How to access loan from BoI
IN continuation with this series on Bank of Industry, BoI, we continue listing some basic pre-requisites for businesses wishing to get loan from the BoI, one of which is the collateral requirements. As part of the fiduciary responsibility in managing funds under its care, BoI requires that you pledge some assets (mainly fixed assets) to secure your loan. However, the Bank also accepts other forms of security subject to adequate coverage of the loan being provided to you.
Types of security the Bank accepts include: Legal mortgage on a landed property which must be duly registered with a Certificate of Occupancy; Debenture on assets of the company; Bank Guarantee; and External Guarantors with Notarized statement of Networth for loans below N10 million. In addressing some challenges faced by some borrowers who may have given assets for loan in other banks, BoI says it is willing to share that same assets previously pledged to other lenders provided the Bank’s loan is adequately covered in the arrangement.
Collateral requirement Other flexibility in BoI’s collateral requirements include third party arrangement whereby the borrower can get someone else or a different company’s assets to pledge as collateral for the loan. The next important issue in approaching BoI for loan is business track record where the Bank, under its general risk acceptance criteria, requires a prospective borrower to have at least three years acceptable performance track record.
This means your business ought to be up and running for at least three years with clear evidence to that effect. However, the Bank says it can also lend to start-ups, (less than three years but already commenced business) at its discretion and on a case-by-case basis. But it also requires that the new business owner would need to provide proof of cognate experience in its business area and would need to have a highly qualified management and operational team with sound management structure on ground to get BoI’s loan approval. Vanguard