Business Loans

The major problem faced by small to medium-sized enterprises (SMEs) is money for expansion. Most lack the finance to take that gigantic leap and cross over from being an SME to a large corporation.

Some save enough to achieve this, while others have to rely on investment from external individuals in the form of buying shares. The easiest way out, however, is to tap into available SME loans and grow your business, then pay back over a period.

How easy can I access an SME loan?

Do a quick search on google on the keyword “SME loan”, and it would amaze you at how many commercial and microfinance banks offer this service. In Nigeria, there is really no shortage of where you can get an SME loan to expand your business. What varies are the requirements of different financial institutions before giving you a loan.

Why SME Loan?

Small and medium enterprises are an important aspect of the growth of any economy. In the proper sense of things, SMEs employ most of the poor to average population. This is more than half the labor force of any country. From relationship, financing SMEs for expansion would directly impact the economy of a country.

In a country like Nigeria, there has been a very poor performance and help system for SMEs. This has affected the country’s economic growth and development. Addressing this problem could fix a vital cog in the economy, and spur rapid growth.

Factors affecting SMEs in the country

We can group the major problems affecting SMEs in Nigeria into 4 major categories. According to the FSS 2020 SME Sector Report, 2007, they are:

1. Unfriendly business environment.
2. Poor funding.
3. Poor managerial skills.
4. Lack of access to modern technology.

Of all these financial problems occupy the most grounds and arguably have a say in all. Money can help a business get out of unfriendly business environments, or hire the most qualified managers for the job. You can also purchase the best of technology for your business.

Where can I get an SME loan?

You do not have to look very far because most microfinance and commercial banks today offer such loans. However, microfinance SME loans are easier to access than many commercial banks. Some even require no collateral or paperwork, and you receive the loan in a matter of hours.

Examples of some financial institutions that provides SME loan services are:

1. UBA.
2. LAPO Microfinance bank.
3. Union Bank of Nigeria.
4. First Bank of Nigeria.
5. The central bank of Nigeria.
6. Zenith Bank Plc.
7. Zedvance.
8. Wema Bank Plc.

Conclusion

As an SME owner, take advantage of the opportunities provided through SME loans. You can finally expand your business and start raking in more profits. 

Play your cards right, and you can repay the loan within a short period, and carry on with your business. 

Keep in mind that it is not only about obtaining the loan, but how well you use it to the benefit of your business. 

There are many problems associated with establishing a company, and most of them stem from one source, which is finances.

Not everyone or groups has the unlimited deep pockets to whip out entire infrastructures and purchase licenses required to get going. As a result, many have turned to leasing until things fall in place.

Leasing has become very popular in Nigeria because of the high financial demands of industrialization and other manufacturing concerns. The leasing approach to investment reduces the strain on initial funding, therefore providing you with more flexibility. This article brings to you everything you need to know about leasing.  

What is a lease?

Definition

Leasing is a means that helps you as an individual or corporate organizations acquire fixed assets that you might not have been able to purchase due to the financial requirements of such assets. The contractual form of leasing is called a lease, and it outlines the terms and conditions on which one party rents a property from another party.

The contract obligations guarantee the lessee (tenant) the property to use, and the lessor (property owner) payments at agreed intervals, for a specific duration (months or years).

How does a lease work?

In a lease, the lessee acquires an asset from the lessor, for use, without purchasing it. You make regular payments instead, throughout the duration in which you use the asset. It is like rent and return after a specific time agreement.

Benefits/ Advantages of taking a lease

1. Tax benefit:

There are tax benefits for both parties involved in a lease agreement. The lessor (owner of the asset) can report depreciation as part of expenses in his financial book, therefore get the tax benefit. On the other hand, the lessee can claim the lease rentals to be an expense and also similarly get tax benefits.

2. A lease is essentially an off-balance sheet item. It allows you to take control of an asset while avoiding ownership and the risks of ownership in the process.

3. Steady cash flow: 

Perhaps the most significant advantage of leasing. It spreads payment of the lease across several years, therefore saving you the burden of a one-time high amount payment. This helps your business maintain steady cash flow.

4. Offers quality assets: 

With a lease, your business can afford quality assets that you might not have been able to afford in a full purchase.

