First Bank — how to get an SME business loan or financing

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First Bank, also referred to as FirstBank, is one of the largest financial services institutions in not just Nigeria — but Africa as a whole. It has over 758 business locations — spread throughout 10 countries.

First Bank is headquartered in Lagos. Being established in 1894 — First Bank’s heritage stretches back over 120 years.

First Bank competes with four other “tier-1” Nigerian banks namely — Access Bank, Guaranty Trust Bank, United Bank for Africa and Zenith Bank.

The bank offers a full range of retail and corporate financial services — to include business loans.

Funding and types of business loans available through First Bank

Revenue Loans and Overdraft

First Bank’s overdraft facility gives you access to money — over and above what is actually in your account. Borrowing limits and loan tenors are all pre-defined. A great backup source of funds to have — for unexpected expenses.

Contract Finance

Contract financing enables businesses to execute large contracts — awarded by reputable organizations. Here, First Bank can finance 70% of a contracts value. Loans over N50 million will need collateral. Funds are advanced for a maximum of 9 months.

Secured Term Loans

With this secured loan facility, your business can get access to the cash needed — to execute capital projects, or simply to grow. A maximum of N40 million can be credited to you. Repayments can be made over 3 years.

Import Finance

Businesses involved in the importation of raw materials or finished goods, can consider import financing. Credit facilities are made available through a number of different finance products — including bills for collection and letters of credit.

Oil and Gas Contract Finance

With this credit facility, Nigerian oil and gas companies can get access to much needed funds. Money is released for the purposes of executing specific contracts. Up to 70% of the cost of execution can be borrowed.

Cement Distribution Finance

Distributors of cement products can benefit from this scheme. The loan tenor is flexible, as to is the collateral required.

Invoice Discounting Finance

With invoice discounting, cash can be advanced to you — based on unpaid invoices (from reputable organizations). Great for managing your working capital.

Bonds and Guarantees

This product is aimed at contractors to big companies, who often require bank guarantees — before contracts are awarded. The tenor of a bond or bank guarantee, does not exceed 12 months.

Telecoms and Distributorship Finance

This First Bank product, helps fund telecom distributors — seeking to enhance distribution and sales of merchandise goods.

Petroleum Dealership Finance

This finance product allows relevant businesses, to stock white petroleum products (PMS, AGO and DPK). Your business needs to be registered with IPMAN, and be an authorized dealer of a major oil marketing company.

Fast Moving Consumer Goods (FMCG) Key Distributorship Finance

Distributors of FMCG are the beneficiaries of this First Bank product. This credit facility gives you the chance to increase your volume of business.

Local Purchase Orders Finance (LPO)

LPO finance provides a means for businesses to get funds — based on the back of a confirmed purchase order. Up to 70% of the purchase order value can be advanced. A maximum tenor of 150 days applies.

Operational Vehicles

Using the operational vehicle finance product, you can acquire a new vehicle for day-to-day business use. The facility cannot be used for commercial transportation. N10 million is the maximum loan amount, with the corresponding loan tenor being 3 years.

FirstEdu Loan

This credit facility is aimed at private school owners, who may need extra cash to run their schools. Loan tenors range from 3 months up to 12 months. You can borrow a maximum of N20 million.

First Trader Solutions (FTS)

This Is a short-term overdraft facility. First Bank offers FTS to traders in pre-approved market locations. These traders typically deal with fast moving goods. Credit is provided for either 90 or 180 days. The maximum loan amount is N5 million.

Health Finance Product

Registered pharmacies and private hospitals, may be able to benefit from this health finance product. Here, First Bank provides a loan for the purchasing of drugs, and other medical supplies. You can borrow a maximum of N5 million for 6 months.

Commercial Mortgage

With a First Bank commercial mortgage, companies can acquire landed property — for commercial purposes.

Agricultural Financing

First Bank has a range of different finance products — for businesses involved in agriculture. Three of the products on offer, are backed by the Central Bank of Nigeria (CBN) namely — the Commercial Agriculture Credit Scheme (CACS), the Micro SME Development Fund and the Real Sector Support Facility. Conventional term loans and overdrafts, are also offered to agribusinesses.

Qualifying for a First Bank business loan

Being such a large financial services institution — First Bank has multiple loan products and business finance options. Accordingly, lending criteria highly depend on the credit facility you are interested in. In addition, some loan products are only appropriate for businesses in certain sectors of the economy. For instance, health loans are only available to medical related businesses.

As with all loan applications, demonstrating an ability to repay a loan (through showing regular monthly income) and having a good credit history are vital.

Other standard lending criteria may 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

Business loans are reserved for registered businesses only. Those with unregistered businesses, can look into personal loan products — which First Bank also offers.

For even more funding options, consider applying for finance with SukFin.

How to apply for a First Bank business loan

First Bank accepts loan applications at relevant branches. You may visit a branch and complete your application there. Alternatively, you can download the relevant application form online, completing it, before heading to a First Bank branch.

Before approving funds, First Bank will need to evaluate your business’s suitability for financing. The Bank will also take into account the loan purpose — before reaching a lending decision.

Any funding approval letter, will come with a set of terms and conditions for you to meet — before any money can be disbursed.

A checklist of important documents, often requested 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. The specific documentation you will need to show, are unique to the credit facility sought.

Frequently asked questions (FAQs)

How long will it take before receiving funds from First Bank?

The time it takes for funds to be disbursed differ. Each credit facility will have its own set of verification processes. Having said this, smaller loan amounts and unsecured loans — tend to get processed relatively quickly.

How long do I have to pay back a First Bank loan?

First Bank credit facilities are both short and long-term. Typically, loans that come without collateral — feature shorter repayment periods.

How much can I borrow from First Bank?

The size of your business and your profitability, are the two main factors that determine how much money — First Bank is willing to lend to you. First Bank has the resources to cater for both small and larger organizations.

What is the interest rate charged on a First Bank loan?

First Bank lends both from its own balance sheet, and acts as an agent of various government related organizations e.g. CBN. Commonly, direct First Bank loans are more expensive — than government-backed funds.

Does First Bank require collateral?

First Bank does not require collateral for some of its loan products. Nevertheless, if you want to borrow large sums of money — a secured loan will likely be the only appropriate solution.

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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