Top 10 Loans for Startup Businesses in Nigeria

Starting a business is an exhilarating journey filled with dreams of innovation and success. However, turning those entrepreneurial aspirations into reality often requires financial backing, and that's where loans for startup businesses in Nigeria come into play.

Nigeria, with its vibrant and rapidly growing economy, has seen a surge in entrepreneurial activity, and aspiring business owners are constantly seeking the right financial support to kickstart their ventures. In this guide, unveil the top 10 loans that can turn your entrepreneurial dreams into thriving businesses. Whether you're venturing into tech, agriculture, retail, or any other industry, these financing options can provide the boost your startup needs to flourish in Nigeria's competitive marketplace. Let's dive into the world of startup loans and discover the keys to unlocking your business's full potential.

Loans for Startup Businesses in Nigeria

Securing funding for startup businesses in Nigeria can be challenging, but there are several options available to entrepreneurs looking for capital to launch their ventures.

Here are ten sources of loans for startup businesses in Nigeria:

1. Money in Minutes – Business Loan

Money In Minutes Business Loan has a goal of making quick and affordable finance accessible to viable small businesses in Nigeria and across Africa. Offered at a minimum amount of ₦100,000 at a 15% monthly interest rate, the loan requires collateral in the form of moveable assets.

Requirements

1. Latest audited financial statement for the business.
2. Certified True Copy of CAC document and MEMART.
3. Bank statement for the CEO for the last 6 months.
4. The CEO or Directors BVN and NIN.
5. Bank statement for the business for the last 6 months.
6. The details and documents of the security/collateral.

2. Lendigo Business Loan

Lendigo Business Loan is offered to SMEs registered in Nigeria as LLP, PLC or Ltd.

Eligible companies have to be incorporated for at least two years and should be able to show a minimum turnover of ₦500,000 monthly. The loan is available to businesses that provide retail and professional services as well as traders of general merchandise such as electronics, computing, phones, fashion, and household goods among others.

Loan amount starts at ₦100,000 to ₦20,000,000 at a 7% monthly interest rate.

Requirements

1. Must be in business for at least 12 months.
2. 12 months bank statement that shows a minimum of ₦250,000 revenue monthly, with a clean credit report.
3. Bank Verification Number (BVN).

3. Letshego SME Loan

The Letshego SME Loan is a versatile financing option designed to cater to a wide range of businesses, whether registered entities or those operating informally. It's a practical solution for entrepreneurs, traders, manufacturers, transporters, service providers, and businesses across various industries. With Letshego's flexible approach, this loan empowers businesses of all types to access the capital they need for growth and sustainability, regardless of their registration status.

The Letshego SME Loan starts at ₦20,000 and could rise to ₦20,000,000. The loan attracts a 5% monthly interest rate.

1. Requirements
2. Valid means of identification (Int'l passport, Driver’s license, National ID, Voter’s card).
3. Means of ID (Driver's License, int’l passport, voters' card, National ID)- Obligor and Guarantor.
4. Business turnover cash flow/turnover documentation.
5. Spouse ID card (if married).
6. Bank Verification Number (BVN).
7. Collateral (Inventory, household properties (e.g., fridge, television, sofa etc.), cars, buildings, lands etc.).

4. BOI Working Capital Loan

BOI Microfinance Bank Nigeria is a subsidiary of the Bank of Industry Nigeria.

The BOI Working Capital Loan is a lifeline for businesses in Nigeria seeking to bolster their day-to-day operations. It provides readily available funds to cover operational expenses, purchase inventory, manage cash flow, and seize growth opportunities.

With flexible terms and competitive interest rates, BOI's Working Capital Loan offers businesses the financial stability they need to thrive in a dynamic marketplace. Whether you're a small enterprise or a larger corporation, this loan can be tailored to meet your specific working capital requirements, ensuring your business remains poised for success in Nigeria's ever-evolving economy.

Requirements

1. Statement of account for a minimum of 6 months and pay slips covering an equivalent period for salary-earning borrowers.
2. Must be in business for at least 12 months.
3. Flexible collateral requirements.
4. Two (2) recent passport photographs.
5. 2 recent passport photographs of guarantor(s).
6. Statement of account for a minimum of 6 months and pay slips covering an equivalent period for salary earning guarantors.
7. Valid ID – Driver’s ID, National ID or International passport.
8. Utility bill (within the preceding 3 months)
9. Signed post-dated cheques and valid means of identification for a guarantor(s).
10. Utility bill (within the preceding 3 months).
11. Signed post-dated cheques.
12. Bank Verification Number (BVN).

5. Fina SME Loan

Fina Trust Microfinance Bank offers SMEs short to medium-term financing for Working capital and asset purchase needs. Through the loan, finance is made available for a variety of legitimate contracts awarded by government agencies and reputable private organizations in the country. Borrowers can access loan amounts of up to ₦20,000,000 at 4% monthly.

Requirements

1. Account opening required.
2. Valid ID – Driver’s ID, National ID or International passport.
3. Current utility bill /Verification of Address.
4. One passport photograph.
5. Motor vehicles that are comprehensively insured.
6. Posted dated cheques for Obligor (Determined by loan amount).
7. Bank Verification Number (BVN).
8. Two (2) guarantors.
9. 2000-naira account opening fund.

6. Baobab MFB Crédit Sme+

With Baobab Microfinance Bank’s Crédit Sme+, startups in Nigeria can grow and expand their business. Boabab offers a range of easily accessible loans from N2 million up to 10 million at 4.6% monthly.