5. Better usage of capital: 

A lease eliminates the financial commitments that would have been required to purchase an asset. This allows you to use your business capital to fund other necessary needs.

6. Low capital expenditure:

A lease offers significantly reduced cost on capital requirements for starting up your business.

7. Flexibility:

For most leases, there is usually a clause to terminate the contract or outrightly purchase it. This offers you much flexibility as a business owner to save for purchase before the end of your lease or walk away.

Disadvantages and risks associated with taking a lease

1. Lease expenses: 

the payments made during a lease are treated as expenses instead of equity payments for an asset.

2. Low financial benefits: 

Although paying a lease for a property, you cannot benefit from any appreciation in value. Also, the contractual obligations of a lease remain on your business regardless of whether the assets serve its usefulness or not. In a situation where it is no longer useful, the lease agreement becomes a burden.

3. Lower returns for shareholders: 

A lease reduces the net income of business without adding any value. This, in turn, results in smaller or limited returns for equity shareholders.

4. Debt:

The regular payment obligations of a lease are considered as long term debt, although it might not appear on the businesses’ balance sheet.

5. A lease might cause investors to shy away from your business since it is considered as long time debts. Loans may become harder to access.
6. No ownership:

The asset goes back to the lessor after the agreed duration.

7. Maintain the asset during the lease period, hence extra costs.

Conclusion

Leasing is an excellent way to get started for businesses that cannot raise enough capital. If used wisely, you can navigate setting up your business till it can run on its feet, but a poor use could cause otherwise. 

Make sure you carefully consider and analyze the importance of taking a lease before committing.

Loans are debt incurred by an individual through a corporation. The individual will agree to the terms of payments, including any interest charges and fees before they disburse the loan. 

As scary as debt may sound, sometimes it is necessary primarily if we use it to accrue interest with dividends.

For example, in the purchase of a house, get a loan. After paying for the entire house, it becomes an asset which you can sell and make to regain that loan plus some added interest for yourself.

As simple as that analogy is, it can become complex when you get market economics involved and all that, but the point of the analogy is that when loans are taken and used smartly, they are very beneficial. 

In this article, we will discuss some loans that Diamond (now Access bank) offers and how you may take advantage of them.

Listed below are Access Bank’s Loan packages:

• Creative sector loan
• Lending against turnover
• Personal loan
• Salary Advance
• Small Ticket personal loan
• W-Power Loan
• Advance for School fees
• Device Finance
• Maternal Health Service Support
• Payday Loan
• Vehicle Finance

Creative Sector Loan

This loan was initiated by the Central Bank of Nigeria to aid entrepreneurs in the following sectors:

• Fashion
• Information Technology
• Movie Production and Distribution
• Music
• Software Engineering Student

How can you access this loan?

• Prepare a business plan for your business
• Walk into any Access Bank branch to apply or apply at www.accessbankplc.com
• A relationship bank officer will contact you on the next steps
• Maximum yearly interest, including fees, is 9%
• The repayment period is a maximum of 3 years of the Software Engineering student loans and ten years for all other investments.

Lending Against Turnover

This is a loan that is dispersed to non-salary account holders who have had a relationship with the bank for over six months. 

How does this work?

• The application is conveniently made on the phone registered with your Access bank account. Just dial *901*11# and follow the prompts
• No documentation or collateral required
• 30-day repayment plan

Personal Loan

This is a salary-administred product that serves as a credit life insurance. This gives an employee access to 75% of their annual salary with terminal benefits and 50% of their yearly wage without terminal benefit.

How can you access this loan?

• Submit an application form
• A complete Employer Confirmation form
• Provide evidence of the confirmation 
• Copy of employment ID and a valid means of identification
• All these documents can be submitted at any Access Bank or www.accessbankplc.com

Salary Advance

This loan gives you access to up to 200% of your net monthly salary to be paid back in six months. 

How does this work?

• You can apply on the phone registered with your Access bank account. Just dial *901*11# and follow the prompts
• No documentation or collateral required
• 6-month repayment plan

Small Ticket personal loan

This loan gives you access to up to 400% of your net monthly salary to be paid back in twelve months. 

How does this work?

• You can apply on the phone registered with your Access bank account. Just dial *901*11# and follow the prompts
• No documentation or collateral required
• 12-month repayment plan

W-Power Loan

This loan is available to women-led businesses (at least 50% women ownership) with an operating tenure of a year. 

