How to borrow loan from bank in Nigeria and legal process you need to take
The question of how to borrow a business loan from a bank and the legal process you need to take has a lot of opinions and answers to it, but in the end, you will come to realise the fact that; financing a business and securing a loan from the bank requires careful planning and thorough analysis of your options and a lengthy process of legal work, document collection plus lender review.
Loans provided by banks for business required some agreed portion of interest when you are to pay back at regular intervals.
Unless and until you call the attention of an attorney, you wouldn’t know the legal amount of interest required to be charged on a specific loan as entrenched by the law regulating smooth conduct and affairs of borrowing and lending money in the society.
The repayment of the business loan secured will amount to a long-term loan; as such, it wouldn’t be easy for you to repay because of the heavy interest that might have been imposed without your knowledge.
How to borrow loan from bank in Nigeria
To borrow a loan from a bank for your business, follow the following processes:
1.Find the Lender
As an entrepreneur looking for ways to borrow a loan for business from a bank, the first thing to do is to identify which of the bank you are going to secure the loan from.
You can’t just sit down in your office and expect banks to troop into your company and start begging you to secure a loan.
Never, you will need to go out and search for the bank that is readily available to grant your request.
Whether you need the business loan to finance a new business startup or working capital for an already existing business, the options abound.
Just make sure you know where to look, how to look, and understand the kind of loan at hand the banks are lending at the moment; remember that it’s a business loan you want to borrow.
To ensure you find the right lender.
2.Building the Foundation
Banks would want to see the history of your successful borrowing whenever they are to give a loan.
In the same vein, some businesses do not have anything like a history of borrowing, specifically new businesses. If that is the case for you, lenders will look at your credit scores instead of the history of borrowing.
If you have got good credit, that is a perfect sign that you will maintain and handle the business loans well.
But if the reverse is the case, lenders would fear and feel skittish about lending you the business loan.
From time immemorial, collateral has been used and provided as the security for any form of loan in case of default.
If you have different and enticing collateral, your application to secure a business loan is more likely to be granted by the bank.
Do you have any worthy equipment, vehicles, real estate, or other assets that could be used to stand as collateral for the business loan? If yes, then your problem is half solved.
4.Write an Application
It is apparent from the previous that you can’t go to the bank and seek a business loan verbatim or orally; you need to file out an application for that.
While applying for the business loan, you will need to submit your business’s financial statements and other documents.
Here are; therefore, the primary documents you will need to submit:
Business financial statements
Business legal documents
Business owners’ resumes.
Information on long-term debt etc.
5.Wait for Reply
After you must have filed and submitted your loan application, you must exercise patience for the bank to go through your form and see if they should give you the loan you are asking for.
If they need you, you will be contacted
THE LEGAL PROCESS YOU NEED TO TAKE
The legal process you need to take while borrowing money from a bank for your business is many, but they will be highlighted in the compendium as a legal agreement.
The Legal Agreement
Since you have been encouraged to make do with an attorney in this matter, then it’s the function and duty of the legal practitioner to ensure that a mutual agreement on the business loan is reached and sealed between the two parties.
Like any business contract, loan agreements reflect an offer, and its acceptance can only involve legal situations.
The following legal process, therefore, needs to be reached between the borrower and the lender;
One of the tangible legal processes you need to put into consideration is the repayment provision.
Ensure that you reached a compromise with the bank on how you will repay the loan; on a weekly or monthly basis, it is subject to the convenience of the two parties. Let your lawyer legally document this.
Interest and Interest Periods
This is another legal process you need to embark on in borrowing a business loan from the bank.
The bank will determine under which condition of a period should include your interest lasts or rise.
Without putting all these into legal action, you are bound to have issues.
In case you have collateral available to pledge your security for the loan.
The use of the collateral as the representations for the loan needs to be taken into consideration; this is what your lawyer would sort out with the lender.
However, other legal processes you must take are; Parties to contracts, the formulae for calculations, amendments and waivers of the provisions, the set-off clause, and few others.