Union Bank (UBN) — how to get an SME business loan or financing

Whatever your business needs are — Union Bank can help.

Union Bank of Nigeria was formed over 100 years ago — in 1917. UBN is both one of the oldest banks in the country, and among the most respected.

Union Bank has its headquarters in Lagos. It conducts operations through a network of over 284 service centers — spread throughout Nigeria.

Union Bank offers numerous banking services — to individuals, small businesses and corporate organizations.

Funding and types of business loans available through Union Bank

Cash Flow Lending

With a cash flow loan, your business is better able to manage any short-term working capital requirements. No collateral is needed, and you can borrow a maximum of N10 million — for up to 12 months.

School Finance

Private schools including nurseries, primary and secondary schools — can get access to the funds needed to manage their immediate expenses. Union Bank can lend you a maximum of N5 million — with no collateral required. A loan tenor of 3 months applies.

Local Purchase Order

If your business has a confirmed purchase order (contract), Union Bank can help finance it. You can access up to N50 million — with funds being advanced for a maximum of 90 days. A contract equity contribution of 30% is required.

Invoice Discounting Finance

Union Bank can finance your unpaid receivables — through this invoice finance facility. A maximum loan tenor of 3 months applies — with any borrowing capped at N50 million.

Distributor Finance

Small and medium-sized enterprises (SMEs) can benefit from this distributor finance product. It is a short-term loan — with a maximum tenor of 180 days. To be eligible, you must be a distributor of a nationally recognized company. Union Bank can lend a maximum of N5 million through this facility.

Asset Finance

Asset financing is a great way of acquiring a variety of assets including — operational vehicles, office equipment, machinery and more. Funds can be advanced for a maximum of 2 years, and the amount that can be borrowed is in line with your business cash flow.

Term Loan

Term loans can be a form of long-term financing. This is perfect for businesses that seek to expand or grow. Collateral is required, and the amount that Union Bank can lend — depends on your business’s turnover.

Overdraft

With a business overdraft — you are able to better manage any fluctuations in your cash flow, and pay for unexpected expenses. A maximum tenor of 12 months applies.

Short Term Finance

With this finance option, SMEs get the funds needed to purchase inventory or stock — from specific suppliers.

Intervention Funds

Union Bank, in partnership with organizations like the Development Bank of Nigeria, offers a number of government-sponsored intervention funds. These funds can be used to finance working capital needs, asset acquisition and business growth.

Agribusiness Solutions

UBN bank has several financing products — suitable for businesses involved in agriculture. Some of these schemes are government-backed — through the Central Bank of Nigeria (CBN).

Trade Solutions

Union Bank has a range of trade financing solutions — to help your business trade internationally. Products offered include bank guarantees, bills for collection, letters of credit and structured finance.

Qualifying for a Union Bank business loan

Union Bank offers a wide range of business loan products and other financing solutions. Each finance product will have its own individual lending criteria. Further, some products are only reserved for businesses in certain industries. For example, some government-backed intervention funds are only available to agribusinesses.

Union Bank, like with most banks in Nigeria, usually only lend to businesses that can show proof of regular monthly income. Where an unsecured loan is required — credit history also becomes very important.

Other lending requirements may also 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

For unregistered companies, Union Bank cannot provide business financing (though there may be exceptions to this rule). Should you have an unregistered business, you may be able to get a personal loan — which you can utilize for business purposes.

Applying for a loan with SukFin — is also a good alternative.

How to apply for a Union Bank business loan

You can make a business loan application, at an appropriate Union Bank branch. You can also apply by using the “Request for an Agent” service — offered online. Additionally, loans can be requested through your mobile phone — with the help of a USSD code.

No matter which way you apply — all loan applications will be assessed against Union Bank lending guidelines. Your company’s suitability for the loan, and the loan purpose will all be evaluated.

An approval letter is issued — following a successful loan application. This letter will contain several terms and conditions, that you must meet — before funds are disbursed.

A checklist of important documents, often 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. The credit facility sought — influences the specific documentation required.

Frequently asked questions (FAQs)

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

Smaller funding requests, and loans without collateral — tend to come with quicker loan disbursement. The credit facility applied for, also affects the time it takes to receive any approved funds.

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

Union Bank offers a range of short and long-term credit facilities. Secured loans and government-backed funds, tend to come with longer repayment periods.

How much can I borrow from Union Bank?

Union Bank can fund small, medium and large organizations. The amount of money Union Bank will lend to you, is related to your business’s income. Bigger businesses tend to have greater cash flow, and will thus be entitled to borrow more money.

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

Union Bank interest rates differ. Single digit interest rates are offered, typically as part of a government-backed scheme. Funds directly from Union Bank’s ledger — may be more costly.

Does Union Bank require collateral?

Union Bank offers both secured and unsecured loans. As a result, collateral is not always required. However, the amount of money you are able to borrow without collateral — is limited.

Acceptable forms of security or collateral 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)

SukFin — Every type of finance for every kind of business

We help SMEs in Nigeria find finance — as fast as possible