Many small and medium scale business owners have many challenges in accessing loans from commercial banks. In its radio programme, smedigest on Inspiration 92.3 FM, Access Bank Plc outlines briefly the what it takes for SMEs to access business loans from the bank. The bank’s Group Head, Emerging Businesses, Mrs Ayo Olojede, and her colleagues, Olakunle Ajilabu and Tamunotonye Onianwah, fielded questions.
We have equity financing and debt financing. Equity financing is where the business owner gives up some part of his/ her ownership of the business to an investor in exchange for money or expertise. The investor loses money when the business loses money, and makes money when the business makes money. A lot of SMEs operators don’t like to give up a share of their business ownership to an investor. They would rather own the entire 100% of the business but they want to take a loan from the bank.
These are just the basics of our 5-Cs of credit. But one thing you must also note is that, when you are strong in some of the Cs, Access Bank can work with you to help you achieve the others. For instance, when you have four of the Cs and you don’t have collateral, Access Bank has an opinion to help you access loan without collateral. This option requires that the business generates the cash flow that can repay the loan.