How to get approved for a business loan in Nigeria – 10 Easy Steps
August 19, 2025
Understanding how to get approved for a business loan is a step forward towards raising capital or funds for your business. Loan is an integral part of financing a business, because it eases growth. So if you think you need loan to achieve for company goal, then read this article to the end. We have carefully put together how to get approved for a business loan. Especially if you are based in Nigeria.
There are numerous challenges and opportunities that comes with operating a small business in Nigeria. From agriculture, to trading, services and manufacturing, Nigerian business owner plays an essential role in directing the economic system. Yet, one of the major and biggest challenge or difficulty small entrepreneurs face is access to funds.
A business loan will help expand business operations, manage cash inflow/outflow, buy equipment or even help in unveiling new ideas. Still, many small business loan application in Nigeria are mostly denied. The reason why they are being rejected ranges from bad documentation to lack of collateral, poor credit history, or clearly does not know how lenders function.
As said earlier, this article contains a step-by-step guide on how to get approved for a business loan in Nigeria. The necessary steps you must take to optimize your chances of getting approved for a small business loan in Nigeria. Whether you are requesting through a microfinance institution, commercial banks or an online loan app, these steps will help you in standing your business for success.
Before requesting for a business loan, it is crucial to know and understand the financing network. Small businesses loans can come from:
Commercial banks: commercial banks generally give out loans but do require collateral, comprehensive documentation and guarantors. Examples: Wema Bank, Sterling Bank, Access bank.
Microfinance Bank: They are crafted for small enterprises and people who does not have access to commercial banks. They often offer smaller amounts with more adaptable requirements.
Government loan schemes: Government loan programs such as the CBN intervention funds, NIRSAL microfinance Bank and BOI loans. They often have lower interest rate and longer repayment plans.
Cooperatives and trade associations: Society-based loans where trust and joint contribution replaces stringent back requirements.
Understanding where you business best fit amongst these alternatives will help you in choosing the right and best financier and improve your approval chances.
The 10 steps on How to get approved for a business loan – 10 Easy Steps
Step 1: Build a Solid Business Plan
One of the major and basic requirements for a small business loan in Nigeria is a Business plan. Financier wants to see and know you are not just guessing but you have a clear plan.
Your business strategy should include:
Executive overview/summary: A brief introduction of your enterprise.
Business description: The category of your business, nature of Industry and target customers.
Product/services: Be specific about what you are offering and why individuals will purchase from you.
Market analysis: Have a detailed research showing the high demand for your product/goods
Financial forecasts: You must have an expected profit, expenses and revenue
Loan purpose: Show exactly what you will need the loan for and how it will help promote the business.
Step 2: Maintain accurate financial record
Most Nigerian enterprises do not accurate financial record. Regrettably, this this is one of the major reasons loan applications fail. Financiers wants to see:
Proof of expenses and income.
Bank statements showing cash inflow/outflow.
Proof of profitability ( potential earnings)
If you are new in the business, financial projections and personal bank statements can be used. But you must ensure to show that you are ready for the loan repayment.
Tip: For proper tracking of sales, profits and expenses, you can make use of fig A simple tools like Microsoft Excel, bookkeeping apps or even manual record book.
Step 3: Improve your creditworthiness (credit rating)
Your credit history issues a lot. In Nigeria, credit records are managed by credit reference agencies CRC credit bureau. Financiers usually check if you have unpaid loans, poor repayment record or bounced cheques.
How to improve your creditworthiness:
Ensure to repay your debts on time.
Make sure to avoid excessive borrowing from various financiers at once.
Ensure you keep an healthy or food looking balance in your bank account.
If tryable, take little loans and repay them instantly so as to build a positive loan record.
Step 4: Prepare all required and essential documents
Financiers mostly reject applications clearly because major documents are missing. Some essential requirements include:
Certificate of business registration (CAC): To prove that you are legal and licensed business.
Tax Identification Number (TIN): Major commercial banks require proof that often pay your taxes.
Bank statements (usually 6 – 12 months): To show your enterprise cash inflow/outflow.
