Getting loan is a discouraging process for business owners today, as such; many promising businesses have closed shops as there are no access capital to finance their business. Oftentimes, business owners with solid business ideas and opportunities do not have chance of getting a loan from a bank. Even with the backing of a backing of collateral security, banks do not want to fund any loan that has unwarranted risk. Instead, they would prefer to focus on a pristine deal with a long track record (two plus years in business), strong personal credit rating, and solid financials (cash-flow positive).
However, one can not blame the banks. They are are highly regulated and have learned some painful lessons over the years hence businesses are left with their fate.
Enter the Alternative Lender Mode
Alternative Lender: A non-bank lending institution that will often lend to business owners that can not get (or choose not to get) a loan through a more traditional bank. An alternative lender are usually faster to fund. This is because alternative lenders are generally more aggressive than traditional lenders, they usually have processes and technology in place to fund more quickly. In many cases, the entire underwriting process is automated through online technology platforms.
They do not rely as much on your personal credit rating: Because banks are primarily focusing on the higher credit-worthy business owners, they have left a huge funding gap of lower-credit individuals and business owners that still need financing. What alternative lenders have figured out is that a credit rating is not the only indicator of repayment. Other key indicators of loan repayment include revenue, monthly cashflow, account receivables, business transactions (i.e. turnover), purchase orders and peer pressure.
They want to offer multiple loans: Though the term of the loan is usually shorter, an alternative lender will want to provide as many loans as possible to the business owner (subject to payment history of course). If the business owner shows a trend of regular on-time payments, the alternative lender will look to extend new loan options and will likely increase the amount of the new loan(s) which business owners do use for various expansion and marketing projects.
Alternative loan products are not for everyone. As a business owner, your goal is to get the best financing product for your situation. Do your homework to find the best rate and terms. But, if you have gone to your commercial bank and been rejected, there are likely other options that can help you build your business and fuel your dream. Below are some of the Alternative Lenders in Nigeria:
1. Bank of Industry (BOI) Limited
Bank of Industry House
23 Marina Street, Lagos Island, Lagos
2. Youth Business Initiative
252 Herbert Macaulay Road,
Alagomeji B/Stop,
Yaba, Lagos
3. Divine Success Plc
Kitchen Tower (beside Big Treat)
Omole Junction,
Ikeja, Lagos
Contact: 08025792482, 08038145326
4. Loans and Jobs Nig Ltd
21 Oladunjoye Street,
Ikotun, Last B/Stop,
Lagos
Contact: 08085093573
5. Microfinance Banks
6. Thrift and Co-operative Scheme etc.
Contact Pro Logic Ideas Consulting (+2348077202074 | contactus@prologicideas.com) for more details.
