United Bank for Africa (UBA) — how to get an SME business loan or financing

UBA offers businesses a mix of different funding options.

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United Bank for Africa (UBA) is one of Africa’s leading financial services institutions — with operations in over 20 countries across the continent.

UBA has over 70 years of experience in the banking industry. Today it provides a range of different services — cut across commercial banking, corporate banking, SME banking and retail banking.

Together with Access Bank, First Bank, Guaranty Trust Bank and Zenith Bank — UBA forms part of Nigeria’s tier-1 banks.

UBA has a variety of different business loan and finance products on offer — suitable for both large corporates and smaller companies.

Funding and types of business loans available through United Bank for Africa

Young Entrepreneur Finance Scheme

With this scheme, UBA offers credit facilities to young African entrepreneurs. In order to apply, you need a strong and bankable business idea. Should you have this, UBA, along with other partner financial institutions, may be able to give you the capital needed to grow and scale your business.

UBA Medical Loan

UBA’s medical loan facility, is designed to support businesses active in the healthcare sector. Funding can be provided in the form of a term loan, or by the way of asset financing. Examples of eligible businesses include dental clinics, diagnostic centers, hospitals, medical laboratories, opticians and pharmacies. Up to N50 million can be advanced, for up to 3 years.

Temporary Overdraft

With a temporary overdraft, businesses have access to extra cash — that can be used for emergency expenses. This is a short-term credit facility — where you can borrow funds for up to 30 days. Interest is charged on any monies borrowed.

Invoice Discounting Facility (IDF)

If your business often has unpaid invoices — you may be interested in UBA’s invoice discounting facility. Here, you can get a cash advance — as long as you have a verifiable invoice. Any money released, will be discounted i.e. you get a percentage of the total invoices value.

UBA School Loans

The UBA School Loans facility, is aimed at meeting the funding requirements of private schools. Financing can be used for a variety of purposes including working capital, asset acquisition and buying/developing property.

UBA Creative Industry Finance

This creative industry scheme, is backed by the Central Bank of Nigeria (CBN). With it, you can get a loan of up to N500 million, at an interest rate of 9% per annum. You will have up to 10 years to repay any monies borrowed. Businesses with activities in things like fashion, ICT, movies and music are eligible.

AGSMEIS

AGSMEIS stands for Agri-Business Small and Medium Enterprise Investment Scheme. It is an initiative designed by the CBN to support agricultural businesses — as well as other micro, small and medium-sized enterprises (MSMES). Up to N10 million can be borrowed, for 7 years, at an interest rate of 5% per annum.

Development Bank of Nigeria

Through participating banks like UBA, the Development Bank of Nigeria (DBN), advances credit to MSMEs — to be used to grow and develop their businesses. Depending on the nature of your business, you may have up to 10 years to repay the loan. Interest rates are flexible.

Trade Finance

UBA links Nigerian importers, exporters and trading companies — to international markets — with the help of its trade finance solutions. Products on offer include letters of credit and LC discounting finance.

Qualifying for a United Bank for Africa business loan

UBA Bank has many different funding options — from term loans, to receivables finance, to business overdrafts. Further, there are a number of schemes or initiatives that focus on certain sub-sectors of the economy e.g. agriculture. Accordingly, your business may not necessarily be eligible to apply for every finance product on offer.

In addition, each of these facilities will have their own terms and conditions to meet. That being said, there are certain requirements you’ll need to meet — no matter the finance product that you apply for.

In general terms, in order to qualify for financing, your business must show proof of regular monthly income. Having a profitable business and a good credit history is also important.

Other 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

Although you need a registered business, to apply for a UBA business loan, there are other options — for unregistered businesses.

UBA bank also offers personal loan products and salary advances, that may be used (in certain circumstances) for business purposes.

A further option, is to apply for finance with SukFin — who can provide you with a range of other funding options.

How to apply for a United Bank for Africa business loan

There are a few different methods for applying for a UBA business loan. Applications can be made via email, phone or in person (at a suitable UBA bank branch). Some loan products also accommodate online applications.

Irrespective of the channel of application, loan requests will be evaluated against UBA lending guidelines. Your business, as a whole, will be assessed and the purpose of the loan taken into account — before the bank reaches any lending decision.

Funding approval will result in funds being released — subject to you meeting the terms set out in the relevant approval letter.

A checklist of what may be required — as part of any application process 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. More (or less) documentation may be asked for — depending on the credit facility you apply for and the size of your business. For instance, larger corporate organizations may need to produce a tax clearance receipt.

Frequently asked questions (FAQs)

How long will it take before receiving funds from United Bank for Africa?

Different loan products have different application processes. To speed up the process, it’s important that you provide as much information as possible — at the application stage. Promptly providing all needed documentation — will also help speed things up.

How long do I have to pay back a United Bank for Africa loan?

Repayment periods are related to the credit facility in question. UBA has both short and long-term loan and funding options.

How much can I borrow from United Bank for Africa?

As a general rule, the more money your business already generates — the more money you can borrow from UBA. Having a good credit history — will also encourage the bank to lend more money to you.

What is the interest rate charged on a United Bank for Africa loan?

Interest rates vary. UBA can disburse loans directly from its own ledger, and it also provides funding on behalf of government related organizations — such as the CBN and DBN. The interest rates attached to government-sponsored schemes, are usually lower — sometimes as low as 5%.

Does United Bank for Africa require collateral?

UBA requires collateral on some of its loan products, this is particularly true — where large amounts of money are in question. For relatively small amounts of money — unsecured loans are possible.

When collateral or security is required, acceptable forms of such can 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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