Bank of Industry Loans – Meaning and how to get it

This article provides information about how you can apply for Bank of Industry Loans in Nigeria, as well as what it requires to do so. 

What is a Bank of Industry Loan?

The Bank of Industry is tasked with providing financial assistance for small to medium scale businesses in Nigeria through the use of loans. Therefore a BOI Loan is precisely for this purpose. 

Who is eligible for a Bank of Industry Loan?

Anyone with legitimate business can apply for a Bank of Industry Loan. However, more priority is given to businesses engaged in manufacturing and processing. The loan is targeted at sectors such as processing of agricultural materials, information technology, oil and gas, the creative industry and mining of solid minerals. It is important to note that BOI loans are only disbursed to business entities and not individuals. 

Also, BOI loans are only meant for the purchase of industrial equipment. They can not be used to buy assets like land or building. 

How much is available to collect?

BOI loans start from an amount of N5 million. However, the Bank of Industry can provide smaller loans in Nigeria through its matching funds platform, which it operates through Microfinance banks. 

how much interest is charged on BOI loans

The Interest rates for BOI Term Loans is at a maximum of 10% per annum, while that of loans for working capital is at 12-15% per annum. 

Do BOI loans require collateral?

The Bank of Industry needs businesses applying for loans to be held accountable, and so it mandates some assets of the businesses be pledged to secure the loan. Other security options such as bank guarantees, mortgage on landed property, debentures and external guarantors (in the case of loans worth less than N10 million. Third-party collateral is also suitable. 

What are the requirements for a Bank of Industry Loan?

Any business applying for a bank of Industry Loan must possess the following;

(For Micro-credit Loans)

•  Application Letter

• Certificate of Registration (photocopy)

• Copy of Cooperative’s constitution and Bye-laws

• Business Plan

• Business owner’s passport photographs (4 copies)

• Current Tax Clearance Certificate

• Copy of means of Identification

• Business’ bank Statement for one year

• Record of sales for six months and operating expenses.

• Evidence of Collateral

(For Small and Medium-scale Enterprise/Large scale Entrepreneur)

• Formal Letter of Application

• Copies of Certificate of Incorporation, Certified True Copy of Memorandum and Articles of Association.

• Photocopies of the Certified True Copy of Forms C02 and C07.

• Business Plan.

• Statutory Certificate of Occupancy or Deed of Assignment

• Photocopy of Title Documents  to the Collateral

• Approved Building Plan

• The estimate of Cost to be incurred on Factory Building.

• Valuation Reports on Factory Building(s) (for existing projects) and property offered as Collateral Security.

• Plant and machinery quotations

• The Audited Accounts of the business in the last three years

• Tax Clearance Certificate for the Company and two Directors for the previous three years.

• Passport photographs of each of the two Directors and the Company Secretary (4 copies) 

• Evidence of Appointment

How do you apply for a Bank of Industry Loan? 

You can apply for BOI Loans in two ways. For Physical application, business owners are to visit any of the BOI branch offices situated in 24 states in 6 geopolitical zones in the country or the headquarters in Lagos.

Applications for BOI loans can also be made online, through the Bank of Industry Website or through the application link www.boi.ng/apply. 

how long does it take for your application to get approved

Processing of BOI loans can take 30 to 40 working days to obtain approval. Afterwards, it takes 15 days for the credit to be disbursed.

Conclusion

If you’re looking for a means to expand and grow your business, the Bank of Industry provides the perfect loans suitable for such capital intensive financing.