Qualifications for this loan: 

• At least 50% of female ownership
• At least a year in operation
• A minimum of 2 staff
• At least one credible guarantor plus post-dated checks. 

Advance for School fees

This product is designed to help parents/guardians with school fees of their children at any level of education. It can also be used by individuals to finance undergraduate, graduate and professional courses.

How does it work?

• Download application form on www.accessbankplc.com
• Send the form and all required documents to schoolfeesadvance@accessbankplc.com
• If the loan is approved, offer letter is sent with the execution. 
• The loan is dispersed into the school’s account. 

Device Finance

This product is designed to help purchase a new mobile device. It comes with a maximum of 12 month tenure.

How does it work?

• Download the Quickbooks apps on your app store (available on ios and android) and follow the prompts
• Click on the device console and make your selection.
• Accept the Terms and Conditions
• A transaction code will be sent to your email as well as instructions to pick up the device. 

Maternal Health Service Support

This product was designed to ease the financial burden on families during the birthing process of a child. In addition to labour, the following procedures are also covered under this loan: Hysterectomy, Myomectomy, Dental, Orthopedic, Bariatric (weight loss procedures)

Features of this loan are:

• No loan fees
• Highly subsidized interest rates
• Flexible repayment plans
• Access to over 30 fertility clinics and birth travel companies in Nigeria

Payday Loan

This is an instant loan product for salary and non-salary earners alike.

How does this work?

• The application is conveniently made on the phone registered with your Access bank account. Just dial *901*11# and follow the prompts
• No documentation or collateral required
• 31 days repayment plan

Vehicle Finance

This product was designed to aid in the purchase of vehicles. 

Features of this loan are:

• Open to salary earners, SME’s and corporations
• Equity contribution as low as 10% of the invoice value
• Up to 48 months tenure 
• Variety of vendors to choose from

Conclusion

Access Bank is a thought leader with the different products it offers. Key features are some conveniences it provides with some products such as USSD code applications. If you want more information about these loans, please visit www.acessbankplc.com or contact an agent here. 

Quite a number of people deal with the requisite involved in securing a loan in Nigeria. In most cases, regular banks do not reply nor accept loan applications while others have placed standards uneasy to reach. 

Microfinance banks dwell to ease financial demands. They as financial institutions provide easy services where individuals will meet up in comfort. Where there are other microfinance banks that offer great services, a number of them that ensure safe customer services and one of them is Fina Trust Microfinance Bank. 

About Fina Trust Microfinance Bank. 

Fina Trust Microfinance Bank stands tall amongst a number of well delivering micro finance banks and they provide services suitable for their customers. 

What products does Fina Microfinance Bank offer?

Fina Microfinance Bank offers a number of services to cater to various needs. They include: 

 Micro Loans

This service is suitable for SMEs, entrepreneurs, students as well as traders to access close to 1 million naira for already existing businesses. Fina Trust Microfinance Bank charges a minimum interest rate of 5% where the total summation is dependent on customer response. 

Salary Advance

This product is targeted at salary earners thst enables them to access close to 75% of their monthly salary in advance.  

Group loan

Very common in subjective parts of the world, Fina Microfinance Bank as well offers group loan which is available at a 3.5% interest rate. The Group loan product is presented in a credit rotation model.

This model is where a group of people become informal financial institutions through repeated contributions and withdrawals from several parties. This is due to limited service provided by formal authorities and restrictions of some sort.

The group loan seemingly reduces the risk to the lender which allows them charge lower interest rates than other loan types.

Here, the transaction is made through people themselves and it is also based on individual needs or lottery. This helps individuals who find it hard to get access to substantial capital by letting them have periodic access to needed funds where they have to pay within a period of time. 

Advantages of Fina Trust Microfinance Bank

• The Fina Microfinance Bank offer products thst are conveniently for customers. As an example, they have convenient repayment plan as well as equal monthly Principal and interest repayments.  
• Their conditions are flexible.
• This MFB make sure that it is possible for retail business to obtain funds for capital projects with installmental repayments. 

Disadvantages of Fina Trust Microfinance Bank 

• This Microfinance Bank in for loan requests demand the availability of a guarantor. 
• The maximum time allotted to products is six months. 

