Entrepreneurs are the lifeline of any economy, as they have diverse range of services and products which benefit the populace and significantly improve the growth and development of the country. They do this by providing jobs and producing goods and services that meets various needs.
Entrepreneurs can raise business capital through various ways. Capitals raised may be little and cannot see to the full expansion of the business.
It has become common fact that chiefest among the challenges of entreprenuers, especially in Africa, is getting the needed start-up capital for business.
The inability to secure business loans without collateral has frustrated many entreprenuers with brilliant and promising business ideas. This ought not to be so.
This limited sources of finance frustrates the limitless potentials of many entrepreneurs , as banks hardly give loans to start-ups without collateral. However, in recent years, realising the importance of small and medium enterprises, SMEs, some banks has began to support start-ups, and they are now waking up to the importance of these entreprenuers to their own business. Some banks have realized how massively these entreprenuers contribute to the society and the amount of profits supporting the entreprenuers brings to them and which gave rise to most of the banks having directives to give loans to SMEs, and the likes with no collateral.
However, the recipient entreprenuers must be armed with good business plans which must contain the business profit strategies and its repayment plan for the loan etc. See how to write a bankable business plan.
With this article we aim to bring you abreast with banks that offer start-up loans to entrepreneurs with no collateral.
1. LAPO Microfinance Bank
This bank offers a wide range of loans to customers in respect to their needs and their loan facilities are easy to access. Cash loan of up to N5m can be given with a repayment period of 1year.
Individuals can apply for the loans by having an account with the bank, filling an application form with a means of ID. However, this bank usually favours businesses that are already off the ground and gives them loan as business growth funds.
2. RENMONEY Microfinance Bank
This bank provides customers with unsecured loans as high as N4m without collateral, and it is redeemable in 12 months for old customers while new customers have up to 9 months to pay.
The loans are available to anyone between the ages of 22-59yrs as long as a verified source of income is seen.
Loans can be given to business men/women or staffs in verifiable companies.
3. Wema Bank
This bank has been known to give loans to SMEs and iya olojas (market women) with flexible repayment plans that enables them pay.
WEMA bank gives loan as low as N100, 000 to N1,000,000 without collateral.
Loans can be given up to any amount and span for a duration of 1-5years.
All you have to do is get armed with your bankable business plans and a corporate account which has been active for a duration of six months to qualify for their loan offers.
Interest on loans can be calculated on their website, this enables you know the interest that your loan will attract.
4. Fidelity Bank
Fidelity Bank is similar to WEMA bank as they both have interactions with retail businesses from the grassroots and also give loans to start-ups businesses.
5. First Bank of Nigeria
First bank with its years of experience and growth is also a good bank to get Start Up loans as they give SMEs non secured loans which is aimed at empowering and improving economic growth in Nigeria.
Loans given by first bank is easily accessible as all you need to do is go through a test (psychometric test), pass the test and boom you will be qualified for the loan, be ready with your bankable business plans and business financial projections, your financial projections has to show how you intend to realise profits from the business and repayment plans. This enables you get the loan.
Be rest assured that first bank loans doesn’t take cognizance of your location, it doesn’t matter where your business is situated,be it rural or urban area.
6. Stanbic IBTC Bank
STANBIC IBTC loans are quite different from other banks as it is aimed at offering entrepreneurs loans to help purchase business equipments, and other business facilities.
The condition required to own the business equipments or assets bought with STANBIC IBTC loans is the assets become yours upon payment of the last Kobo used in purchasing it by the bank.
Requirements for STANBIC IBTC loans
1. Full names and portfolios of signatories
2. CVs of members of the team
3. Business financial statements
4. Statement showing reasons why the loan is needed
5.financial projections for a period of 12months
6. Personal assets statement of directors, members or partners
7. Source of income of management team and amount of equity provided by each.
My candid advice is before picking up STANBIC IBTC loans form ensure you are in need of these big equipments, and can meet up with providing the above terms.
7. Heritage Bank
Heritage Bank launched one of their major programs which is backed by CBN to promote SMEs in the country called YIEDP.
The program is aimed at supporting and providing affordable loans to young start-ups, Corp members, market women etc, that helps them achieve their entrepreneurship ideas and grows their community.
8. First City Monument Bank, FCMB
FCMB offer loans to female entrepreneurs at zero percent interest rate, and the loan amount can be as high as N5million with maximum duration of the above amount being 3months, the bank also provides loan benefactors with business trainings and mentors to coach them.
Loans can be assessed by filling an application form online.
9. Bank Of Industry, (BOI)
BOI focuses on providing flexible and long term loans to large, medium and small scale Enterprises, also to agricultural businesses, women empowerment initiative and youth entrepreneurship businesses.
BOI offer loans to entrepreneurs through various ways like GEF (graduate entrepreneurship funds) which is in collaboration with NYSC (national youth service corps) to give start up loans to serving Corp members who has undergone a training and has a bankable business plan to assess a loan up to 2million Naira.
BOI YES-P(youth entrepreneurship support program) is aim at entrepreneurs who has only ordinary school cert or diploma cert, it’s similar to BOI GEF loan and it includes capacity building for benefactors of the loans etc.
BOI YIP(youth ignite program) is aimed for micro businesses that needs little funding to set up, they get offered loan as low as N200,000 to grow their businesses. The aim of this loan is to have as much empowered youth as possible.
All BOI loans can be assessed by filling an application form in with the local government area of your state, ensure you have a strong bankable business plan.
The major advantage of BOI loans is its zero percent interest rate.
Before thinking of getting loans from banks, I would advice you exhaust all forms of obtaining financial help from families and friends, when that is done, you can turn to the bank for help.
Bank loans attract interest as low as 5%-25% on the loan, depending on the number of years the loan takes. Also before obtaining loan facilities, most banks require that you have opened and operated a corporate account with the bank for up to six months, prior to that period.
Do not forget that you will need to have a detailed repayment plan for any loan you wish to access.
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Which other banks give loans easily to entreprenuers? Let us know using the comment section below. If this article was of help to you, kindly share with friends using any of the social media platforms at the top or bottom of the article.
About The Writer: This article was written by Salome Precious. She is senior content developer at myafribusiness.com. She is an accountant by training and a business enthusiast by passion.
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