12+ Small Business Loans for Startups and How to Get Them

You are not the only one seeking business loans for startups. Launching a business in Nigeria is not an easy task. And we must say kudos for braving economic challenges to meet the needs of millions of Nigerians through your business.

Maybe you have launched already, or maybe you are yet to. Whichever stage your small business may be in, getting funds to buy necessary products and resources is usually a challenge. 

Most small business owners resort to loans to keep them afloat in the entrepreneurship sector. 

Perhaps you’re also thinking of taking a loan, and you’re wondering what loan options are available to small business owners. 

In this guide, we shall explore some small business loans for startups in Nigeria. We will also explore certain strategies you must put in place to increase your chance of securing one of these loans. 

What Are Small Business Loans for Startups?

Small business loans are a type of loan option designed to finance small businesses. 

Commercial banks or digital money lenders may grant these loans.

Small business loans may be granted pre-launch or post-launch, as long as the enterprise still qualifies as a small business.

Some types of small business loans are equipment financing, import loans, employee remuneration loans, business expansion loans,  working capital loans, and trade loans.

Also read: Latest List of Federal Government Loans and Grants in Nigeria

Features of Small Business Loans for Startups 

Small business loans may be distinguished from personal loans using the following indices: 

• Small business loan amounts are usually higher than personal loans amounts. Financiers already know that the loan will be used to develop a product, import goods, register for a summit, etc. Thus, these are usually considered before setting a maximum loan amount on small business loans for startups.

• Generally, small business loans for startups don’t require much documentation or high revenue. But the personal creditworthiness of the business owner is important. 

• Collateral is usually requested, but not always. Most times, this is based on the amount being loaned. Larger amounts usually require more security, in the form of collateral or a guarantor.

• Just like personal loans, small business loans for startups may be gotten in commercial banks or through digital money lenders. 

14 Small Business Loans for Startups in Nigeria

Fintechs and government agencies are making it easier for Nigerians to fund their businesses.

There are now a variety of loan options available to small business owners, with fair repayment plans. Below are fourteen (14) small business loans for startups in Nigeria: 

#1 – SMEDAN-Sterling SME Loan

The Small and Medium Enterprise Development Agency (SMEDAN) has partnered with Sterling Bank to provide low-interest business loans to nano businesses and SMEs in Nigeria. 

The interesting thing about this loan is that it requires no collateral. The application process is also 100% digital. 

Take these steps to apply for the SMEDAN-Sterling Bank SME loan:

1. Sign up here to generate your business ID
2. Download Banca by Sterling on Google Play or Apple AppStore
3. Sign up on the app
4. Follow the application steps for small business loans for startups. 

#2 – Moniepoint Business Loan

Moniepoint Microfinance Bank, one of the leading Microfinance banks in Nigeria, grants up to ₦1 million to Startups in Nigeria. 

The interest rate ranges from 24% to 40% per annum. Loans are usually approved within three (3) business days maximum.

Small loan amounts not more than ₦1 million require no collateral. Any amount beyond ₦1 million will require some collateral. 

Also read: How to Apply for Long Term Loans in Nigeria

#3 – Renmoney Business Loan

Established in 2012, Renmoney is one of the first loan apps in Nigeria.

Renmoney prides itself in over one million downloads and about ₦132 billion in loan grants. 

Renmoney offers up to ₦15 million in small business loans for startups. The repayment time can also be as long as 24 months. 

Loans are accessible 24/7 and disbursement takes place within 24 hours. 

#4 – EasyKash Business Loan

EasyKash, created by Hollandale Nigeria Ltd., is one of the fastest-growing loan apps in Nigeria with over a million downloads on the Google Play store.

EasyKash has serviced over seven (7) million individuals and businesses since its inception. 

They offer up to ₦500,000 to business owners seeking small business loans for startups. 

#5 – FairMoney Business Loan

A well-known instant loan app, FairMoney has over 10 million downloads on the Google Play Store. 

You can secure up to ₦5 million in business loans on FairMoney. 

#6 – Fidelity Bank’s Commercial Overdraft

The Fidelity bank overdraft plan for business owners is quite innovative. 