Valid identification: You will need your National ID card, international passport, Voters card or driver license for Identification.
Collateral (if demanded): Show real property documents, fixed deposits, or other assets.
If you are requesting for a loan through government scheme, the requirements may be simpler, but possessing all documents might increase your chances of approval.
Step 5: Choose the right loan product
Not all loans are equal. Choosing the right business loan will surely increase your chances of loan approval. For example :
If you need #150000 to replenish goods, a microfinance or fintech loan would be faster.
If you need #6 million to expand your business, a commercial bank or BOI loan is more advisable.
Financiers wants to know and see that your loan requests matches your business capability.
Step 6: Build a relationship with your Bank or Financier
In Nigeria, relationships matters s lot. A commercial bank is most likely to approve your loan requests, if you have been managing an account with them for a while. Practical steps:
Oversee all your enterprise transactions through your bank account.
Ensure to save regularly into your bank account, even if it’s little amounts.
Ensure frequent communication with your account officer.
This would build trust and will also give the bank confidence that you are serious about your business.
Step 7: Demonstrate an ability to repay
All financier have one major and particular question. Can you pay back the loan ? To show this, you should:
Show steady income
Make sure to have a simple and clear repayment plan.
Avoid exaggerating your profits
Be practical in your loan requests.
Step 8: Explore government and CBN intervention loans
The Nigerian government and Central Bank of Nigeria (CBN) offers several loan schemes aimed at small enterprises. These ones usually have lower interest rates and longer repayment conditions. Examples include:
These programs might have more stern application processes, but once it’s approved, they provide needed support at affordable rates.
Step 9: Consider Collateral Alternatives
Most Nigerian small enterprises have rejected loans is because of the lack of collateral. Nevertheless, there are alternatives:
Guarantors: some financiers accept trustworthy guarantors instead of assets.
Group lending/cooperatives: Loans are majorly provided to groups where the members guarantees eachother.
Invoice funding: if you have unpaid invoices from customers, some financiers make use of them as collateral.
Savings records: frequent savings with a cooperative or commercial bank can often serve as a collateral.
Step 10: Avoid common mistakes:
Most loan requests fail due to simple mistakes. In order to prevent this you must avoid:
Exaggerating your enterprise profits or income.
Presenting incomplete documents.
Requesting for various loans at a time.
Making use of the loan for personal use and not of business use.
Remember, financiers always track how you make use of the funds provided to you. Misusing the funds can affect your future request or applications.
Extra tips on how to get a business loan in Nigeria
Start small if tryable: build a strong loan repayment record before applying for huge amounts.
Seek financial literacy training: most commercial banks and agencies in Nigeria provide free trainings for small and medium-sized enterprises (SMEs).
Be transparent: Transparency with your financier goes long way.
Explore various options: you shouldn’t limit yourself yourself to one commercial bank, compare different financiers.
Conclusion
In Nigeria, getting approved for a small enterprise Lian is not impossible. The solution lies in preparation, credibility and choosing the right financier. By having a strong business strategy, maintaining good records, creating a strong credit history and having knowledge of loan requirements, you will substantially increase your chances of loan approval.
Make sure to remember loans are not free funds. They are tools to use so as to help grow your business. If appropriately managed, a small enterprise loan will help in creating jobs and expanding your business and also help you in attaining your long-term financial success.
Travla.xyz offers a seamless, user-friendly experience for listing and discovering a wide array of categories, including electronics, vehicles, real estate, jobs, services, and more.
Whether you’re a small business looking to expand your reach or an individual searching for affordable goods and services, Travla.xyz is your go-to marketplace.
Travla Property Management Ltd is fully registered with the Corporate Affairs Commission in Nigeria with COMPANY REGISTRATION NO. 8248515.Â
Our Services
Real Estate Consulting
Property Management
Short Lets / Hotel Bookings
Property Development
Marketing And Sales Of Property
Join Our Community
At Travla.xyz, we’re building a community of property owners who share our vision of simplifying property monetization experiences. Join us today and experience the future of real estate.
