As a small business owner, you need your business to grow. Growing your business requires more funds and they can be acquired through any means. One of them is loans. A loan is simply the lending of money by one or more individuals, organizations, or other entities to others.
In Nigeria, there are various ways to acquire loans. It can be through banks, friends, family, and/or cooperatives. Getting loans used to be a bit tedious. But now thanks to technology, one can easily get loans by downloading a loan app and filling the forms to qualify for the loan.
There are various types of loans with different payment options for a small business. We have;
- personal loans,
- credit cards,
- home equity loans,
- cash advances,
- small business loans.
Personal loans offer borrowed funds in one initial lump sum with relatively lower interest rates. This type of loan is repaid over a finite period and funds are offered from a lender at a specified interest rate. The monthly payments include principal and interest, late fees, underwriting requirements, amount limits, and more. This arrangement usually comes with lower interest for borrowers with a good to high credit score.
Credit Cards are a type of revolving credit that gives the borrower access to funds as long as the account remains in good standing.
Home Equity Loan
Home Equity Loans is a type of loan in which the borrower uses the equity of his or her home as collateral. The value of the property determines the loan amount.
Cash Advance sometimes called payday advance is something associated with a credit card or other line of credit.
Small Business Loans
These loans are specifically for small businesses and they are granted only after the business owner has submitted a formal business plan for review. The terms of the loan usually include a personal guarantee, meaning that the business owner’s assets serve as collateral against default on repayment. These loans are only extended for periods of five to twenty-five years. Interest rates are sometimes negotiable.
We all know that most times when the word loan comes up, the first place we think of is a bank. Commercial banks like UBA, etc. give loans to small and upcoming businesses, however, cooperative societies are a good place to start when a small business seeks loans.
By joining one and becoming a member, you can join resources with others to reach certain goals. The cooperative society can use the deposit from its members as collateral to obtain a large loan from a bank that can help the members financially.
WHY SHOULD A SMALL BUSINESS GET LOANS FROM A COOPERATIVE?
- Easy Requirements: Getting loans from cooperatives is fairly easy as all you have to do is register and become a member of the cooperative.
- Protection As Default Guarantors: The cooperative protects its members are default guarantors for any loans they take on a member’s behalf.
- Reasonable Interest Rate: The interest rate on repayment of loans are not as crushing as that of banks.
Unlike its counterparts, cooperative loans are easier. This, however, does not mean it cannot be a tedious process that involves a lot of paperwork. This is where EasyCoop steps in. Easycoop’s smart technology has made loan application a seamless process. You can apply from anywhere as everything is online. Even cooperative society executives are able to monitor loan applications in real-time without having to drown in paper and ink. Every information is saved in the cloud and you can access it anywhere.
Easycoop provides companies and individuals an easy and efficient way to manage their savings, loans, members’ contributions. One of its remarkable features is the generation of standard reports on all cooperative operations.