A loan can sometimes be the catalyst an entrepreneur needs to grow their business. The loan gives them the funds they require to expand, increase inventory, hire more labour, pay bills, and run marketing campaigns, leading to an increase in revenue.
While a loan can be beneficial to your business, you also need to be careful to ensure you aren’t setting your business up for failure. When thinking about getting a loan, you need to consider some things to ensure you are getting the best loan possible.
Here are some of the things you need to consider when getting a loan:
1. The Loan Application & Funding Process
When you are thinking about getting a loan, you are advised to do detailed research about lending companies. You should learn about their conditions, application processes and more. A good understanding of the application process and all that’s needed makes it easier for you to decide if you want to apply or not.
Applying for loans can be very stressful, with difficult conditions and cumbersome. However, Flutterwave Capital has made accessing loans seamless. No collateral is needed, no cumbersome paperwork and stringent conditions. You only need to check your eligibility, apply and you’ll get the funds in less than 24 hours. It’s important to note that you need to be a Flutterwave Business before you can access loans from Flutterwave Capital. Create your Flutterwave for business account and start transacting here.
2. Total Repayment Amount
When considering getting a loan, it is important to know the total amount you are expected to pay back during the duration of your loan. You don’t want to take a loan without having clarity about the amount you’re expected to pay back, this may include some fees and the loan interest rate.
With Flutterwave Capital, if you take a loan of 100,000 Naira at a 5% interest rate for 30 days; this means your total repayment amount is 105,000 Naira at the end of the loan term. This interest rate & duration varies across multiple lenders, this is why you must ensure you have clarity before you accept the loan offer.
3. Ease Of Repayment
Knowing the total repayment amount is important and so is the loan repayment structure. You need to know how you will be paying back the loan; is it daily, monthly, quarterly and through which medium? If the repayment structure isn’t convenient for you, it can impact how you repay your loan. You should also ask questions about defaulting repayment; does it attract extra charges?
Flutterwave Capital offers an easy repayment structure, repayment is easily processed with an automated deduction of a percentage of daily sales, at a maximum rate of 25%. If you do not make enough sales to cover your repayment amount for that day, we will deduct a maximum of 75% from your daily sales while the outstanding repayment amount will spill over to the next day.
Before getting a loan, you need to understand the eligibility process. You need to review your business data to know if you are eligible for a loan. Most credit lending companies have their eligibility requirements like the purpose of the loan, revenue, growth rate and more. You need to thoroughly research the eligibility requirements for the lending companies you are thinking of approaching.
At Flutterwave Capital, we have some eligibility criteria before a loan application can be considered. Some of them include:
- Being based in Nigeria (we’re starting in Nigeria before we expand to other countries in Africa).
- Actively processing payments on your Flutterwave for Business account for at least 6 months.
- Having a good reputation with Flutterwave Capital. This means you must not have defaulted on previous loans, and if your business previously applied for a Capital loan and was rejected, you would be ineligible to receive a new loan offer for 30 days.
You can learn more about the eligibility requirements of Flutterwave Capital in this article.
We hope this article helps you understand some of the things you need to consider before applying for and accepting a loan.