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

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SunTrust Bank is a privately held commercial bank — based in Nigeria.

The bank has its headquarters in Lagos and maintains other bank branches in Abuja, Akwa Ibom and Rivers. Services are provided through traditional brick and mortar channels, as well as digital channels — with its telephone, mobile and internet banking services.

SunTrust engages in consumer, SME and corporate lending.

Funding and types of business loans available through SunTrust Bank

Receivables Finance

Receivables finance is also known as invoice finance. This credit facility provides businesses with short-term working capital. Funds are released on the back of verifiable invoices. A maximum of N500 million can be advanced, and funds can be borrowed for up to 3 months. SunTrust is able to finance multiple invoices — all at the same time.

Investment Backed Loans

This SunTrust product enables customers to use cash deposits, federal government securities and other investments — as collateral for a loan. You can borrow funds for up to 12 months, and the applicable interest rates are negotiable.

Contract Financing

Contract financing provides you with the funds needed to fulfill contracts — be it government, NGO or private sector. Contracts can be for making supplies against confirmed purchase orders, or simply for executing construction works. SunTrust is able to fund up to 80% of the contract value. A 12 month tenor applies and interest rates are attractive.

Asset Financing

Asset financing provides a means for you to acquire assets. Assets are to be bought from any one of the bank’s pre-qualified vendors. Cars can be financed for up to 4 years, while for other assets the tenor is 2 years. Only brand-new assets can be financed — except where the asset is a vehicle, in which case models under 5 years can also be financed.

SunTrust Temporary Overdraft (TOD)

This SunTrust overdraft facility, allows SMEs to access the funds needed — to meet urgent working capital requirements. The maximum tenor of this facility is 30 days.

Letters of Credit

A letter of credit (LC) is also known as a documentary credit. This product serves as a payment mechanism, primarily used in international trade — to provide an economic guarantee. Once an exporter fulfills the conditions, in a letter of credit, payment is released. SunTrust can handle a LC both for export and import.

Documentary Collections / Bills for Collection

Documentary collections are a transaction where a bank collects payment from an importer (buyer) — on behalf of an exporter (seller). In return for payment, the bank collects documents — that effectively give the importer possession of goods bought. It serves as an alternative to a letter of credit.

Foreign Guarantees / SBLC

Bank guarantees and standby letters of credit (SBLC), serve as economic guarantees — in the event of a customer default. Both products act to minimize risks in international trade, and other complex contracts. The conditions for default will be stipulated in the guarantee or SBLC.

Islamic Finance / Non-interest Banking

SunTrust Bank offers a few Islamic Finance products. One of the products on offer is Lease-to-own-LTO (Ijarah-Muntahiya-Bi-Tamleek) — which is similar to conventional leasing. Another offering is Cost-plus Profit (Murabaha) Financing — which can be used as a form of asset, working capital, import and export finance.

Qualifying for a SunTrust Bank business loan

Qualifying for a SunTrust Bank business loan, means meeting certain lending criteria. Some of these criteria apply to all credit facilities that the bank offers — while others are only applicable to specific products.

One of the main lending requirements, is your business being located in a geographic area that the bank serves.

SunTrust will only be able to lend to companies, that can realistically pay back any borrowed money — shown through a business having regular positive cash flow.

Further, a good credit history is vital — as the bank will be unlikely to lend to businesses that have failed to meet prior debt obligations.

Further general business lending requirements 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

SunTrust Bank can only finance your company, if it is registered with the CAC. Unregistered businesses and private individuals, are ineligible for business funding.

If you are unable to get a loan under your company, you can consider getting a personal loan. You may be able to use a personal loan for business purposes. SunTrust does also offer consumer loans.

A further option is to apply for funding with SukFin — who can give you a range of alternative finance solutions.

How to apply for a SunTrust Bank business loan

SunTrust Bank is able to accept business loan applications in-branch. It is best to only make loan applications, where you are likely to get approval. So before you apply, have a look at some of the bank’s products — to see if you meet minimum funding requirements. You also have the option of contacting SunTrust via phone, email or through social media channels — to get added information.

Most loan applications will involve you filling in an application form — which will require you to give details of your company and the purpose of the loan. Your application will be evaluated against SunTrust Bank lending guidelines.

Should your application be approved — an offer letter will be issued. Any terms and conditions attached to the loan, will be stated in this offer letter. The procedure for loan disbursement, will also be outlined in this offer letter.

A checklist of important documentation, typically 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)

The credit facility of interest, determines the actual documents you will be asked to provide.

Frequently asked questions (FAQs)

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

SunTrust loan approval and disbursement times vary — according to the credit facility. Typically, smaller unsecured loan requests get approved the fastest.

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

SunTrust is able to tailor repayment plans to suit your business needs. You can be financed for anything from, a few months up to a few years.

How much can I borrow from SunTrust Bank?

The bigger your business and the more cash you generate — the more money SunTrust will be willing to lend to you.

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

SunTrust Bank has competitive interest rates. Actual applicable borrowing rates, are based on the credit facility as well as your trading history.

Does SunTrust Bank require collateral?

To borrow money from SunTrust, you usually do need collateral. However, there are times where collateral may not be necessary.

Acceptable collateral 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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