Requirements of Fina Microfinance Bank

The major requirements include;

• For group loan, group members must reside in the same location.  
• There must be group gurantor for group loan. 
• Potential customers must provide two credible gurantors. 

How to contact Fina Microfinance Bank

You can visit the head office at 46, Toyin Street, Ikeja, Lagos State, Nigeria. Or reach through +234-01-6326874/ +234-01-6326875 or +234-9062020040.  Furthermore, you can send a mail to inquiry@finatrustmfbank.com. 

Conclusion

It is safe to say that when the need arises to gain access to loan facilities, you should contact Fina Microfinance Bank for their suitable services. 

The arts and crafts make up an integral part of any community. They are what depicts the soul and the identity of any group of people. Recognising the importance of creatives is a crucial thing to do. 

However, being a member of the creative community can be tough because so many opportunities are not open to this sector. This applies most, especially in loans.

Getting a loan as a creative for your business is very difficult, considering most banks will only finance a loan with a prime chance of repayment, and creative loans do not rank highly. This could be depressing, but not to worry— there’s hope on the horizon. If you’re creative, and you’re looking for a loan, this post provides information on how to solve your money issues with loans from the Central Bank Of Nigeria. 

About CBN loans for Creatives

Recognising the need to cater financially for the creative industry, both the Central Bank and the Bankers’ Committee set up and implemented plans to facilitate this idea. 

This idea comes in the form of the Creative Industry Financing Initiative. CIFI is set up to help in the process of job creation by encouraging entrepreneurship in the creative industry with the loans. 

Who is eligible for the Creative Industry Financing Initiative?

The initiative covers four focal points in the creative industry. These focal points are Fashion, Movie/Film, Music and Information Technology. These categories mainly include the aspects of movie production and movie distribution, software engineering, fashion designing and music student loans. Anyone in these fields is automatically eligible to apply. 

How much is available for loans? 

The Creative Industry Financing Initiative realises how intensive the creative industry is, and that to make value, the loans need to be substantial. That is why businesses applying for loans in the CIFI are eligible for loans up to the amount of N500 million. 

How does the CIFI work? 

One primary requirement of the loan is to be a member of the creative industry, especially in the categories listed above. As there are different categories, so also does the amount eligible for each vary. The categorisation goes as follows; 

• Software Engineering students can get up to N3 million
• Movie Production businesses can get up to N30 million
• Businesses into Movie distribution are eligible for up to N500 million
• Fashion and Information Technology businesses can get loans to cover their rentals and other service fees
• Music businesses can get loans to cover the fees for training, equipment and rentals, and service fees.

How to apply for CIFI loans

• Prepare your business plan. This should state how much we need and what the business entails. The business must operate in the creative industry.
• After preparing the plan, head off to any Bank of your choice and apply for the loan.
• Your application will be analysed and reviewed and determine if your business is eligible. If it is, the loan is successful, and you get the funds requested for.

Does the loan charge interest?

The CIFI loans attract a maximum of 9 percent interest rate per annum. 

What are the repayment schedules for the CIFI? 

The various categories have unique payment schedules. They are as follows;

• Software Engineering Student Loans are to repaid under three years maximum.
• Movie Production and Distribution loans have a maximum of 10 years.
• The Fashion, Information Technology and Music based loans have a ten-year maximum repayment plan.

CONCLUSION

If you’re a creative looking for loans in Nigeria to finance your studies or business, then applying for the Creative Industry Financing Initiative is your best bet to getting that financial help.

Sometimes, emergencies arrive and individuals feel the need to take loans, to pay back as agreed. It could be weekly, monthly, or even once-in-three-months. It depends on the period that both parties agree upon. When these emergencies arrive, an employee will need to ask his or her employer for a financial upfront.

What is Salary Advance Loan? 

A salary advance is a loan usually given to an employee. As the name implies, it is usually a part of the wages of an employee paid at the end of the month. Naturally, only an individual with a salary job is eligible for this loan. 

This loan is usually short term, and it comes also with interest rates, though subsidized. Also, there are terms associated with repayment. You can make once at the end of every month, or once every three months. It is important to understand that employers rarely give salary advance except otherwise stated.