Requirements

1. Location must be within the bank’s lending area (Lagos state, Oyo state and Ogun state).
2. Existing Business.
3. Bank Verification Number (BVN).

7. LAPO SME Loan

The LAPO Microfinance Bank SME Loan is a credit product designed specifically to support Small and Medium Scale Enterprises (SMEs) operators in Nigeria. Through the loan, LAPO supports startup businesses in Nigeria with a credit facility of up to N5,000,000 to expand the enterprise.

At an affordable interest rate, Nigerian SMEs can now maximise their potential with the SME Loan for the expansion of their businesses.

Requirements

1. A duly completed application form.
2. Valid means of ID – a voter’s card, international passport or a driver's license.
3. Loan application letter.
4. Utility bill (within the preceding 3 months).
5. Bank Verification Number (BVN).
6. Two (2) guarantors.
7. 4 recent passport-size photographs.

8. Letshego Agricultural Loan

The Letshego Microfinance Bank Agricultural Loan is a specialized financing solution designed to empower farmers and agribusinesses in Nigeria. With Letsehgo, you can access the financial support needed to invest in modern farming equipment, expand your agricultural operations, and increase your yield. This loan product offers competitive interest rates, flexible repayment terms, and personalized financial advice to help you make the most of your agricultural endeavors.

Requirements

1. Spouse ID card (if married).
2. Valid means of identification (Int'l passport, Driver’s license, National ID, Voter’s card).
3. Collateral (Inventory, household properties (e.g., fridge, television, sofa etc.), cars, buildings, lands etc.).
4. Business turnover cash flow/turnover documentation.
5. Bank Verification Number (BVN).
6. Means of ID (Driver's License, int’l passport, voters' card, National ID)- Obligor and Guarantor.

9. Zitra Confam

A product of Zitra Investment, Zitra Confam gives businesses quick, easy and flexible access to business loans tailored to their business requirements. Businesses can access up to N5 million at 4% interest.

Requirements

1. Two Individual external guarantors with proper means of identification such as BVN, four (4) passport photographs, Identity Cards and a Letter of Intent to guarantee the loan.
2. Six months account statements- Obligor and Guarantor.
3. Means of ID (Driver's License, international passport, voter card, National ID)- Obligor and Guarantor.
4. Must have a clean credit report.
5. Photocopy of International Passport or Driver’s License or National Identity Card or Permanent Voter’s Card.
6. Bank Statement of the Business Enterprise for a period of one (1) year (for existing business).

10. BOI Asset Finance Loan

Another loan offering from BOI Microfinance Bank, the BOI Asset Finance Loan is a credit product that gives startups the opportunity to own that asset they need for expansion.

This could include items like machines, deep freezers, personal computers and notebooks, generators, washing machines, electronics and other electrical appliances.

Requirements

1. Must be in business for at least 12 months.
2. Confirmed guarantor with undated cheque.
3. Flexible collateral requirements.
4. Bank Verification Number (BVN).
5. Must Have a Land to build on or have a property you want to improve.
6. Valid ID – Driver’s ID, National ID or International passport.
7. Guarantor Submissions, Proof of residence, Proof of earnings & Post-Dated Cheques.
8. Statement of account for a minimum of 6 months and pay slips covering an equivalent period for salary-earning guarantors.
9. Two recent passport photographs of guarantor(s).

Getting Your Startup off the Ground in Nigeria

Starting a successful startup in Nigeria, like in any other country, requires careful planning, resilience, and a deep understanding of the local business environment.

Here are steps to help you get your startup off the ground.

● Business Planning

Create a detailed business plan that outlines your startup's goals, target market, revenue model, and growth strategy. Your plan should also include financial projections and a budget.

● Legal Structure and Registration

Register your business with the appropriate government agencies, such as the Corporate Affairs Commission (CAC).

Choose the right legal structure for your startup, whether it's a sole proprietorship, partnership, limited liability company (LLC), or another structure.

● Funding Your Startup

Determine how you'll fund your startup. Options include personal savings, loans, grants, angel investors, venture capitalists, or crowdfunding.

Explore the best financing options based on your business needs.

● Market Research and Target Audience

Conduct thorough market research to understand your target audience, competition, and market trends. Tailor your product or service to meet the specific needs of the Nigerian market.

● Product Development or Service Offering

Develop your product or service, ensuring that it aligns with local preferences and demands. Consider creating a minimum viable product (MVP) for testing and feedback.

● Team Building

Build a capable and passionate team that shares your vision. Look for individuals with skills and expertise relevant to your industry and business needs.

● Marketing and Branding

Develop a marketing strategy to create brand awareness and attract customers. Utilise digital marketing, social media, content marketing, and traditional advertising methods to reach your target audience.

● Customer Acquisition

Focus on acquiring your first customers. Consider offering promotions or incentives to early adopters to gain traction.

● Customer Relationship Management

Provide excellent customer service and build strong relationships with your customers. Word-of-mouth referrals can be invaluable in Nigeria's close-knit business community.

● Financial Management

Establish a robust financial management system. Keep track of expenses, revenues, and cash flow. Proper financial management is critical for business sustainability.

● Regulatory Compliance

Stay informed about and comply with local regulations, licenses, and tax requirements applicable to your industry and business type.

● Measuring Success

Set key performance indicators (KPIs) to track your startup's progress. Regularly review and adjust your strategies based on the results. With hard work and dedication, you can be one of the next successful Nigerian startups.

You can visit nairaCompare to read more about startups, and other business ideas in Nigeria.