Most times citizen’s in Nigeria have good business plans but lacks the financial funds to set-up a profitable business. Therefore, banks are however considered as a financial organization that could loan them few amounts of money to set up their own business, but this could only be a thought as their loan demand may never be consider by any bank.
I have heard and come across some persons on most social business forums talked about banks not willing to give out loans to establish their said business. And you wonder why some individual also go to this same banks and yet they are given loans. Trust a typical black man could turn it emotional to say: “maybe they are related to the bank manager, or if maybe a lady, they could say something else.”
Many individual has lost interest to seek loans from banks just because they think the bank won’t loan money to them. But take time to carefully read why your request to get a loan has never been granted by few of the commercial banks or micro-finance banks that can lend you the amount of money you need. You must make sure that you check why it was not or never granted. Remember that the lender has his experience and he gets many proposals, so he understands better. If there is a particular thing that is wrong with your proposal, see if it can be corrected and then try to re-apply. Or use these knowledge when next you are applying.
1. If the past and present performance of such business is poor, or when compared to similar competing business, you will never be granted large amount of money.
2. Insufficient collateral. For example, you cannot present your NYSC Certificate as a collateral for 10million loan.
3. If the borrower is not financially committed in the business. Your personal capital in the business is critical to approved loan.
4. Lack of business plan. No banks will give out funds without knowing the significant of the loan.
5. If the purpose of the loan to be taken is not articulate . Lack of detailed explanation of the purpose of loan will always lead to refusal to lend. The purpose must be clear and specific e.g for buying a particular asset, to expand existing production line (raw material, plant).
6. If the borrower character, confidence, stability and personality are poorly rated by the lender. For example, if the borrower is having a divorce suit hanging on him or her. Has declared bankruptcy or have contacted a terminal disease like cancer, etc… you will never be granted a loan.
7. If the borrower has no articulated plans to raise back money to pay the said bank loan, the believe of getting a loan remain a fallacy.
8. Add yours?