Banks are in charge of this. However, if an employer gives a salary advance to one employee, he must extend the opportunity to other employees. Discrimination based on performance, race, age, or gender is highly discouraged. 

What should you know before you take a salary advance loan?

Salary Advance policy educates you about the information you need to equip yourself with before you can take a loan in Nigeria. These include: 

1. Are you eligible for a loan?: Most times, the eligibility criteria are for individuals who earn a stipulated amount each month. This means that only individuals with a salary job are eligible for this loan.

2. What percentage of your salary do you need: A salary advance loan cannot give you a complete salary as a loan, except you apply for a particular percentage of your salary. It is important to know exactly what you need before you apply for the loan.

3. How much will I be paying in return?: It is always important to check this out because some interest rates can be outrageous. Always select a loan option with a favourable rate.

How to get a Salary Advance loan

Typically, most Nigerian banks such as First Bank and Access Bank give a loan of up to N500,000, although this amount depends on your salary and your past financial records.

To get a loan, all you have to do is contact your bank for more information on the process involved. After this, they will notify you about the loan periods and repayment plans. For instance, Zedvance loan periods count after a day (the day on which you get the loan). 

Where can I get one?

We can get salary advance loans from different financial institutions across all tiers. It could be a commercial bank, community bank or microfinance banks

Conclusion

A salary advance loan is perfect for you because they have designed it to handle emergencies. Also, there is usually no waiting period before the collection of the loan. As soon as an application is made, and they check the eligibility status of the client, the loan is made available almost immediately.

Before the recommendation of microfinance institutions in Nigeria, many businesses under small and medium ventures have been represented poorly in the financial sector. They are denied easy access to funds which has affected their business and means of livelihood.

In a bid to address the funding requirements of the SMEs, the Central Bank of Nigeria set up a microfinance development fund with a seed capital of N220 Billion. The fund will be administered by the Central Bank of Nigeria and managed by licensed microfinance institutions.

What is Microfinance Lending Institutions

A Microfinance Bank (MFB) is an institution duly licensed by the CBN to perform the business of providing microfinance and other financial-related services. Microfinance services refer to loans, deposits, fund transfers and any other financial products targeted at low-income clients – just like the other microlending services in Nigeria.

Where can I get microfinance funds in Nigeria?

There are over 1000 microfinance banks (MFBs) in Nigeria, which include unit MFBs, state MFBs and national MFBs. Collectively MFBs are much smaller than other banks, with a total lending portfolio of up to N53 billion. The Central Bank of Nigeria (CBN) requires all MFBs to lend at least 80% of their loan portfolio to micro-enterprises. 

How to get funding from microfinance banks 

They play vital roles in poverty eradication, agriculture, increase in small scale businesses, etc.  

We will concentrate on MFBs in Nigeria and how they grant loans. The following are steps to getting a loan from most microfinance banks in Nigeria:

1. Have A Genuine Plan or Project for the loan

Before approaching any MFB, make sure you have a plan and a business plan to support your idea. This increases your chance for a favourable response from the micro-lending institution. Bear in mind that these microfinance institutions were established for the sole purpose of strengthening the economy. Because of this, they only grant loans that fall in the category of SMEs

Most microfinance banks grant loans for business purposes, asset procurement, agriculture, educational purposes, loans for salary earners, etc. 

2. You might need proof

Showing the lenders proof of your business entity or plan can help you secure the funds you need from a microfinance bank. For example, if you are a trader, you might require proof of business ownership in the documentation of your business registration. You might also need bank statements or receipt of transactions showing that you have an operating business.

3. Open An Account With The Bank

After getting all the documentations right, the next thing is to open an account with the microfinance bank. When you apply for a loan in a microfinance bank, the first thing is to open an account with the bank. This is for data capturing as well as to show commitment to the bank.

4. Maintain The Account For some time

Some microfinance bank would require that you maintain an account with them for a period before you can be eligible for a loan. However, it is not common practice. It does not just end with opening an account with the bank, the account has to be active which involves paying and withdrawing money from the account constantly before you can be qualified to apply for a loan.

5. Get collateral to secure the loan

You may also need to present collateral when applying for a secured loan in a microfinance bank. However, it may not be applicable to small business loans for petty traders and individuals. Some microfinance banks do not need collateral. But, it will be necessary for business loans such as assets acquisition, agriculture and other loan application with a more substantial amount.

