Skip to main content

What do I need to get a business loan?

For business owner who plan on accessing loans either from the government or commercial banks, here are some of the essential requirement:

1. Registered Business Name:
this implies that your business name must be registered by the Corporate Affairs Commission (CAC).

This shows that your company is legally recognised and also has clearly defined scope of business.

This is a major requirement for any kind of business loan including Agriculture loans

2. Corporate Accounts: having a bank account for your company that is different from your personal account can so it makes it easier for the bank giving the loan. As it becomes easier for them to track the cash flow the business.

Although, there can be some exemption to this depending on the terms of the financial institution. But if you're planning on getting  a sizeable amount of business loan  either from the government or commercial banks in the nearest future it is advisable to open a corporate account for your business.

3)Business plan

A business plan is a document that shows among other things the business goals, it's financial projections and strategies showing how these goals will be implemented.

It indicates that the whole process has been carefully thought out and planned. This is perceived as a way of increasing the chances of business success.

4) Business  Records : 
This involves the act of book keeping. These are records that show a list of your business expenses (such as cost of raw materials, transportation, rent, staff salaries etc) and income over time.

Asides from the fact that it provides data for the accountant to work with when the time comes.It also helps the bank in determining the financial capacity and status of your business. 

But oftentimes most small and medium enterprises (SMEs)  do not keep records simply because there is no third party to give account to.

Therefore, it becomes a difficult task when the bank begin to ask for financial books;.

5. Collateral:
this is often required as form of guarantee by the bank just in case there is a default in the loan repayment. This can be in the form of properties or other assets as specified by the bank.

However, it is not every time that banks request for collateral before issuing out a loan. Sometimes an active business account with some banks can be a form of qualification.

Also, some government loans do not require collateral.

6)Guarantors:  Guarantors are people that will stand as sureties for you. Provision of quarantors depends on the conditions provided by the financial institutions involved.

When is it advisable to get a loan?

If the demands for your goods have exceeded the supply, then you may need cash to expand your business to meet the growing demand.

The only time to consider taking a loan is when you have exhausted every organic or internal source of raising funds or credit purchases from your suppliers.

What type of loan should I get?

There are many factors that should be considered before taking any loan

1) Interest rate :
this is the amount you will pay as a charge for using the credit facility. Always ask questions for clarity. If a loan is said to have a 2 percent interest rate, ask if it is for a monthly or annual basis. This is because that will cumulate to 24 (2x 12) percent if it is on a yearly basis.

That means for every hundred thousand (N100 000) Naira borrowed, a hundred and twenty four thousand (N124 000) Naira will be paid back over the course of one year.

That amounts to roughly a ten thousand four hundred(N10,400) Naira repayment monthly that is if there are no other hidden charges.

2) Other charges: there will be need to ascertain if there are other charges attached to the lending asides from the interest rate.
This will help inform your decision.

3) Financial status of your business: you need to be sure if your business has the financial capacity to pay back the loan within the specified period. As you do not want a loan that can damage the financial health of your organization. Rather one that can help grow your business.

Here are a list of websites to watch out for if you are in need of low interest loans as a business owner 

Jumoke Ayeni 


  1. This article contains a lot of valuable info. I am amazed by the quality of the info and also it is a beneficial article for us, Thanks for share it.Online Business Loans For Startups


Post a Comment

Popular posts from this blog


This season of global shutdown has so many lessons enbedded in it. Among which one of the most profound insight for Agripreneurs and business owners generally is to explore more avenues of making money from their business. Before now, traditional approach to increasing revenue in most agri-businesses (especially) in Nigeria were usually tied to business activities that can only be carried out physically.  But at times like these when covid 19 pandemic is challenging all the physical structures of doing business, it has become imperative to have online structures that can keep money flowing in. Here are 5 ways to creating Online income streams in your Agribusiness. 1)Online Orders and sales: Having online platforms where customers can make enquiries and place their orders which results into sales is very essential. However, you must also be ready to listen and respond to feed backs from them. Examples of these platforms includes social media, and websites. 2) Record

NIRSAL Microfinance Bank is giving out Loans without collateral

The Nigeria Incentive-Based Risk Sharing system for Agricultural Lending ( NIRSAL ) Microfinance Bank has an ongoing low interest rate credit scheme called AGSMEIS . What is AGSMEIS ? The Agri-Business/Small and Medium Enterprise Investment Scheme is an initiative to support the Federal Government's efforts and policy measures for the promotion of agricultural businesses and small/medium enterprises (SMEs) as vehicles for sustainable economic development and employment generation A) Eligible industries 1)Creative & Art industries 2)Fashion, Beauty 3)Apparel & Textile 4)Arts & Entertainment 5)Industrial & Manufacturing 6)Agriculture & Allied Processing 7)Automobiles 8)Information & Communication Technology 9)Telecommunication 10)Media & Publishing 11)Hospitality 12)Catering & Event Management B) How Does It Work? Step 1: Get Trained Attend a compulsory training with a CBN certified Entrepreneurship Development Center (EDC


Recently, I heard on CNN that the price of crude oil price fell below low a dollar, this was said to be as a result of excess supply. Which happens to be an offshoot of the lock down period when people  are mostly in doors.  I have seen people generally expressing fears about the likely negative outcomes on air and social media. But until we come to the realization of the fact that the new crude oil is in us, we may not see a way forward.  The only thing about this type of crude oil is that it can only be harnessed through creativity and effort.  It lies in your ability to fine-tune whatever you are doing to suite what your existing customers or market currently  need. It is tied to your willingness to learn new skills that will enable you solve existing problems better and even new ones as they emerge.  It is wrapped in your ability to see opportunies in problems both online and offline and then taking action.  It is first of all about acknowledging the new change, then lo