Nigerian Banks That Will Give You Business LoanAbbakin
So you’re thinking about how to get a business loan in Nigeria without collateral? In this article, you are going to find out the 5 Nigerian Banks that will give you business loan without collateral. Please note that the success of any business venture is not dependent on bank loans; what matters most is the business administrative styles, cash flows management, effective marketing strategies and customer satisfactions.
Experience, knowledge of the target markets and the understanding of your customers’ needs are required if you want to run a successful business in any economy. You will also need responsive website designs, social media marketing, corporate branding and search engine optimization strategies to grow your business, increase your online visibility and make more sales.
If you’re looking for loan for business startup, personal or car loan opportunities in Nigeria, you need to contact your preferred online or offsite lender and fill out their loan request forms. You may find business funding sources in Nigeria that are right for you. Yes! It’s true that most Nigerian Small and Medium sized Enterprises (SMEs) are having hard times starting and growing up their businesses due to their inability to access business funding.
In fact, one of the major reasons that often kill great business ideas and perhaps the dreams of most Nigerian entrepreneurs is their inability to meet the requirements of obtaining a bank loan or accessing government loan or grants due to bureaucratic bottle necks. “Cash is cow and no business can run without it.” Usually,
An Entrepreneur Could Raise Business Funds Through:
Today, we’re going to discuss how to get business loan in Nigeria through the banks.
Banks – whether commercial, industry or development banks; online or micro finance banks naturally offer the least interests funding for SMEs in Nigeria. Banks generally charge between 5-25% interest rate (and more), for 1-5 years short-to-long term business loans. In Nigeria, you can obtain bank loans as small as ₦50, 000 and as big as ₦100 Million Naira depending on the scope of your business.
However, if you are thinking of raising business capital through the banks, you should note that bank loans are usually secured; hence, you’ll need to provide collateral before you can be considered for a loan approval. Interestingly, some Nigerian banks have awakened to the reality that most start-up entrepreneurs in Nigerian have only solid business ideas behind their heads, and no collateral to show for their loans.
Some of them are now willing to offer startup business owners and entrepreneurs some certain amount of money in the form of business loans without collateral. This effort may be as part of these banks’ initiatives to empower growth in the Nigeria SME subsectors; by giving out small to long time loans to businesses or organisations that need them.
According to research, we have put together a list of 5 Nigerian Banks that will give you business loan without collateral; but we asked that you take some time to find out more about the loan options that suit your financing needs. The great thing about these SME business loans is that they are designed to be easily accessible to entrepreneurs, irrespective of the type or size of their businesses.
5 Nigerian Banks that Will Give you Business Loan without Collateral
#1. First Bank Nigeria Plc
The First Bank of Nigeria has made plans to provide collateral free loans to Small and Medium Enterprises in Nigeria. This initiative of the bank is aimed to empower economic growth in the Nigeria SME sector through their loan schemes.
The great thing about First Bank’s unsecured loans is that it is easily accessible to entrepreneurs irrespective of their business type, location or size. As an interested entrepreneur, the only thing you need to do is to go through a psychometric test, and then provide the bank with your winning business plan and your business financial projections. And soon you will get your disbursement alert!
#2. Heritage Bank
Heritage Bank has also increased the easy accessibility of SMEs business funds in Nigeria. The bank has also built initiatives around promoting access to the market for SMEs. One of their major programs is their Youth Innovative Entrepreneurship Program (YIEDP) backed by the Central Bank of Nigeria – in recognition of its commitment to SME and Youth development.
This programme is aimed at harnessing the talents and entrepreneurial spirits among the teeming Nigerian youths – by providing timely and affordable loans to help them implement their business ideas. Also, the fund is to support youth corps members, market women and whoever desires to access business finances through short –term borrowing from the bank.
#3. Guarantee Trust Bank Plc
GTBank Plc also offers entrepreneurs opportunities to obtain loans without collateral. The bank’s non-collateral loans are designed to stimulate growth for Micro, Small and Medium Enterprises (MSME) in Nigeria. If you want a loan without collateral, you’ll have to look at the bank’s SME loan packages and choose the one that is best for your kind of business.
GTBank’s SME loans can be accessed in the form of: Revolving Credit, Installment Loan, Local Purchase Order (LPO) Finance and Contract Finance. The Bank gives you access to short and medium term working capital; as well as assets purchase, with reduced collateral requirements.
They provide smart financing options that allow organizations to build on their successes and plan for growth opportunities through quick cash flow solutions. This is aimed to support your business financial needs by withdrawing money with no funds accounts, and using SME friendly accounts opening process that can be setup quick for your business.
#4. Access Bank Nig. PLC
Unlike other Nigerian banks, Access Bank has more dealings with retail businesses. The bank has built its structure around retail banking, conducting transactions with market women and real SMEs just like Fidelity Bank.
It is possible that the bank can give business loans from ₦100,000 to ₦1 million without any collateral. Yes! All you need to do is to open a corporate account with them and have steady transactions for 6 months to qualify for their loan offers.
To show their eagerness to give out these loans, the bank has integrated loan calculators on its website – which can helps interested loan applicants to calculate how much loan they would be collecting after the loans approval requests.
#5. Stanbic IBTC Bank
The Stanbic IBTC Bank offers Nigerian entrepreneurs a great opportunity to obtain business loans without providing collateral. These loans are designed to help SMEs buy their business assets, sales supplies and other business facilities. However, the assets you acquired via these loans can only become your own officially – when you have made the last payment on the received loans.
Just like most commercial banks in Nigeria, if you want to apply for the Stanbic IBTC non-collateral loan, you should be prepared to provide the bank with the following information:
Stanbic IBTC Loan Application Requirements
- The full names and capacities of those who will sign;
- CVs of each members of the management team;
- The reason why you need the business finance;
- Your business’ financial statements, including an income statement, balance sheet and cash flow statements;
- Personal statements of assets and liabilities of all the partners, members or company directors;
- A 12-month cash flow forecast or business financial projections;
- The shareholders equity contribution and the payback source of the funds.
Finally Words: Nigerian Banks That Will Give You Business Loan Without Collateral
Today, there are so many money lenders and lending platforms in Nigeria that can promise you quick and easy agriculture investment or business loan without collateral; education, mortgage loan, salary advance, rent or personal loans within 48hours; which you would have to pay later with interest. But if you are really interested in starting or growing your own business, it is most likely that you will have to start with your own savings; or borrow some money from your rich friends and family members.
One thing about getting a loan in Nigeria with a promised low interest rate is this; commercial banks do ask for collateral and give interest at 20-25% per annum. Micro finance banks like LAPO and other lending houses will ask for guarantors and collect minimum interest at 5% per month or even more. While some of the online quick lenders in Nigeria do not collect collateral or request for guarantors; they may give interest at 12.5% with access to your account details like bank verification number (BVN) – which may put you at risk in the future.
According to the CBN guideline, each bank is entitled to charge a rate they choose; provided this amount can compensates their risk intake. So these are the expected interest rates charged by most Nigerian banks on loans applications. They may also include all levies, processing fees, and commissions where applicable. The high interest rates charged by financial lenders in Nigeria are to help them cushion the effect of the high loan default cases they experience.
Therefore, before you approach any of these banking institutions for a non-collateral loan or so; it would be in your best interests to first know more about their services. Open and maintain an account (corporate preferred) with them for a period of 3 to 6 months before making your business loan proposals. You should also need to arm yourself with a sound business plan and a well thought-out loan repayment plan.