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 Business Loans in Nigeria, Everything you need to know.
Union Bank of Nigeria
- Provides a loan limit of up to N15 million
- Attractive interest rates ranging from1% to 3.75%
- Offers a loan tenure of up to 5 years
- Gives a salary domiciliation of one month
- Offers a wide range of purpose
- Easy application procedures
- Applicants with income are considered
- Fast payout
- Offers both secured and unsecured loans
United Bank of Africa (UBA)
- Get a loan of up to N30 million
- Floating interest rates
- Flexible repayment period of up to 60 months
- A one time management fee of 1%
- Less strict eligibility criteria
- Offers loans for various purposes
- Fast application process
- Income stability is considered
- Loan disbursement within 48 hours
Standard Chartered Bank
- Offers loans up to N20 million
- Long repayment terms of up to 60 months
- Offers friendly interest rate of 1.08%
- Flexible for short and long-term borrowers
- Does not require collateral or security
- Fast concessions
- Laxer application requirements
- Offers unlimited loan purpose
- Does not charge processing fees
Business Loans in Nigeria, All You Need To Know:
We are committed to providing you with all the pertinent information on business financing. We give you the information you need to understand the terms and circumstances of credit loans, as well as the contractual guidelines and written loan criteria. This will assist you in weighing all of your possibilities before choosing one to pursue.
[UPDATE] What Economic Measures has the Government Implemented for Companies Through Covid-19?
In the majority of economies around the world, the pandemic shattered financial trends and patterns. When the pandemic’s consequences did not result in further havoc, the Nigerian government intervened. To protect businesses and other financial institutions from the negative impacts of COVID-19, it offered safeguards and rules.
- The Central bank of Nigeria approved economic boosting measures on 16th March 2020 which include:
- Reduction of interest rates charged on all commercial loans from 9% to 5%.
- More credit facilities were extended to SMEs and private sectors that were adversely affected by the pandemic.
- A credit facility of 50 billion Naira was created to support the most affected households and start-up companies. This was accompanied by reduced loan restrictions, which enabled them to diversify their loan access.
- An intervention fund of N100 billion was issued as healthcare loans to build capacity in healthcare sectors and their professionals.
- It authorized a release of N1.1 trillion to the most critically affected sectors to boost continuity to the foreseeable future.
- All Federal government loans, MarketMoni, and TraderMoni loans were suspended for 3 months.
- The filing of tax returns due dates was extended to the last day of the month. It was done on the 21st day there before.
- All the companies that got an obligation to close up were fully subsidized on their fixed cost to prevent further losses earned by these companies. Municipalities were allowed to postpone their corporate tax due dates and pay taxes at reduced interest rates.
- For banks and other financial institutions to expand their pool of funding sources and provide credit clients with better access, lower interest rates, and longer payback terms, the government decided to grant loans to these institutions.
- All social security contributions were postponed to a further date The government introduced match funding which aided growth in entrepreneurial activities.
Distinguishing Types of Company Profiles
When deciding what kind of business loan to take out, some economic factors serve as a benchmark. Company profiles offer a clear picture of the organization’s size; therefore, they should be carefully studied before applying for a loan. Here are a few of the many different sorts of company profiles.
- Large companies- These are businesses with enormous business profiles. They are distinguished by active operation on a local or global scale, capital-intensive initiatives, and corporate management. To finance their operations, such businesses should think about taking out sizable business loans.
- Consolidated companies- These businesses have agreed to merge, either in equal parts or by each company purchasing the others. This is done to increase production while lowering costs. They should take into account larger loans given their impressive profile.
- Start-ups- These are new enterprises whose operations have not yet become sufficiently steady, and whose incomes are also unstable since the analysis between expenses and income flow is not sufficiently obvious. To prevent bankruptcy, businesses with this profile should seek loans with lesser limits.
- Entrepreneurs- These are enterprises that are still conceptual and haven’t yet been transformed into legal entities. lower loan restrictions
They are considered a one-man’s business and can be differentiated into two:
- Natural persons: Natural individuals are those who derive money from sources other than employment. This suggests that they can obtain personal loans to pay for their undertakings, including automobile purchases or home renovations.
- Legal persons: This case involves a professional who runs a business and requires finance of some sort. Financing will depend on how big the operations of the business are, whether it is a start-up or a consolidated enterprise. However, the loan is a unique kind that is only for the professional.
Characteristics of Business Loans
Depending on the company providing the loan, various organizations have various qualities. However, business loans generally have a few traits.
- Loan purpose: Before any loan is given by the lender, a borrower should have the major purpose of taking a loan to avoid wastage of the acquired funds
- Loan limit: Every business loan has a maximum, which varies depending on the organization. These loan restrictions are determined by the borrower’s dependability, maturity, and faith in the lending institution.
- The repayment period and terms: There is a predetermined time frame during which you must repay the lending institution in full for all business loans. The terms of the lending firm or the loan amount supplied to define the time limit for repayment.
- Interest rate and other attached costs: Every lending institution charges interest on loans taken out. Depending on the loan limit, these rates vary from one lending company to another. Sometimes interest rates on small loans are higher. Penalties and fines are examples of additional borrowing expenses.
- Payout period: This is the length of time the lending institution requires before crediting the borrower’s account. Compared to other types of loans, the majority of internet loans feature a quick payout.
