment insurance” with a guarantee or collateral.
8. Speed: This is the time that the bank or lender takes to release the loan. Some entities take 2 days while borrowers may have to wait for weeks with other entities. 
9. Repayment: This also depends on the entity’s terms of operation. An entity may require the loanee to make payments in monthly installments while others may require them to repay the whole amount as a batch at the end of the loan period, plus the interest.

Where to get business loans

Ghana| is far from the era where banks dominated the financial market. While banks still have a strong footprint in offering credits, there is a myriad of loan lenders and platforms offering credits. Let’s take a look:

• Banks: They offer loans to legal entities (with national registration) that have a high level of solvency.

• Companies and private capital lenders: Businesses getting finance from this type of lender have few requirements and, in effect, fast online applications. The loan processing happens online and is preferred when in need of quick funds. Their loan conditions are competent with bank services.

• Alternative financing platforms for crowdlending: through these online platforms, a borrower looking to finance a particular project is connected to an investor who will meet their specific needs. Since all the communication happens online, the processing of these credits is fast and may get us started in about 48 hours. 

Business loan conditions

Business loans tend to have more requirements than other loan types. While the credits are regulated by the Ghanaian government, different entities may add different requirements that are unique to them. What are the basic requirements that businesses in Ghana have to meet? 

• National Registration: Whether applying for a business loan as an ex-pat or as a native, many entities will only finance you if your business is registered with the Ghanaian government. This is how the entity will know that your business is legal and gain confidence that you’ll be able to repay the loan.
• Annual Income: To qualify for a business loan, you’ll need to demonstrate the ability to repay the loan by showing a record of your annual income. In this way, the lender will determine whether or not your business will afford to repay the loan.
• The seniority of the Company: While you may find loans for start-ups, other lenders will only finance you based on the time your business has been running. Some lenders will require the business to be at least 12 months old.
• Creditworthiness: while France lacks credit bureaus that record your credit history, banks are charged with the responsibility to determine your creditworthiness. Hence, it’s essential to repay all loans without breaching the agreement with your lender.

These conditions may be more or less strict, i.e. annual income must be more or less high depending on the entity or type of credit, and there may also be additional requirements for contracting to finance.

Documents needed to get funding

• VAT return from the previous year and the current year.
• Income tax return.
• Bank statement (if in another bank).
• An updated balance sheet of the company’s turnover.
• Proof of payment of Corporate Tax.

You might be required to send the documents online, via mail, courier, or by delivering them in person. Some entities might require more or less documentation.

Other forms of financing for companies

1. Business credit lines

With business lines of credit, the borrower can tap the money whenever needed until they reach their borrowing limit. The borrower will only repay the amount they have withdrawn and the interest attached, not the whole amount of the loan granted. Many lenders offer this product.

2. Factoring

This is a type of financing for SMEs where the lender pays for our invoices to one or more suppliers. We’re then left to clear the bill with the supplier either in full (the interest included), in part, or installments.

3. P2B or crowdlending loans

Through an online platform, a private lender may decide whether to invest in our business or not. With the emergence of different crowdlending platforms, you’ll receive different services as you move from one platform to another regarding the loan amount and terms and conditions.

4. Loans with mortgage guarantee

With these types of loans, we’re only funded if we can present property (mortgage) to be used as a guarantee. The concession of these loans takes longer because of the appraisal processes involved.

Products to invest in our company

Equity Crowdfunding 

This involves a group of people or entities who come together to raise business funds for a borrower. The borrower can sell their investment instruments such as business shares and the like through these online platforms. 

Business Angels

Business Angels involve funding borrowers with big projects that need big amounts of money. Business Angels investors shy away from small projects. Through the platform, borrowers connect with investors who would want to invest in their business and share the return in the agreed-upon portions. However, it’s the investor’s prerogative to finance you rather than an obligation. Please note that once you allow the investor into your business, they will always be part of your management.

3F (Friends, Family, Fools)

The 3 F’s stand for family, friends, and fools who could be a source of finance for our business. The conditions of the credits are ruled out and agreed upon by both parties. 

Aid for the financing of companies

1. Capitalization of unemployment

Under this category, an unemployed borrower makes the most use of unemployment benefits to source capital for coming up with a new business. 

2. Government Subsidies and Grants

There is a lot of government support to start or grow the Ghanaian government. Check out the Bank of Ghana website among other government portals to determine the eligibility of your business. 

About this page, our methodology

What is this page for? Our main purpose is to help you maneuver through your financial challenges. We explain to you the different types of credit available and give different options that you can compare.

Source: This information about personal loans had been sourced from The Bank of Ghana, the different credit reference bureaus in Ghana, Ghanaian laws on credits, and the different loan provider websites.

Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.

About FUNDGEKO: We are a website that provides credit borrowers with information about personal finance in terms of loan offers available to them. Furthermore, we give you data to support your quest for a dependable credit moneylender.Note: the services we offer are free for the user, as FUNDGECKO obtains its income from advertising and its featured products.