Getting a business loan is a major obstacle confronting businesses, whether small or large. This may, however, be attributed to tight lending standard by the financial institution. Sometimes, any hurdle to this is the inability of the entrepreneur to put together the necessary requirement for a small business loan before embarking on the journey.
In this work, you will learn what to do in order to get your loan application approved. But before them, there are currently banks and other online lending platforms in Nigeria that gives out a financial loan to SMEs without collateral.
Notably, in applying for a business loan, banks have put in lots of measures in place to ensure that the borrower doesn’t abscond with the money. Thus, to gain access to a bank loan, you must position your business for the documentation task ahead. And here are the things you need to put in place.
Getting A Business Loan
Before you make an application for a business loan, you need to:
1. Have a workable business plan
Beyond making sales in your business, you need a working business plan to be able to convince banks that you need a loan for your business. A business plan is a living document of your business. Most entrepreneurs shy away from this, but besides seeking a loan, you need it for your business growth.
RECOMMENDED: How To Write A Winning Business Plan
It is necessary for you to really understand how your business works beyond the surface value of attracting customers. If you don’t have a business plan yet, then go and draft one for yourself. You can pay an expert to handle this while you concentrate on other aspects of the business.
2. Register Your Business
It is not surprising that many entrepreneurs in Nigeria start their business as a side-hustle, a hobby and as such having the business registered is not always a top priority, especially, if that doesn’t prevent them from transacting business.
Unfortunately, without prioritizing business registration, your business is only but a hubby without having a legal backing. And this can prevent it from entering into a contract with any financial institution. If you have any future plans to enhance your business growth by obtaining a business loan, then registering your business should be a top priority.
Many business owners try to avoid this process in a bid to evade tax payment. This shouldn’t be so. Your business sustainability should be a core thing. Besides, the benefits of registering your business far outweigh the payment of tax. Remember to first consider the various business legal structures in Nigeria before you proceed with the registration.
3. Open a corporate account
Open a corporate business account and use it. Business bank account serves as a means of financial identification and representation of your business. It further provides you a safe means of keeping and separating your personal finance from your business finance.
Once your business loan application has been approved, the money will be paid into your corporate account.
Another aspect of operating a corporate business account is that your tax deductions are calculated accurately. More importantly, a corporate business account makes you look professional rather than receiving money in your personal account, you begin to receive payments associated with you in the name of your business.
4. Organize your financial records
This is another important area you need to pay attention to. Most small businesses fail to keep track of their business transactions. Some claim that the business isn’t big enough for that and this has led many businesspersons to deep hands into their business finance for their personal needs. It is vital to keep record and regard your business as separate from you.
5. Join a business community
A sage once said, that if you are not networking, you are not working. This is pure truth. And the importance of a community of entrepreneurs cannot be written lightly on this. A thriving community of entrepreneurs is an essential catalyst for your business. A dedicated community will help you gain access to exclusive information that will skyrocket your business, build a network, acquire new customers and collaborate for growth. A community like the ESY Media profitability class provides Nigerian entrepreneur with a safe place to ask business-related questions, get answers to challenges confronting the Nigeria entrepreneurs and stay motivated throughout their entrepreneurial journey. You can join the community by clicking here. Remember, it’s free!
6. Be open to advisory services
The ESY Media profitability community is as interested in the continuous growth of your business just as you are. In fact, your success as a participant of the ESY Media Profitability class is a reflection of our success. When you join the community, we on bi-weekly base treat business-related topics.
In all, it is central that you keep an open mind to learn, unlearn and relearn. Engaging the services of subject matter experts on business-related issues is also important to ensure that all aspects of your business are rightly sorted.
7. Be social and information-driven
Active information rules the world, not just the world of business. So, as an entrepreneur, don’t wait for information to come knocking at your door. Contact your banker, your friends, and surf the internet for the best low-cost loan facilities available for businesses. A man who ask questions hardly makes mistakes. So don’t be afraid to ask valid questions and ensure you understand fully the terms and conditions for getting a loan from any financial institution or investor.
Also, with the help of the internet connecting the world together, you can align yourself with experts in your industry through social media and stay up-to-date with financial opportunities available, financial training and tips for your business growth.
8. Be clear on what you require
You have to straightforward about the amount you require to grow your business. And this you can only do if you have an understanding of your business and the industry. You will be better positioned to know how much your business need and the best structure of the loan repayment that will work best for you.
Finally, in sourcing for a business loan, remember not to take more than you can afford or less than you need.