Conclusion

You need to be careful when opting for a microfinance bank. Some of these banks are not qualified financial service providers and often treat customers unprofessionally. Which makes one wonder if SMEs really need microfinance banks.

Be sure you understand the terms and condition as well as compare interest rates from other microfinance banks to get the best deals.

Non-performing loans (NPL) are loans in which the recipient is in default and has not remitted the monthly loan repayments for a specified period. Although the exact features of non-performing loans can vary depending on loan agreements, industry and type of credit granted. The terms “no payment” is usually defined as null payments of either principal or interest in a given period.

How Does A Non-Performing Loan Work?

When a loan is listed as non-performing, it is considered a default. The chances of recovering such loans from a debtor in full are extremely low. However, if the debtor resumes payments again, it becomes a reperforming loan, regardless of the status of the default payments.

In the banking sector, commercial loans in Nigeria are considered non-performing if the borrower has made no loan repayments within 90 days. On the other hand, for a consumer loan, 180 days without payments classifies it as a non-performing loan.

However, it is essential to note that there is a slight difference between a loan in arrears or default. A loan is in arrears when the principal or interest payments are delayed or completely missed. While a loan is in default when the debtor is unable to meet his obligations – the lender at this point considers the loan agreement to be broken by the debtor.

How Banks Handle Nonperforming Loans

Generally, non-performing loans are regarded as bad debts because the chances of loan repayments are quite minimal. As a result, having more non-performing loans in the Bank’s records affect it’s cash flows negatively. This could ultimately harm the Bank’s stock price. Therefore, they may have to take precise actions to enforce and ensure the recovery of the loans.

If it’s an asset-based loan, one action is taking possession of assets pledged as security for the loan. For instance, if the borrower uses his landed properties as collateral for the loan, the lender will take possession of the land. The Bank then puts the property up for sale to recover the amount owed by the borrower.

Banks may also redeem the right of the mortgage on homes where the borrower has failed to meet his mortgage obligations. This can only be done after the number of days due, as stated in the loan agreement has expired.

The lender also has the option to sell the non-performing loans to collection agencies to get rid of such loans from their balance sheet. The Bank will sell the non-performing loans at discounts, and the collection agencies will try to retrieve the defaulted loans. Alternatively, the Bank can also enlist the services of a collection agency to enforce the recovery of such credit. A small percentage is charged in exchange for their services.

Types of Nonperforming Loans

Debt can be regarded as “non-performing loan” in any of the circumstances stated below; 

• Loan repayment of principal and interest are at least 90 days due, and the lender now believes the borrowers will not honour their debt obligations. The loan is recorded as a bad debt in the books
• Ninety days’ worth of interest payments is refinanced, delayed or capitalized due to adjustments in the loan agreement.
• A loan in which the principal repayment date has matured, but some part of the loan remains outstanding.

Conclusion

The non-performing loans to Loans Ratio help ascertain the tension in a portfolio of varied loans. The higher the ratio, the more danger the lender is for having that portfolio.

The non-performing loan ratio is the ratio of the number of non-performing loans in a bank’s loan database to the total amount of outstanding loans the Bank holds.

There are several financing terms to be familiar with, and it’s possible to miss out on critical interpretations when we come across them in everyday use. Ones of such are Asset Based Loan/Lending (ABL). This form of lending is granted only to business entities and not consumers. It is often used by medium scale enterprises to cover short term cashflow demands.

What are Asset-Based Loans?

Asset-Based Loans are a type of business financing secured by company assets used as collateral. These loans may be secured by account receivables, inventory, or other property owned by a borrower. They are just loans based on the assets of the company, that are used as collateral.

This could also result in putting your future revenue on the line as a company to enjoy some money today.

How Asset-Based Loan Works

Many organizations often take out loans to meet scheduled cash flow obligations. For instance, a company might obtain a line of credit to make sure it can cover its monthly salary expenses even if there’s a slight delay in expected payments.

Upon seeking the loan, the business might be unable to show strong cash flow statements to cover a loan. The lender may propose to approve the loan with its assets as collateral. For example, a new bakery might be able to take a loan only by using its equipment to secure the loan.

