THE SMEDAN LOAN: A GUIDE FOR SMALL BUSINESS OWNERS.

To the millions of small business owners in Nigeria, the bottom line then the most important obstacle towards growth has been access to affordable capital. It goes without saying; you have a potential business that is doing well, you have willing customers, and you have no capital to purchase products, improve machinery, and grow your store. The Small and Medium Enterprises Development Agency of Nigeria or SMEDAN has decided to respond to this challenge by putting in place a number of intervention funds. The starting point to getting the finance that your business needs is to know how this loan operates.

So just what is the SMEDAN Loan?

It is worth elucidating that SMEDAN is not a direct bank that works by lending money, but rather a development regulatory body. In case of persons mentioning the SMEDAN loan, they are mostly referring to credit facilities that are availed after collaboration between SMEDAN and other financial institutions. They are, Development Bank of Nigeria, bank of industry, NIRSAL Microfinance bank and state governments.

The work of SMEDAN is the identification, registration, and checking of small businesses, in order to guarantee or make the recommendation to partner lenders. Basically, registration with SMEDAN and their training and enumeration process enhances your creditibility and qualifies you to take a single-digit interest loan between three hundred thousand to several million in accordance to the value of your business and the particular scheme of partnering.

Who is Eligible to Apply?

It is intended to be eligible to the genuine micro, small or medium enterprise in Nigeria. Your company has to be incorporated under the corporate affairs commission. You should be doing business in Nigeria and you should have the capacity to furnish you with basic records of what you are conducting. Notably, the top priority is given to those business enterprises which made the registration into the SMEDAN National Enterprise Registration and have attended agency training or empowerment programmes. The people that require personal consumption loans should not apply, this funding is limited to business expansion.

Application Guide Step by Step.

This facility will need time to be acquired. The scheme is highly digital in nature but commences offline with your business records. Start by registering your business in the official SMEDAN registration site and register the National Enterprise. You will get your own identification number which will open all their programmes.

Second, prepare your papers. This will generally be your CAC registration certificate, a valid form of identification, passport photographs, your SMEDAN registration number, as well as a mere business plan or proposal on how precisely the money will actually be used.

Third, watch the news of SMEDAN about some loan scheme. These are usually initiated together with a state government or even a given bank. Complete the formal procedure, most of the time it means that you have to complete an online application form and submit your documents.

Fourth, be ready to be verified. A physical verification of your premises of business shall be performed by SMEDAN and your partner bank. They would like to know that your business is a reality, in operation and is capable of repaying the loan.

Lastly, in case you are successful, you will be subjected to a financial literacy and repayment training, which is mandatory. Ten-day transaction- Once you sign your deal, the money is sent directly to your business bank account.

Psychographic Follies that Cause Rejection.

Several business people have lamented that they have been sidelined or sacked. The causes can be usually avoided. The most frequent error is that the initial SMEDAN registration or the use of the false information is not done. The other one is going into the process without having a clear business plan; the lenders want to see how you will make the profit to pay them back. Last, there are also applicants who present incomplete and fabricated documents. The screening team is efficient and any difference will result to automatic disqualification.

Accountable Borrowing and Repayment.

A loan is a tool, not a gift. Interest rates charged on loans funded by SMEDAN are meaning five to nine percent per annum which is much lower than the twenty percent and above charged by microfinance banks. Nevertheless, the history of your use of a loan will be indicated in the national credit system. Late betting of a lending of SMEDAN will spoil any possibilities of obtaining government financial aid in the future and may result in legal reclaim procedures. Borrowing always should be what you can comfortably pay off using the incremental profits brought about by the loan.

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Eligibility in Case of Not being eligible.

Do not despair in case you are too slow with the SMEDAN process or you do not meet the requirements. Get interested in the Bank of Industry,Xiao Wei Dai Kuan, nano-business, or go to your state government enterprise agency. Some states have their parallel funds of the traders and artisans. Another option is to consider becoming a member of a group with other trusted business owners to use group lending scheme, which is less risky to the lender.

The SMEDAN lending channel provides a plausible growth opportunity to the small business owner who is hard working. It is not an instant process, though it is a just one. Register, maintain a simple record and have a definite plan. The money you are seeking is waiting though you would have to show that you are worth it.