Nigeria, being a developing economy, is faced with various problems despite the huge potential it has. One of those things that seems to be holding back its potential in the world economy is the lack of facilities and an enabling environment for new and existing businesses to operate. 

Most people who are business-minded are either not able to finance it adequately when they start or even afford to start at all. The report by the Nigeria Bureau of Statistics says that more than half of new businesses in Nigeria go extinct within 2 years of existence. 

All in all, some of those businesses that ended up surviving were able to scale through amid a dwindling economy, most times because of their knowledge and ability to seek business funding from banks and other financial institutions. 

If you are really interested in seeking loans to help fund your new or existing business, this article is for you. We will be looking at 7 of the best banks for small business startup loans in Nigeria. These banks have been instrumental in the growth of many startups in Nigeria by offering them low-interest loans to help fund their businesses.

Best banks for small business loan in Nigeria

7 Banks for Small Business Startup Loans in Nigeria 

1. First Bank

First Bank Nigeria is one of the leading financial institutions in the country, known not only for offering one of the best banking services but also for having several loan offers to both large and small businesses. Based on a 2022 reports, the bank gave out close to N3.59 trillion in loans to both startups and existing businesses. This figure shows how committed the bank is to facilitating businesses with the necessary funding they need to sail. 

FirstBank Nigeria is one of your best bets if you want low-interest and considerate-term loans for your startup or growing business. The reasons are not far-fetched; they offer loans to almost everyone, irrespective of the type of business you do, the location, or even the scale of the business. 

The major thing that is required of you as a small-scale entrepreneur by the bank is to discuss with them how you plan to use the money and your preferred payback plan or procedures. As long as you meet the terms and conditions of the loan you apply for, you are one step closer to getting a loan to fund your small business to the heights you want it to attain. 

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2. Union Bank

Union Bank is another top bank that has a lot to offer both medium- and small-scale startups in Nigeria. Like First Bank, they have several loan packages for both individuals and businesses of any type and scale. 

Union Bank’s business loan is known as the non-payroll loan, and its main focus is helping growing businesses scale up. Moreso, with Union Bank, you can get loans as self-employed, cash-backed loans, and overdrafts. 

With a self-employed loan, you have access to take loans up to N5 million as a small business owner, while with an overdraft, you can access up to N10 million. Also, as a customer seeking cash-backed loans, you can get up to 80% of the money you seek in a loan for your startup. 

What makes Union Bank loans unique is that there is always room for every profit-making business owner to access loans, irrespective of their business type or even scale. 

3. Access Bank

If you are looking to scale your business with appropriate funding in no time, then you can’t go wrong with Access Bank plc. Access Bank has multiple loan offers for both corporate bodies and individual businesses looking to up their game and possibly looking towards expansion. 

One of the few things that makes Access Bank stand out in the league of financial institutions in Nigeria is its reputation, especially its impressive loan offers. It all boils down to several corporate business loans, which include time and term loans, asset financing, car loans, mortgages, and lots more. 

With billions of naira being loaned out to individuals, small businesses, and corporations year in and year out, it is without doubt that Access Bank is an ideal bank for small business startup loans. Another reason is that the loans are accessible to every customer as long as you meet the requirements. 

4. Guaranty Trust Bank 

When it comes to loans with an array of options and terms, Guaranty Trust Bank is one of the best. The bank has some of the best loan offers, which include asset financing, imports, exports, overdrafts, and lots more. These and many other vast offers are why GTB has become a go-to option for new and established entrepreneurs seeking loans to fund their businesses. 

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The major issue that most people seeking loans from GTB face is having to meet the necessary requirements. You may want to get discouraged at this juncture, but you don’t have to be because GTB has more to offer you as an entrepreneur compared to some other commercial banks. The offers are very attractive, and when you are able to meet their requirements, you are one step ahead of securing approval and enough funding for your next business plan.

5. Stanbic IBTC Bank

Stanbic IBTC is another bank focused on offering attractive and low-interest loans for SMEs and big businesses. Aside from the attractive offer that Stanbic IBTC presents, one special thing is the ease of application. If you have a Stanbic IBTC bank account, you can easily apply for an SME loan online, and if you meet the requirements, your loan will be granted in no time. In fact, some loans don’t even take more than 24 hours to be disbursed. 

The bank’s major focus pillars are support, speed, ease, and flexibility. Flexibility is one of the most loved pillars by entrepreneurs. The reason is that it allows one to structure the payment terms based on the cash flow of the business. So you only pay at your own convenience and, most importantly, as the money comes. 

Like the others on this list, Stanbic IBTC Bank loans are accessible to anyone as long as you are a customer. They do not differentiate business type or size but rather are more interested in potential and the ability to pay back as planned. 

6. Heritage Bank

Heritage Bank may not be as popular as many other commercial banks, but it is popular for one thing: attractive and quality loans for SMEs. Over the years, the bank has made significant strides in promoting access to loan facilities and the market for SMEs. One such initiative is the Youth Innovative Entrepreneurship Program (YIEDP), which is supported by the Central Bank of Nigeria as one of its commitments to the development and success of SMEs and youth development. 

Basically, the program is focused on harnessing the talent, skills, and entrepreneurial spirit among the youth by offering them adequate and enough capital to fund their business ideas. There are also provisions to support corporate members, market men and women, and anyone who wishes to get a loan to finance their businesses via short-term loans.

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7. Advans Nigeria

Advans Nigeria is a very popular lending platform that gives individuals and businesses access to low-interest loans to solve financial issues or fund their businesses. Even though the platform offers options for personal loans, it is more focused on providing loan services for businesses. 

Getting a loan on Advans is a simple and easy process. All you need to do is download its mobile application, sign up with your details, and apply for a business loan. 

Aside from being a loaning platform, Advans also has a feature that allows you to save money in your Advans account. They also offer various point-of-sale services, such as the withdrawal of cash, bank transfers, and loan repayment. 

Advans Nigeria is more like a microfinance bank offering digital banking services, of which loaning happens to be one of its services. It is also important to know that this platform is aimed at only small business owners who need loans to finance certain aspects of their businesses and personal loans only. 

Bottom Line 

Inadequate loan facilities seem to be one of the biggest problems facing SMEs in Nigeria. And most businesses in Nigeria don’t last the test of time due to a lack of sufficient funding. However, in the midst of nothing at all, there is obviously something. Some commercial banks in Nigeria have, over the years, helped many SMEs scale through by providing them with adequate, quality, and affordable low-interest loans needed to fast-track the growth of their businesses. 

If you are still wondering which bank to get a loan from for your startup at this point, then you are in for a treat. Most of the banks on our list were properly researched, including certain things like loan criteria, terms, conditions, collateral, and repayment options were put into consideration. Almost every commercial bank will often request that you bring collateral, while for microfinance banks, it is often guarantors. Whichever one you are applying for, it is important that you weigh both the downsides and the upsides before making your decision.

Notice

Many loan apps change their interest rates and repayment terms over time. Always review the terms and conditions carefully before downloading any loan app. B4loan doesn't promote any loan app, we just help you make informed decisions.

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