Here is a quick guide on how to get a loan in Nigeria for your Business.. If you have a killer business idea, don’t allow it to die, all you need is to find a startup capital to fund it. There are many sources of funding for your business idea, one of them is loan.

A loan can simply be defined as a thing either money or properties that is borrowed or lend, mostly a sum of money that is expected or ought to be paid back with interest.

In terms of finance, a loan is a debt provided by one entity (organization or individual) to another entity at an interest rate, and a signed evidenced or document by but parties which specifies, most require information’s such as: the principal (the amount of money been borrowed), interest rates e.g. 10%, and repayment date.

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Loan also entails the reallocation of the subject asset(s) for a period of time, between the two parties i.e. a lender and the borrower.

In the definition above you will notice that I highlight the term interest or interest rate. This is because most people in Nigerians seem to forget that they will have to pay certain amount of money as agreed rate as well as the principal when taking a loan.

Most time after taking a small loan (let’s say you take a loan of the about #100,000) you might end up paying twice the amount you actually borrowed due to the high interest rates. So when taking a loan from an organization or individual, always look out for the interest rate. The higher the interest rates of the loan, the higher the total amount you end up paying.

There are various types of loans in Nigeria which are

1. Secured Loan is type of loan in which the borrower pledges some asset(s) (car or property) in form of collateral. An example of secure loan is mortgage loan
2. Unsecured loans are monetary loans that are not secured against the borrower’s assets. Such loan may be available in your bank under many different guises or marketing packages: credit card debt, personal loans, bank overdraft, corporate bonds (may be secured or unsecured), individual lending
3. Short term loans or Demand loans are loans that are typically in that they do not have fixed dates for repayment and carry a floating interest rate which varies according to the prime lending rate. They can be “called” for repayment by the lending institution at any time.
4. A subsidized loan is a loan on which the interest is reduced by an explicit or hidden subsidy.
5. A concessional loan sometimes called a soft loan, is granted on terms substantially more generous than market loans either through below-market interest rates, by period of grace or both. These loans may be made by foreign governments or NGO to developing countries or may be offered to employees of lending institutions as an employee benefit.

By now you should be thinking or asking the question “where can I get/access a loan?”.

Getting a loan from an organization or individual is not as difficult as most people think. The problem is mostly that of huge communication gap and knowledge gap between the lender and the borrower and not really unavailability of funds or unwillingness of the organization to give out loans.

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In Nigeria you can get a loan form the following organization or individuals

1. Banks
2. Corporative societies
3. Micro-finance banks
4. NGOs
5. The government (state or federal)
6. Individuals

Getting a loan from a Bank in Nigeria

This article is going to focus on how to take/get a loan from the banks in Nigeria and shall be limited to First bank Nigeria.

Please note that almost all bank are Nigeria give loans to customers and they all have their various polices, despite their differences, most of these policies are similar and this article will give you a general view/ concept of how to get a loan in Nigeria.

First bank Nigeria have various types of loan accessible to their customers based on some polices and like I said these policies may be similar for all their various types of loan. Such loans are:

1. Secured term loan
2. Secured overdraft
3. Agricultural financing
4. SME product financing
5. Office equipments loan
6. FirstEdu loan
7. Commercial mortgage e.t.c

Before you access a loan at first bank Nigeria you will need to have the following

1. Open a new account with the bank
2. Run your account for six month
3. Application letter
4. Duly completed Loan Application Form
5. Proforma Invoice from FirstBank approved vendors
6. Company Profile
7. Current ultility bill
8. Latest Audited Account
9. Other KYC requirements for opening a corporate account.
10. A Collateral: either real properties or treasury bills/fixed term deposit can be used as collateral. Properties that may be accepted as collateral must have either of:

• Government issued Certificate of Ownership(C of O)
• A registered deed of Assignment or Deed of Sub Lease (Deed of Conveyance also accepted)

The collateral policy

After reading this I know you might be scared of the collateral policies, and you might be thinking or saying I don’t even have any property not to talk of a property with a government issued certificate of ownership.

But believe, there are other loans you can access without collateral such as CAR loan, you can receive a car loan form a bank without collateral because the car itself will be use as a collateral but mind you there are policies by the bank (the bank might require you to pay the cost of insurance for the car, this way if the car is stolen or had a accident the insurance company will refund the bank.

For further information you can contact you bank customer care office of you bank.

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