You can secure up to ₦10 million for your startup, payable over three (3) months maximum. 

SMEs owned by women enjoy additional discounts on interest rates. 

Note that to qualify for Fidelity bank’s commercial overdraft, you must have a personal or business account with Fidelity Bank, active for at least three (3) months.

To apply for this overdraft, write a formal loan request letter addressed to the bank management. Then visit a Fidelity Bank branch and follow the given steps.

#7 – Branch Business Loan

Branch is a high-rated app for quick loans in Nigeria. Boasting over 40 million downloads on Google Play, Branch gives you a fast and secure loan. 

The application process is 100% digital: it requires no collateral or documentation, no loan origination fees, processing fees, or hidden costs. 

Small business owners can apply for up to ₦500,000 on Branch.

Also read: Understanding Short Term Loans and How they Work

#8 – Aella No-collateral Business Loan

The Aella App was launched in 2019 and continues to prove itself as one of the most reliable means of securing an easy loan in Nigeria. With 1M+ downloads on the Google Play Store, this loan app has an average of 3.2-star rating as of 2024. 

The procedure for getting your loan credit alert is swift and straightforward. You can secure up to ₦1 million for your business on Aella, no collateral needed. 

#9 – Opay Merchant Loan

OPay Merchant loan grants small business loans for startups, specifically opay business merchants.

The interest rate is 3% for short-term loans and up to 15% for long-term loans. Active Opay users also enjoy further interest rate discounts on long-term loans. 

Follow these steps to apply for the OPay Merchants Loan:

1. Download the Opay User App (note; not the Business app) and register. If you already have the app, update it to see the new Merchant Loan feature on your homepage. 
2. Click on “Merchant Loan.”
3. Review the terms of services and click “agree.”
4. Click “Merchant Loans Credit Limits.”
5. Select your preferred loan option 
6. Follow the application procedure as outlined.

#10 – GTBank’s Quick Credit Small Business Loans for Startups

GT Bank offers up to ₦10 million to SMEs, particularly educational institutions (excluding universities), hospitals, retail pharmacies and diagnostic centres.  

Once a loan application is approved, the fund is disbursed instantly. 

Generally, the repayment term is six (6) months maximum. But for SMEs in education, the repayment term can span up to twelve (12) months, with a monthly or quarterly repayment option.

Note that to qualify for GT Bank’s Quick Credit, you must have a Corporate or Business name account with the GT Bank, active for at least 6 months.

To apply for GT’s Quick Credit, follow these steps: 

1. Head to the GAPs/GAPsLite platform 
2. Click on “Loans”
3. Click on “QuickCredit for Small Business”
4. Follow the steps outlined.

11 – Lidya Small Business Loans for Startups 

Founded in 2016 and headquartered in Lagos, Lidya offers loans up to SMEs, accessible within one (1) day.

Lidya helps underserved small businesses to purchase startup goods, pay employees and build a good credit profile.

12 – Access Bank Small Business Loans for Startups 

Small and large-scale business owners in Nigeria, with active access bank accounts, can get up to ₦10 million on Access Bank business loans. 

You can apply for this loan on the Access Bank QuickBucks app by following the steps below: 

1. Download the QuickBucks app on Google Play Store or Apple App Store. Alternatively, you can use the Web version.
2. Register
3. Select “Instant Business Loan” on the homepage and follow the prompts. 

If you encounter any challenge, you can contact your Bank Relationship Manager. 

You can also contact the customer service via WhatsApp 09024072068, or via email at EBCare1@accessbankplc.com 

Also read: Loan Apps in Nigeria that Give Loans Without Credit Check

#13 – Lendha Loans for Undeserved SMEs

Lendha has provided loan solutions to over 40 million SMEs in Nigeria.

Combining their business management products and special loan offers, Lendha directs their focus to SMEs that have closed, or are on the verge of closing within two (2) post-launch, due to: 

• Inadequate funding 
• No collateral to seek funds 
• Poor creditworthiness
• Lack of expertise to create solid proposals or business plans, etc. 
• Lack of functional business structure 

#14 – Federal Government Loan for Nano Businesses and SMEs

In April 2024, the Federal Government of Nigeria launched the ₦200bn Presidential Intervention Fund for Micro, Small and Medium Scale Enterprises and manufacturers in Nigeria.

