How to Get Small Business Loan from Nigerian Banks

Let’s talk about getting small business loan from Nigerian banks (Also applicable to banks in other African countries).

One of the challenges of running and expanding a small business in Nigeria is getting access to funds to finance the business. People usually start their businesses with money they have saved and, sometimes, donations or loans from friends and family. Sometimes, money from these sources are not enough to really grow a business, and so the business owner starts looking for other ways to finance his venture.

How to Get Small Business Loan from Nigerian Banks

Some business owners say that banks are not willing to lend money to small businesses. This is not the case. The issue, many times, is that business owners do not know how to organize and present their businesses in a way that will help them get money from banks.

Here are five simple ways through which you can increase your chances of getting a loan from a bank, and grow your business.

  1. You must understand why banks give out loans in the first place. Banks give out loans because they expect to be paid back. They will therefore only lend to a business purpose that they think is sound. A bank will not lend you money unless you can show that bank that you have a good business plan and that you will use the money that you are given as your business plan says.
  2. The second thing is your reputation. Do you have a record of borrowing from banks and repaying what you borrowed? Or have you borrowed from other banks and not paid back? If you have a track record of not paying loans you have taken or issuing cheques which bounce, most banks will not be willing to lend you money.
  3. Do you have a good accounting system in place for your business? Many banks will only lend to businesses that have a good and accurate accounting system. The accounting system must show that the owner’s accounts and the accounts of the business are separate. The accounting documents which banks like to see before they lend you money for your business are the profit and loss account of the business, the balance sheet, the cash flow statement and etc.
  4. Are you familiar with your industry? It is easier to convince a bank to lend to you if you are able to show that you understand the industry that you do business in and, that you understand the value that you bring to that industry. Do you know who your major competitions are? What do you offer that they do not or cannot? How do you intend to win a bigger market share over time? If you can show that you understand your competition and how to get ahead of them, banks may consider your business a good one to support.

5. Be persistent: Many small business owners try just one of two banks and then give up on their goal of getting a loan because they have been rejected. It is important to know that banks have different business areas in which they focus. They also have different areas of knowledge. Some banks prefer to lend to really big companies while others prefer to lend to small or medium sized ones. If you really need a loan, don’t give up after trying just one or two banks.

If you have a good business plan, keep the right accounts and find the right bank, chances are that you will get the loan that you are looking for to grow your business.

This article was brought to you courtesy of Wema Bank as part of The Bankers Committee Financial Literacy Public Enlightenment Programme.

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Francis is a Passionate Social Entrepreneur. Love discussing new trends in Business and Marketing. A Startup consultant. A good listener. Love to help that your business grow.

Comments

10 Responses

  1. Glenn Baker says:

    My name is Glenn Baker and i live in USA Florida and i am a happy man today, I told my self that any Loan lender that could change my Life and that of my family, i will refer any person that is looking for loan to Them. If you are in need of loan and you are 100% sure to pay back the loan please contact them and please tell them that Glenn Baker referred you to them. scottlarry918@gmail.com

    Glenn Baker

  2. robolt smith says:

    .Hello,Do you need an xmas loan or any other kinds of loans either to establish your business, pay off your bills, e.t.c. We give out long term
    loan for five to fifty years maximum at a very low interest rate. and You are 100% Guaranteed with no social security number, no credit
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  3. bryce knorr says:

    WHERE TO GO WHEN THE BANK SAYS NO

    Banks take into consideration dozens of factors when reviewing a loan application and it can be difficult to fit their exact criteria and get approved. However, there are still options out there for you. Here are 2 alternative options you can pursue that may help you find exactly what youíre looking for.

    (1)Small Business Administration (SBA) Loan Programs
    While the government is not the direct lender, it works with microloan providers, banks, and other institutions both local and international and supports entrepreneurs by laying down certain regulations for the lending procedures. You can choose from the SBA Loan, equipment loans, short-term loans, investment loan and many more….

    (2)Alternative Finance Sources
    There are several lending institutions that offer small business loans without the strict criteria that banks have. They may be open to funding your business loan despite low credit scores, lack of collateral, or insufficient monthly revenues.

    Banks are no longer your only option to obtain working capital; and you donít need to wait for long processing times or submit elaborate paperwork to get approved. Instead, consider using one of the many alternative lending institutions so you can get the small business loan that best fits your business and its needs.
    Whether it’s an SBA loan you’re after, or an alternative finance source, KIVA can help you get the loan you need.If you are interested getting a loan or you need more information, email us today via (info.kivafunding@gmail.com)

  4. AKPAN, MICHAEL ELIJAH says:

    How are we sure that this is not another new story again? How would somebody be certainly sure it is real? I am interested because as an entrepreneur i need to break more grounds for investment.

    • This is a sponsored post by WEMA Bank. They have given you tips that will increase your chance of getting loan from a bank. Why don’t you give it a try Akpan…

      • MACQUINE OBI says:

        SIR, AM MACQUINE OBI by name. Am a creative PHOTOGRAPHER/CINEMATOGRAPHER, AND I NEED FUND TO CREATE/DEVELOP AN ENTERTAINMENT HOUSE, THAT, NOT ONLY TO MAKE PROFIT BUT ALSO TO CREATE IMPACT IN THE EDUCATION OF PRIMARY AND HIGH SCHOOL LEVEL. MANY CREATIVE CONCEPT YET TO BE DEVELOP IN NIGERIA AND I NEED HELP OF FUND

  5. Terry says:

    Federal government is giving out empowerment loan to full time business men and women with a little interest and percentage in conjunction with NEF and CBN. I urge you to take this chance to better your lives and help limit the problems of unemployment. Interested persons should contact the Nigeria Entrepreneur Forum NEF on +2348056377915, +2347067709118 or via mail terryfastloan@gmail.com

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