Micro, Small and Medium Enterprises are often denied loans by banks and other lending institutions. The cause of this is not farfetched. No one really wants to lend money to a startup.
You know, the success of a startup is a probable thing. These lending institutions believe that the failure of the startup could lead to the loss of their money.
But it would interest you to know that these MSMEs constitute over fifty per cent of registered businesses in Nigeria. It is high time that they are granted easy access to loans.
In this article, we’ll be sharing five effective tips that will help you get loans for your Micro, Small or Medium Enterprise, Startups without hassle.
But before you proceed to the tips below, kindly learn How To Avoid Fraudulent Loan Offers, Investment Schemes.
Keep Financial Records:
A lot of small businesses undermine the power of keeping financial records. Financial records increase the chances of getting loan approval.
What should a financial record contain? A good financial record should contain your expenditure, profit, maintenance, losses as well as other important business inputs.
Keeping a financial record also saves you the stress of going through a lot of question and answer process from loan officials. You would love that, wouldn’t you?
Bank Narrations Are Not For Fancy:
Always make sure to write a narration for every penny that enters or leaves your business account.
It’ll help you avoid unnecessary calculations because you won’t have to think too deeply about what you spent on and what you didn’t spend on.
Also, it’ll act as a pointer to the loan officials on how best they can help you.
Be Definite In Your Demand:
Asking for a loan doesn’t mean you should let indecisions overrule you. It is cringe-worthy to hear people tell loaning institutions to give them whatever they can.
No, you’re not some high school girl asking her daddy for money. You are a business person asking for a loan to run your business.
Be definite in your loan applications. Give no room for indecision. It never mixes well with lending.
Draft A Suitable Repayment Plan
Many people under the pressure of getting money for their businesses often end up agreeing to outrageous interest rates and repayment plans.
Don’t fall a victim to this. It could get you into a debt trap. Draft a repayment plan and present it to the loaning institution. This expresses your seriousness and discipline.
But remember, it is one thing to make a repayment plan and it is another to stick to it. Make sure you stick to yours by following these tips.
Your Surety's Reputation Gives You An Edge:
If you are asked to present a surety or guarantor in the course of your loan application, make sure to present a person of high repute.
Both socially and financially. Nothing drives a bank or lending institution to approve a loan faster than a good surety.
Final Note
Reading through these tips, did you notice that there are a lot of things you’ve been doing wrong in regards to your loan application?It’s time to correct them all. Employ these powerful tips and watch your loan application get approved sooner than you expect! However, beware of fraudulent loan offers as warned by CBN.