How To Get Business Loan in Nigeria

Getting a business loan is one of the major ways to finance your business without stress or worry about your personal finances not being enough.

Over the years, we can confirm that business loans have really helped in building so many businesses and are still doing so.

In this article, we are going to give you a step-by-step guide on how you can get a business loan to fund your business.

What Is a Business Loan?

Business loan is the money given to a business exclusively for the use of the company or business. The money being lent to the business will be repaid with interest over the long term agreement.

Business loans can be used for different types of things that would help in the growth of the company or business.

How Does Business Loans Work

For you to get a business loan, you need to apply through people called the lenders. These people have the right to decide whether to give you the loan or not, depending on how good or bad you met up to their terms and conditions or requirements.

If you accept the terms the lender gives, you will receive the loan amount you seek and the repayment will also be done based on the agreement you have with the lender.

For you to be eligible depends on so many factors which might include your credit score, trading history. For banks, they will look at the cash flow in your account and your credit history before deciding on what to do.

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How Long Does It Take To Get a Business Loan

The good thing here is that it doesn’t take a long time for you to get a loan, it takes just a few hours to secure the loan but in some cases it will take some weeks.

The actual time depends on some factors like the type of loan and who is your lender. For those that are going for secured loans, it will take some time to get it done while unsecured ones doesn’t not take a long time to get.

How Much can a Get On Business Loan

Your company might qualify for a loan ranging from £1,000 to £15 million. The repayment time can be as short as one month or as long as 15 years.

You can figure out the cost of the loan by using a business loan calculator. Just enter the amount you want to borrow, the yearly interest rate, and how long you plan to repay the loan (like two years), and it will show you how much the loan could cost for your business.

Advantages of a Business Loan

  • Immediate Business Growth: Access cash for business expansion without relying on incoming revenue.
  • Retained Control: Retain full control over your business without relinquishing ownership.
  • Funding Flexibility: Enjoy flexibility in allocating funds to various business needs.
  • Predictable Repayment: Benefit from fixed repayment rates for better financial planning.

Disadvantages of a Business Loan

  • Stringent Eligibility Criteria: Meeting the lender’s strict eligibility criteria is a prerequisite.
  • Higher Interest for New Businesses: New businesses may face higher interest rates due to limited trading history.
  • Partial Loan Approval: Lenders may not approve the full requested loan amount.
  • Credit Rating Impact: Defaulting on payments can negatively impact your credit rating.

What is the Loan limit?

Your business may qualify for a loan ranging from £1,000 to £15M. The repayment period can extend from one month to 15 years. Utilising a business loan calculator allows you to assess the financial implications of your intended borrowing.

Input the desired loan amount, the provided annual interest rates, and the selected term duration (e.g., two years) to estimate the potential cost of the loan for your business.

Informations Needed To Get A Business Loan

To submit your small business loan application. Depending on what lender you’ve decided to work with, you can do this online or in person.

Here’s some information a lender might ask for:

  • Your name
  • Business name
  • Social Security number (SSN)
  • Desired loan amount
  • Loan purpose
  • Business Tax ID
  • Annual revenue

Once you submit your application, you’ll have to wait for an approval decision. If your loan is approved, a lender will send you a loan agreement to sign before issuing your funds or a line of credit you can draw from.

Conclusion

To wrap it up, getting a business loan follows a step-by-step process. Once you’ve figured out if you qualify and decided on the loan details, the last thing to do is apply. You can do this either online or by visiting the lender in person. When you apply, the lender will ask for important info like your name, business details, and why you need the loan.

After you’ve submitted your application, you wait to hear if it’s approved. If it is, the lender will send you a paper to sign called a loan agreement. You need to sign this before they give you the money or let you use a line of credit. That’s the end of the process – you’ve completed your business loan application.

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