First bank Financing options: SMEs Loan for business expand and growth

Last Updated on July 1, 2024 by admin

As a small business owner, you now have more financing options than ever before if you are seeking financing to operate or expand your small business. First bank customers can now apply for more Financing options to support their family holiday trip,buy or construct a home or purchase a dream card without exhausting life time savings.

The financing options from First bank is to provide capital to businesses, consumers, and investors to help them achieve their goals.The use of financing is vital in any economic system, as it allows business owners to purchase products out of their immediate reach.

Here are list of First bank financing options

1. Secured Overdraft
2. Secured Term Loans
3.Contract Finance
4.SME Products Financing
5.Local Purchase Orders Finance
6.Operational Vehicles
7.FirstEdu Loan
8.Revenue Loans and Overdraft
9.Commercial Mortgage
10.Health Finance Product Guideline
11.Health Finance
12.First Trader Solutions (FTS)

1. First bank Secured Overdraft:

First Bank Secured Overdraft is a credit facility designed to provide working capital to small and medium-scale businesses with an annual turnover of ₦500 million and below. It allows businesses to overdraw their current account up to an agreed limit, providing them with the flexibility to meet their short-term financial obligations.

Key Features:

• Loan Amount: From ₦20 million and above.
• Maximum Tenor: 12 months.
• Collateral: Legal mortgage over property in FirstBank acceptable locations or Treasury Bills/Fixed Term Deposit.

Eligibility:

To be eligible for First Bank Secured Overdraft, your business must meet the following criteria:

• Have an annual turnover of ₦500 million or below.
• Maintain a satisfactory banking relationship with FirstBank.
• Provide acceptable collateral (legal mortgage over property or Treasury Bills/Fixed Term Deposit).
• Have a viable business plan and a good credit history.

Benefits:

• Flexibility: Access to funds on demand to meet working capital needs.
• Interest Paid on Drawn Portion Only: You only pay interest on the amount you actually use.
• Improved Cash Flow Management: Helps businesses manage their cash flow effectively.
• Competitive Interest Rates: Offers competitive interest rates compared to other credit facilities.

Requirement for First bank secured overdraft

1. Application letter.
2. Duly completed Retail Loan Application Form.
3. Proforma Invoice from FirstBank approved vendors.
4. Company Profile.
5. Current ultility bill.
6. Latest audited account.
7. Six (6) months Bank statement.
8. Other KYC requirementsfor opening a corporate account.

How to apply for First bank secured overdraft

To apply for the Secured Overdraft Loan, Download the Retail Loan Application Form and
Complete the form and with the accompanying documents, submit at the nearest FirstBank branch.

2. First bank Contract Finance:

Requirements for First bank Contract Finance

1. Customer’s application letter.
2. Letter from Employer confirming the Invoice and stating details / time of payment.
4. Valid means of identification (National ID, International passport or Drver’s License) of prime mover or 2 of the company directors for limited liability companies.
5. Six (6) months statement of account.
6.LPO supply paper.
7. Letter of domiciliation of contract payment from Employer Company.

How to apply for First bank Contract Finance

To Apply for a Contract Finance, Download the Retail Loan Application Form
and Complete the form and submit to the Retail Team at the nearest FirstBank branch

3. First bank Secured Term Loans

First Bank Secured Term Loans are designed to provide medium to long-term financing for small and medium-scale businesses in Nigeria. These loans are secured by collateral, typically in the form of real estate or government securities, which reduces the risk for the bank and often leads to lower interest rates.

Key Features:

• Loan Amount: Varies depending on the business’s cash flow and collateral value.
• Tenure: Flexible repayment periods tailored to the business’s needs and cash flow.
• Interest Rate: Competitive interest rates, potentially lower due to the secured nature of the loan.
• Collateral: Requires collateral in the form of real estate or government securities.

Eligibility Criteria:

To be eligible for First Bank Secured Term Loans, your business must meet the following requirements:

• Business Type: Small and medium-scale businesses with an annual turnover of ₦500 million or below.
• Registration: The business must be duly registered with the Corporate Affairs Commission (CAC).
• Business Age: The business must have been in operation for at least 36 months.
• Account Relationship: A 6-month account relationship with FirstBank or another reputable bank is required.
• Account Operation: The account must be operated satisfactorily without a history of returned cheques or defaults on previous loans.

Benefits:

• Access to Capital: Provides businesses with the necessary funds for expansion, equipment purchase, or working capital.
• Lower Interest Rates: Secured loans often have lower interest rates compared to unsecured loans.
• Flexible Repayment: Repayment terms can be tailored to the business’s cash flow.
• Improved Creditworthiness: Timely repayment of secured loans can help improve the business’s creditworthiness.

Requirements to apply for First bank secured term loans

1. Application letter.
2. Duly completed Retail Loan Application Form.
3. Proforma Invoice from FirstBank approved vendors.
4. Company Profile.
5. Current utility bill.
6. Latest Audited Account.
7. Six (6) months Bank statement.
8. Other KYC requirements for opening a corporate account.