- Guarantee: Most lenders will require a borrower to offer collateral or security for the loan. This helps to safeguard the loan amount applied
- Grace period: This is a period between loan reimbursement and making the first loan repayment. This period is usually offered by the lending entity based on their agreement and trust in the loan borrower as it is quite risky.
Where to Get Business Loans
Nigeria offers a wide variety of lenders and is an industrialized country. However, banking institutions have historically dominated the credit lending market. In recent years, additional microfinance institutions and platforms have developed, competing with banks by providing loans. Let’s check it out instantly:
- Banks: They are the major loan lenders with higher loan limits compared to other organizations. Banks have a wide range of credit offers hence able to accommodate all types of borrowers. Loans offered in banks have more formalities compared to online loans.
- Alternative financing platform: Online platforms connect investors to lenders who provide diverse loans, and their terms and conditions. Investors will be able to make online applications that are quite flexible for quick loans.
- Private credit lenders and other capital lending companies: Acquiring a loan from a private entity does not require a lot of formalities. Borrowers prefer taking loans at such private institutions to avoid the long procedures and slow payout rates. Though they have low loan limits, they have friendly interest rates compared to bank loans.
Business Loan Requirements
There are additional conditions for business financing. Entities have varying standards, therefore a borrower should always make sure they are met to keep their loan for that amount from being canceled. These specifications include:
- Fixed income: Most lending organizations in Nigeria will require a loan borrower to have a fixed income source. This proves the ability of the borrower to make the necessary repayment to the lending entity.
- Proof of previous credit history: A borrower is required to prove their credibility to the lending organization as their previous records are transparent enough to rely on.
- Nationality proof: Present a national identification card, a valid passport, or a driving license to prove your residency.
- Nigerian bank account: Loan lenders will require you to have an account with their organization for easier and safer disbursing.
- Company profile: A company profile is necessary to determine the loan limit to be offered, a start-up company cannot have the same loan limit as a consolidated company.
A borrower is encouraged to examine the lending company’s requirements to make sure they comply with all of the requirements needed by that business since the above list of conditions may not cover all of the needs needed by the lending organization.
Documents Needed to Get Funding
- Company profile to determine loan size
- Salary slip to show income flow
- Certificate of registration
- A bank statement if the loan is from other banks.
- Tax compliance certificate if requested.
- Loan clearance certificate from a previous lender.
All these documents are submitted together with the loan application online and the borrower should ensure compliance with all the required documents to be eligible for a loan by the lending company.
Other Forms of Financing for Companies
- Crowdlending loans
A private lender might decide to use an online platform to invest in our business. As you go from one crowdfunding site to another, you will get different offerings. They consist of loan amounts, conditions, and terms.
- Mortgage guarantee loans
This type of funding is quite limited as we are funded with the condition that we present a mortgaged property that acts as a security or guarantee. This method of funding has slower concessions because it has appraisal processes attached to it.
- Business credit lines
This kind of financing is particularly intriguing because the borrower is required to take out loans up to the set amount until the loan cap is reached. The loan repayment terms are also more lenient because the borrower is only needed to pay back the loan amount used plus interest. Funding is more desirable because not the entire loan amount is borrowed.
- Factoring funding
This is majorly applicable to small business enterprises. Is applied when one lending entity settles payments for our invoices of more than one supplier. It becomes our duty to clear the outstanding bill with the supplier as per the agreed conditions.
Products to Invest in our Company
Equity crowdfunding happens when several persons or groups band together to raise money for a specific borrower. The beneficial online marketplace allows the borrower to sell some of their financial instruments, such as shares.
3F (Friends, Family, Fools)
The 3 F’s are for Fools, Friends, and Family who are reliable as a source of financing for our business. The rules, policies, and terms are agreed upon by the parties involved in coming up with one conclusion.
Borrowers that need a lot of money to fund their big initiatives are called business angels. Through the website, debtors can get in touch with investors who are ready to back their business and divide the earnings according to the agreed-upon percentages. But the investor has the option to finance you rather than being compelled to. Please be aware that once an investor joins your business, they will become an integral part of your management.
Aid for the Financing of Companies
- Capitalizing unemployment: Here, the unemployed debtors are given preference over any available unemployment benefits. This aids them in raising sufficient finance to launch new enterprises and earn more money.
- Government grants and subsidies: The growth and development of small, medium and big businesses are heavily supported by the Namibian government. Upcoming entrepreneurs should utilize the resources available to them to finance their ventures.
About this page, our methodology
What is this page for; This platform’s main goal is to make sure that we give you accurate information on the numerous financial solutions that are accessible and appropriate for your needs. We foray into the financial markets and gather all credible data on the different types of personal loans offered, their conditions for application and repayment, and current patterns. This aids in the development of exposure skills in selecting the best alternative.
Source: Information regarding all regulations governing online consumer credits is derived from Credit Control Authority laws, government portals, and the Central Bank of Nigeria among other referential sources.
Methodology: Through online research and consultation of the official statistics of the aforementioned reference sources, the information in terms of amount, terms, and interest, was acquired.
About Us: FUNDGECKO is a website that compares prices for products with a focus on personal finance and home improvement. We guide how to assess the options, do the proper evaluations, and select the one that has the fewest constraints on your budget. We also provide advice on how to make good financial decisions.
Note: There are no charges attached to any of our services, as FUNDGECKO obtains its income from advertising and its featured products.