Are you a youth starting a new business in Nigeria? Getting money to start your business can be hard. Commercial banks often have strict rules that can delay the process of getting a loan from them. However, there’s a growing trend of private lenders for business startups offering alternative financing solution in Nigeria.
In this article, we will talk about private lenders for business startup loans in Nigeria. We’ll discuss their advantages, and what to think about when applying for a loan from them.
Key Takeaways
- Private lenders are individuals or organizations that provide loans to businesses, often outside the traditional banking system.
- There two major types of private lenders, microfinance institutions and online money lending platforms.
- Some individuals also give loans but make sure you verify and do proper research before taking money from and individual money lender.
Table of Contents
Who are Private Lenders?
Private lenders are individuals or organizations that provide loans to businesses, often outside the traditional banking system. They can be either wealthy individuals or specialized lending institutions and cooperatives.
Unlike banks, private lenders may have more flexible requirements and faster approval processes which makes them a better option for startup loans.
Types of Private Lenders in Nigeria
There are two main types of private money lenders in Nigeria.
- Microfinance institutions (MFIs): These are like smaller banks that give loans to people who don’t have a lot of money. They are easier to deal with than big banks.
- Online lending platforms (Fintech): These are like digital banks that let you borrow money quickly and easily. They usually approve loans very fast. Some popular ones include FINT, Carbon, QuickCheck, FairMoney, and Renmoney.
Top 6 Private Lenders for Business Startup Loans in Nigeria
Below is our list of top private money lenders that you can get loans from for your startup. This list consists of Fintech companies in Nigeria that provides quick and easily accessible loans for businesses.
#1. Fint
Fint is a top peer-to-peer lending platform in Nigeria, that connects verified borrowers directly with investors. They offer personal loans with low interest rates and flexible payment plans. Everything is transparent, affordable, and easy to use. Borrowers can apply online and get approved in just two days. No collateral or paperwork is required for this application.
#2. Palmcredit
PalmCredit is a mobile app that gives you quick loans. It’s easy to use and fast. Many people in Nigeria use PalmCredit when they need money. You don’t need anything to secure a loan, and you can choose how to pay it back.
#3. Fairmoney
FairMoney is a great choice if you need a quick loan from a private lender in Nigeria. This mobile banking app offers loans, bill payments, and airtime. You can borrow up to 500K without needing collateral. This loan app has flexible repayment plans and low interest rates. It’s easy to apply, making it a popular choice for many Nigerians. FairMoney also has a loan calculator to help you figure out interest rates and also offers loan extensions.
#4. SukFin
SukFin is a platform that links those in need of business funding to loan companies. All you need to do is to tell them how much money you need and what you plan to use it for. They will carefully match your requirements with their network of lenders. Their goal is to help you get your loan approved quickly and efficiently, so you can focus on growing your business.
#5. QuickCheck
QuickCheck is a Nigerian online lender that uses technology to evaluate borrowers’ financial reliability. They provide various loan types, from personal loans to business loans, without requiring any collateral. QuickCheck is recognized for its fast loan approval and crediting process.
#6. Aella Credit
Aella Credit is a Nigerian online lender that provides quick loans to employees of established companies. They work with employers to offer borrowers attractive interest rates and flexible payment options. Their easy-to-use online application makes borrowing straightforward. However, they only lend to individuals with a confirmed income source.
Other Private Lenders You can Access Within Your Locality
In the table below have also provided a list of non-fintech private cooperatives that offer financing services for businesses across the nation. Make sure you make further enquires about these lenders before taking a loan from them.
| NAME OF LENDER | LOCATION |
| Ihesco Global Nigeria Limited | Owerri, Imo state |
| StartCredits | Lagos state |
| Loannage Group INC. | Enugu state |
| Guaranteed Loan | Owerri, Imo state |
| Creditville Limited | Port Harcourt, Rivers state |
| Silverkuun Cooperative Society | Abuja |
| Pennylender Limited | Abuja |
| Credit Shore Cooperative Limited | Owerri, Imo state |
Advantages of Choosing Private Lenders for your Startup Loan
The rise of private lenders is a relief to Nigerians who knows what it means to go through hell just to get a loan from traditional banks.
Here are some advantages of choosing private lenders for a startup loan:
- Private lenders can offer more flexible terms than banks, such as variable interest rates or different repayment schedules.
- They are more willing to lend smaller amounts, which can be ideal for early-stage startups.
- Private lenders have fewer stringent requirements compared to banks, such as extensive financial history or collateral.
- Private lenders most times, have fewer bureaucratic processes, making it quicker for them to approve and disburse loans.
Factors To Consider before Taking a Loan from Private Lenders in Nigeria
While private lenders can offer significant advantages, it’s essential to conduct thorough research and due diligence to find a lender that aligns with your startup’s goals and financial needs.
Ensure the lender is legally registered and operates within the regulatory framework of Nigeria and confirm that the interest rate charged is within the legal limits set by the Central Bank of Nigeria (CBN). Be careful of lenders charging high interest rates or engaging in illegal practices.
Make sure you understand the repayment terms, including the frequency of payments, the total amount to be repaid, and any penalties for late payments.
Also, determine if the lender requires collateral and, if so, assess the potential risks involved and be aware of any hidden fees or charges that may be included in the loan agreement.
Conclusion
Borrowing from private lenders in Nigeria is time saving and cost effective but make sure you access the risks and genuineness of the lenders to avoid being caught in a web of fraudulent activities.
FAQs
How to get an urgent loan in Nigeria without collateral
If you need an urgent loan that doesn’t require collateral, you should consider getting from a Fintech company that gives loan. All you need to do is to apply on their app and get credited in minutes.
Who is SukFin?
SukFin is a platform that links those in need of business funding to loan companies.