The term and conditions of an asset-based loan usually depend on the type and value of assets offered as collateral. Lenders prefer highly liquid assets as collateral because that can be easily converted to cash if the borrower fails to meet its obligations. 

Who Uses Asset-Based Lending?

Asset-based loans are often used by organizations that need equity capital to operate or grow. Usually, organizations that request for this line of credit have cash flow problems. The asset-based lending facility enables the business to manage its cashflow problems effectively as well as positioning the company for growth.

Who Qualifies For Asset-Based Loans?

Generally, asset-based financing is given to small and mid-sized organizations that are solid and have enough assets that can be funded. The company’s assets must not be put up as collateral to another lender. In a case where they are pledged to a different lender, the other lender must agree to relieve some of the right on such collateral to the new lender. 

What Can Be Used As Collateral

The main collateral generally accepted for an asset-based loan is accounts receivable of the company. However, other loan security, such as inventory and equipment assets can also be used. These assets can later be used to recover non-performing loans in the event there’s a loan default.

Conclusion 

Before offering a loan, the lending institution needs to do a thorough due diligence process on the borrower. While the process of due diligence is on, the lender determines the value of your collateral. The lender also identifies any complications on the collateral and inspects the accounting records of the organization. Lenders carry out onsite visit and probe further by interviewing relevant employees.

The due diligence process is often subjected to a charge which varies from time to time and across different organizations. 

Mortgage loans are important these days. Like most people, we all dream of becoming a homeowner, but very few of us get to achieve this dream. If culture permits it, becoming a homeowner can be said to be a part of the “Nigerian Dream.” Learning a thing or two about how mortgage works will set us on the straight path to achieving this dream.
Mortgages provide the option of paying for a house in instalments. With the Nigerian landscape in view, it is essential to understand the process of getting a mortgage loan. We have explained the process involved in becoming a homeowner with a mortgage below;

How To Get Mortgage Loans In Nigeria

1. Save a deposit: Have in mind you’ll need to put down a deposit if you are looking to buy a home with a mortgage. The percentage deposit will vary depending on the property owners or the financing institutions.
   
2. Seek out house buying schemes: It will be of better advantage if you employ the services of house buying schemes like the NHF (National Housing Fund) or private house buying schemes popularly know as ‘developers’. They know the best deals and offers along with better financing solutions for home owning.
   
3. Plan for the long term: Mortgages require long-term commitments. You should make a budget with your mortgage payments in mind. Your mortgage payments should not be more than one-quarter of your income. Structure your monthly expenses from your income and see how much you can pay in for mortgages monthly. You can use the services of mortgage calculators.
   
4. Search for a home: After preparing your deposit and weighing several mortgage offers. It’s time to look for a home with mortgage payment plans. You might likely have this sorted after employing the inquiry the services of house buying schemes.
   
5. Obtain a mortgage loan: With a deposit in place and your budget structured. Now the formal talks can begin and signing off necessary documents for your new home. Obviously, after you must have done the essential research in the right places.

Who can apply for Mortgages in Nigeria? 

Anyone can apply for mortgages in Nigeria, provided you’re gainfully employed or earning an income. 

Here is what Mortgage loan companies in Nigeria are interested in: 

• Your monthly income and expenditure
• Your debt profile
• The value of the property you want
• Determine if the mortgage is something you can afford.

Why is it challenging to Get mortgages in Nigeria?

Life is all about risk, and as with money, the riskier it gets. Several factors make it challenging to apply for mortgages. 

Such as:

• Poor debt profile/profiling: With poor debt profiling, lenders are unable to predict and ascertain how well a loanee can keep up with payments each month. While a person with a poor debt profile will not qualify for a mortgage loan

• Insufficient deposit: not having sufficient deposit directly affects the mortgage you can apply for and the house you can buy.

• Lack of collateral for the loan you wish to apply for.

• Poor knowledge and understanding of how a mortgage works.

Conclusion  

You might want to consider how much to deposit to get a mortgage before going into it. However, there isn’t a particular limit to the amount of deposit; it all depends on the borrowers’ objectives. A smaller deposit means that you’ll have to seek a mortgage cover that covers a high percentage of the property’s worth. 

Few mortgages cover high percentage properties because of the risk involved. Also, they come with unattractive fees and interest rates. It is advisable to save as much money as possible in deposit to get the best mortgage offers.