Ecobank — how to get an SME business loan or financing

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Ecobank Nigeria is a commercial bank — headquartered in Lagos. Since its beginnings, over 30 years ago, Ecobank has developed into one of Nigeria’s top banks — in terms of assets, customer base, deposits and branches.

Ecobank Nigeria is a subsidiary of the larger Ecobank Transnational Incorporated (ETI) — one of the largest independent banking groups in Africa.

The bank operates as a “universal bank”. Accordingly, it provides a comprehensive range of wholesale, retail, corporate, investment and transaction banking services.

Funding and types of business loans available through Ecobank

Business Overdraft

Through this Ecobank business overdraft facility, your company will have quick access to the cash needed — to manage short-term cash flow problems. For instance, when you need to make unexpected payments.

Business Revolving Credit Plan

This product works like a revolving line of credit — where you can borrow up to a pre-defined limit.

Debtor Finance

Debtor finance or, receivables finance, is a way for your business to borrow funds — using your accounts receivables or invoices, as collateral.

Distributor Finance Scheme

This is a short-term credit facility, that Ecobank provides, to be used for purchasing stock or supplies.

Vehicle and Asset Finance

Through this asset financing facility, Eco bank advances funds that can be used to acquire assets — such as vehicles or machinery.

Contract Financing

The Ecobank contract financing facility, is perfect for businesses that need funds to execute contracts. It is also useful for those who need money to fulfill a local purchase order (LPO). Up to 80% of the contract or LPO value can be borrowed.

Trade Finance

Numerous trade financing products are offered by Ecobank — in the form of both export and import financing. Products on offer include letters of credit, documentary collections and bank guarantees.

Supply Chain Finance

Ecobank’s supply chain finance facility — enables your company to lengthen payment terms to your suppliers, and at the same time, gives these suppliers the option to get paid earlier.

Corporate Banking

Ecobank has several finance solutions, tailored to its corporate and institutional clients. Both short and long-term financing solutions are on offer. Examples of the credit facilities offered include bridge finance, factoring, finance lease, acquisition finance, loan syndication and project finance.

Qualifying for an Ecobank business loan

Any company that engages in productive activities, may be eligible for a business loan from Ecobank.

However, in order to get funding, it is not enough to simply have a business. Your business must show evidence of being able to actually repay any borrowed money. If Ecobank sees your business as not being capable, of repaying a loan, it will not lend to you. Capability of repaying a loan is demonstrated when your business is profitable, and when it has a consistent monthly income.

Another important requirement is having a good credit history. In other words, have you been able to repay all your previous debt obligations? Answering yes to this question, means that you have a decent credit history — making you a potentially worthy borrower.

When you have little or no credit history, or your cash flow is not steady — Ecobank will likely only be able to offer you a secured loan i.e. a loan with collateral.

In addition, when you need to borrow large amounts of money, regardless of your credit history and cash flow, security or collateral will also typically be required.

General business lending criteria can (but not always) include:

  • Having a registered business or company — with the Corporate Affairs Commission (CAC)
  • Having a business or corporate bank account
  • Been trading for some time (1-3 years minimum)
  • Must have a good Credit Bureau Report — with no unpaid obligations or bad debt
  • Being an active customer of the bank

Ecobank business loans and other forms of business financing, are not suitable for individuals. Consequently, if your company is not registered — Ecobank cannot fund it directly.

If you are unable or unwilling to register your business, or if your business has little to no documented trading history, you may consider taking out a personal loan. This loan can then be used for business purposes.

Another option is to apply for funds with SukFin — who are able to provide other funding options.

How to apply for an Ecobank business loan

Once you have done your research, and found a suitable finance product — you can apply by visiting your nearest Ecobank branch. Before visiting a bank branch, you also have the option of phoning or emailing Ecobank — to ask for more information.

At a branch — a loan application will commonly involve speaking to an adviser, and filling in an application form. In this application form, you will provide details of your business, its trading history, its finances and you will also state the purpose of the loan.

Ecobank will make a lending decision, based on the details you provide and any other publicly available information.

Being approved for a loan, will result in you being issued an offer letter. Inside this offer letter, will be a set of terms and conditions that you are required to meet — before funds are disbursed.

A list of important documentation, usually asked for includes:

  • Completed application form
  • Company profile
  • Business plan
  • Cash flow budget
  • Bank statements (12 months)
  • Audited financial accounts
  • Certificate of Incorporation
  • Valid means of identification (driving license, passport, voters card)
  • Proof of address
  • Details of collateral offered (if any)

Note. Each loan product, will have its own set of requirements. Therefore, Ecobank may ask you for more or less than the above.

Frequently asked questions (FAQs)

How long will it take before receiving funds from Ecobank?

Different Ecobank finance products — come with different application processes, and as such the time it takes for funds to be disbursed vary. Ordinarily, smaller sums of money are approved much more quickly.

How long do I have to pay back an Ecobank loan?

Repayment periods differ. Ecobank can provide both short and long-term funds.

How much can I borrow from Ecobank?

Borrowing limits mainly depend on the size of your business. Larger companies can generate greater cash flows, and as such will generally have a higher borrowing limit.

What is the interest rate charged on an Ecobank loan?

Eco bank interest rates are based on the credit facility in question, and your business’s circumstances. As a general rule, the more established your company — the cheaper it is to borrow money.

Does Ecobank require collateral?

Ecobank provides loans both on a secured and unsecured basis. Unsecured loans normally have much lower borrowing limits.

Acceptable forms of collateral or security may include:

  • Obligations of the Federal Government of Nigeria (FGN Bonds, FGN Eurobonds, FGN Treasury Bills etc.)
  • Obligations of state governments or agencies of the Federal Government of Nigeria
  • Other non-government debt instruments
  • Physical assets e.g. real property
  • Third party guarantors (or collateral)

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