As a business owner, you need to borrow at a certain point in your business to increase your cash flow, make necessary purchases, or finance the expansion of your business to new horizons and marketplaces.
A business loan is a method of debt financing for a business that involves borrowing money from a lender to be paid back over time with interest.
Every business needs to grow and an infusion of cash helps its related expenses. However, certain essential factors should be considered before applying for a loan. Applying for a business loan is not necessarily a complex process, but better preparation ensures your chance of success. Following some steps and opting for a lender such as KwikPay Credit, with a focus on SMEs, can simplify the process of funding your business.
Considering these steps carefully can maximize the benefit and profitability you derive from your business loan;
1. Motive of getting a business loan
It is essential to know about your needs and eventual utilization of the loan. Business loans are used for numerous purposes, it could be the purchase of inventory, equipment, suppliers, or furniture, or even for working capital. The rationale behind your loan will decide the nature of loans available and the lenders that are ready to support you.
2. The business aims.
Your aim is a very important factor in applying for a business loan. Businesses are started all the time in the world with each one having unique objectives when starting for the first time. Having a clear vision in a business will decide whether your objective is to spread out to new markets or offer a better product/service to the niche market.
3. The business plan.
When seeking a business loan, it is important to prepare a business plan. This document will outline your business’s financial needs, and goals, as well as your repayment plan. A well-prepared business plan will give you the best chance of securing a loan and getting the funds you need.
4. The amount of fund that needs to be borrowed.
Money is the lifeline of any business before applying for a business loan, you must zero down on the amount of the money you need as a loan. To do this, you have to work out the capital you need, to support the activities necessary to meet your business goals.
5. The duration of the loan.
This means the period commencing from the drawdown for the loan and the date on which the loan is repaid in full. It is advisable to prepare a business plan to project the period for which you will require supplementary financial support.
6. Understanding the lending option.
It is very important to mull over the lending options accessible to Nigerian SMEs and figure out the best option for your business. Not all business loans are the same, knowing the kind of loan that is most appropriate for your situation will help before you engage lenders like KwikPay Credit and get the best deal.
7. Assess your creditworthiness
This is a report of a person’s credit activities across all sectors of the economy. It shows the history of loans the person has taken, be it cash loans, auto loans, or other forms of post-paid services. Your credit score, both personal and business, plays a significant role, lenders assess your history of managing debt to determine your risk profile. Building a positive credit history is essential for favorable business loan terms.
Basic requirement for getting a business loan at KwikPay Credit.
• Time in business (Must be More than a year).
• Bank statement (Personal and Business account).
• Valid means of identification (Int’l. passport, Driver’s license, National ID).
• Certificate of Business registration.
• Personal and Business credit score (This is to check your credit report to understand your financial behavior).
• Suitable Guarantor(s).
Conclusion
The best way to get better at your odds of bagging a business loan is to invest time in your groundwork before applying. If you need help with your credit or cash flow, take the necessary steps to develop these areas before approaching any loan app.
Once you are confident about your position, choose a loan company like Trafalgar Associates Ltd owner KwikPay Credit service which stands out among lenders offering competitive interest rates, flexible repayment options, and distinctive customer service.
With a commitment to responsible lending practices and compliance with regulatory standards, applying for your business loan can be a better option for your business.
We request minimal documentation and ensure fast disbursement of funds if the requirements are met.
Learn more about the benefits of choosing KwikPay Credit for your business loan.
As a trusted lender with over a decade of operation in Nigeria, Trafalgar Associates Limited (the owner of KwikPay Credit) will give you the best interest rate for your business loan. Just apply, and we will do the rest.
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