Are you seeking assistance to kickstart or expand your small or medium-sized business in Nigeria? Look no further than the Bank of Industry (BOI) Loan, which offers tailored financial solutions to fuel the growth of entrepreneurs across various sectors.
In this comprehensive guide, we delve into the application process and the requisite requirements for securing a BOI Loan, empowering you with the knowledge needed to navigate this financial opportunity seamlessly.
How to Apply for a Bank of Industry Loan:
Physical Application: Entrepreneurs have the option to submit their loan applications in person by visiting any of the BOI branch offices situated across 24 states within the 6 geopolitical zones of Nigeria, or at the BOI headquarters located in Lagos State. This approach offers direct access to BOI representatives who can provide guidance and assistance throughout the application process.
Online Application: Alternatively, applicants can opt for the convenience of online application through the Bank of Industry website or the designated application portal. This digital platform streamlines the application procedure, allowing entrepreneurs to submit their loan requests from the comfort of their homes or offices, eliminating geographical barriers and enhancing accessibility.
It's essential to note that BOI Term Loans accrue interest at a maximum rate of 10% per annum, while interest rates for working capital loans range between 12-15% per annum. BOI loans commence from a minimum amount of N5 million, although smaller loans may be accessible through the bank's matching funds platform, facilitated in collaboration with Microfinance banks.
Bank of Industry Loan Requirements:
Micro-credit Loans:
- Application letter
- Certificate of Registration (photocopy)
- Copy of cooperative’s constitution and bye-laws
- Business plan
- Business owner’s passport photographs (4 copies)
- Copy of means of identification
- Business bank statement for one year
- Record of sales for six months and operating expenses
- Evidence of collateral
Small and Medium-scale Enterprise/Large scale Entrepreneur:
- Formal letter of application
- Copies of the certificate of incorporation, a certified true copy of the memorandum, and articles of association
- Photocopies of the certified true copy of forms C02 and C07
- Business plan
- Statutory Certificate of Occupancy or Deed of Assignment
- Photocopy of title documents to the collateral
- Approved building plan
- Estimate of the cost to be incurred on the factory building
- Valuation reports on factory building(s) (for existing projects) and property offered as collateral security
- Plant and machinery quotations
- Audited accounts of the business in the last three years
- Tax clearance certificate for the company and two directors for the previous three years
- Passport photographs of each of the two directors and the company secretary (4 copies)
- Evidence of appointment
The Bank of Industry prioritizes accountability and risk management, thus requiring businesses to pledge assets as collateral to secure the loan. Other security options include bank guarantees, mortgages on landed property, debentures, and external guarantors for loans valued under N10 million.
Things You Should Know Before Your Loan Application
Mandate
The Bank of Industry targets businesses that engage in manufacturing and processing activities. Target sub-sectors include Agro-processing, Solid Minerals, Information Technology, Oil and Gas, and Creative Industry.
Entities that BOI Finances
Bank of Industry only finances enterprises or companies and not an individual person or group of persons. The company/enterprise must be duly registered and are required to provide the registration number for a Limited Liability Company or business name for an enterprise before you can proceed with your application.
Items that BOI can finance
The bank is principally set up to finance industrial equipment used in manufacturing. The Bank does not finance land and building which are expected to be financed from equity. You can also access your working capital requirements from any of the ten (10) SME-friendly banks that the Bank of Industry partners with at the Monetary Policy Rate plus 6 percent.
Mode of disbursement
The bank does not disburse the loan to the borrower in cash but to the vendors and suppliers of the equipment that the loan application is for.
The amount that can be financed by BOI
BOI’s loan support to the SME starts from N5 million. However, loans below N5 million are provided on our matching fund platform which is operated in collaboration with various state governments, and on our Bottom of the Pyramid (BOP) scheme which is operated through MicroFinance Banks.
How long does it take to process a BOI Loan application?
The processing time for BOI Loan applications may vary depending on factors such as the completeness of the application, the complexity of the project or business, and the volume of applications being processed.
However, the loan processing time usually does not exceed 30 to 40 working days. More time will be required to process bigger loan requests. Generally, BOI aims to expedite the loan approval process and provide timely funding to eligible borrowers.
Is collateral required for a BOI Loan?
Collateral requirements may vary depending on the type and size of the loan, as well as the risk assessment conducted by BOI. While collateral may be required to secure certain loan facilities, BOI also offers non-collateralized loans for micro, small, and medium-sized enterprises (MSMEs) through its various intervention funds and programs.
Types of security the Bank accepts include:
- Legal mortgage on a landed property. The property must be duly registered with a Certificate of Occupancy
- Debenture on assets of the company
- Bank Guarantee
- External Guarantors with Notarized statements of net worth for loans below N10 million.
Please note that the Bank is willing to share assets previously pledged to other lenders provided the Bank’s loan is adequately covered in the arrangement. Also, note that the Bank is willing to accept third-party collateral.
In Conclusion:
If you aspire to expand and propel your business to new heights, the Bank of Industry offers tailored financial solutions designed to meet your capital-intensive financing needs. With its array of loan products and comprehensive support services, BOI stands as a strategic partner in your entrepreneurial journey, facilitating sustainable growth and prosperity for businesses across Nigeria.