Nano businesses and SMEs can access up to ₦1 million in this loan plan.

The major advantage of this loan is its low interest rate, as little as 9% per annum. It is secured with a guarantor and any other requirement as may be deemed necessary. 

Existing businesses must be a year or older to qualify for this loan, and must be registered with CAC. 

To apply, visit the loan site and follow the instructions. 

How to Apply for Small Business Loans for Startups on Loan Apps 

The application process for small business loans for startups is usually the same on most digital money lending apps. 

Follow these steps to apply for a business loan on digital money lending apps like Renmoney, Moniepoint, EasyKash, and others discussed above :

1. Install the App from the Google Play Store or Apple App store.
2. Register with your phone number or email address and the verification code sent to you.
3. Some loan apps will require that you fill out a form on your details, including your BVN.
4. Some apps will require access to your location, contacts, and SMS; do this and proceed. 
5. Select your loan option and check your eligibility. Note that some apps will offer you a loan option based on the financial information you provided. Accept the offer if suitable for your business needs. 
6. Submit documents where necessary.
7. Await approval, verification and disbursement.

Also read: Payday Loan Business: Find out How Payday Loan Works

How to Secure Small Business Loans for Startups

Applying for a loan is a good step. But a better step is putting in an excellent application. 

Would you like to know how to collate an outstanding application? One that secures your loan straight up? Of course, you do. 

Here are some measures you can take to strengthen your application for small business loans for startups in Nigeria 2024: 

1. Register Your Business

The Corporate Affairs Commission (CAC) makes it mandatory for enterprises in Nigeria to register under them.

Thus lenders usually require a Certificate of Incorporation or Business Name Registration.

Even POS vendors have been mandated to register under CAC. Registering your business under CAC increases your business credibility in the sight of financiers.

Once registered, don’t lose your documents: keep both soft and hard copies.

2. Draw up a Solid Business Plan

Presenting a business plan to lenders sets you out as one who knows their future path.

While lenders may not request a business plan, it is important to include a well-structured one nevertheless. State your business vision, mission, goals, marketing strategies, etc.

This leaves a good impression. It convinces your financier of the steps you would take to make the money back for repayment and to stabilize your business.

3. Keep Credible Financial Records

Ensure you are in financial good standing. If you are a business owner, your credit check will most likely be considered before a small business loan is granted.

Business owners with clean financial records—no overdue debts, no bankruptcy, a good credit score, etc—are more likely to secure a small business loan. 

4. Collate Your Financial Statements

Some money lenders may request for your business financial statements such as balance sheets and income statements. Update them accordingly with accurate figures. Don’t falsify. 

5. Brag About Your Business

If you are required to write an application letter or to fill out an application form, don’t hold back on talking passionately about your business.

Brag about its competitive advantage, steady income, etc. This assures your lender that your business is profitable, and they have nothing to lose 

6. Don’t be Afraid to Seek Professional Assistance

Enlisting the help of a business consultant,  accountant, etc., is highly recommended. Don’t be afraid to go for it.

Their expertise gives your application a touch of professionalism and confidence that you may not know how to evoke. 

Frequently Asked Questions 

Conclusion: Ready to Take Your Loan?

Go for it! Apply for that loan with confidence. Use the funds judiciously for your small business. And ensure your business is able to afford a consistent repayment plan.

Remember that paying loans on time boosts your credit history, giving you better chances of securing even bigger loans and grants when needed. 

See our blog for more advice on loans for your small business, and even personal loans. For more interesting and informative reads, follow us on X or Twitter, @SiliconAfriTech.

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References

• www.linkedin.com – Guide To Securing A Small Business Loan In Nigeria by Ted Iwere
• www.f6s.com – 7 top Small Business Lending companies and startups in Nigeria in June 2024
• www.blog.opayweb.com – Six Easy Steps to Apply for the Opay Merchant Loan