4. First bank SME Products Financing

First Bank of Nigeria offers a wide range of SME Products Financing options designed to cater to the diverse needs of small and medium-scale enterprises (SMEs). These financial solutions are tailored to support various aspects of business operations, from working capital to asset acquisition and expansion.

Types of SME Products Financing Offered by First Bank:

1. Import Finance: This facility helps SMEs finance the importation of goods and raw materials required for their business operations.
2. Oil and Gas Contract Finance: Specifically designed for businesses in the oil and gas sector, this financing option supports contract execution and working capital needs.
3. Cement Distributorship Finance: This is a specialized financing solution for cement distributors to manage their inventory and working capital requirements.
4. Invoice Discounting Finance: Helps businesses unlock cash flow from unpaid invoices by selling them to the bank at a discount.
5. Bonds & Guarantee: First Bank provides various types of bonds and guarantees to support SMEs in securing contracts and fulfilling performance obligations.
6. Telecommunications Distributorship Finance: This facility is designed to support telecommunications distributors in managing their inventory and sales operations.
7. Petroleum Dealership Finance: A working capital finance solution for petrol stations to purchase petroleum products.
8. FMCG Key Distributorship Finance: This structured finance product helps fast-moving consumer goods (FMCG) distributors meet their working capital needs.
9. Secured Term Loans: These loans are designed to finance capital projects, such as acquiring new technology, replacing assets, or expanding operations.
10. Operational Vehicles Finance: Provides financial support to SMEs for acquiring new vehicles necessary for their business operations.
11. Secured Overdraft: This facility allows businesses to overdraw their current account up to an agreed limit, providing them with short-term working capital.
12. Commercial Mortgage: Helps businesses purchase or refinance commercial properties.
13. Local Purchase Order Finance: Provides funding to local businesses to execute purchase orders from reputable companies.
14. First Trader Solution (FTS): A comprehensive solution that combines banking and value-added services to support traders and businesses in the retail and wholesale sectors.

How to Apply:

You can apply for First Bank SME Products Financing through the following channels:

• Visit your nearest FirstBank branch.

5. FirstEdu Loan

FirstEdu Loan is a financial product offered by First Bank of Nigeria to private schools to cater to their financial needs. It aims to support the smooth running and expansion of private pre-primary, primary, secondary, and A-level educational institutions.

• Purpose:
  • Working capital for day-to-day school operations.
  • Purchase of school buses and other operational vehicles.
  • Acquisition of solar panels for power supply.
  • Asset acquisition of up to ₦25 million for 24 months.

Eligibility:

• Private schools duly registered with the Corporate Affairs Commission (CAC).
• A minimum of 6 months account relationship with FirstBank or another reputable bank.

How to Apply:

1. Visit the nearest FirstBank branch.
2. Request for the FirstEdu Loan application form.
3. Fill out the form and submit it along with the required documents.

Features of FirstEdu Loan

1. Available to all private schools duly registered with CAC (either Government approved or not).
2. Tenor is from 90 days to 12 months (terms and conditions apply).
3.Maximum Loan amount is N20m.
4. Schools with CAC registration but without Ministry of Education approval can access up to N2million for 90 days.
5. Finance of operational vehicles for schools (new and fairly used)
6. Asset acquisition of up to N20m for 24 months.
7. Collateral is undertaking to domicile school fees with FirstBank.
8. School must have been in account relationship with any bank for a minimum of 12 months.
9. School must have a minimum student population of 100.

Documents Required for FirstEdu Loan

1. Evidence of Government Approval of school.
2. School Memorandum and Articles of Association (MEMART) where applicable.
3. Documents showing how long school has been in the business.
4. Documents showing the number of students in the school.
5. Any other documents that may be required by the bank.

Who Can Apply FirstEdu Loan

1. Schools with CAC registration but without Ministry of Education approval can access up to N2million for 90days.
2. Private pre-primary, primary, secondary schools, A’ level Tuition Providers registered with both State Ministry of Education and Corporate Affairs Commission.

6.First bank  Local Purchase Orders Finance

This loan facility is designed to provide short term financing to small and medium scale retail customers with annual turnover of N500 million and below facility to carry out supply orders.

Features

1. LPO finance is subject to a maximum tenor of 90 days with the option of 60 days renewal after the expiry of the facilities Loan Amount does not exceed 70% of cost of supply.

2. Irrevocable Tripartite domiciliation of agreement in respect of Contract proceeds executed by beneficiary company, FirstBank and the employer company.
3. The employing company must be on the FirstBank list of Principals.

Required Documents First bank  Local Purchase Orders Finance

1. Contract Papers issued by the company awarding the contract.
2. Bill of Quantity for the contract to be executed.
3. Evidence of previous similar contract(s) executed by Contractor.
4. Evidence of relevant government agency approval for contract.
5. Any other documents that may be required by the bank.

7. Operational Vehicles financing

This kind of credit facility is designed for financing the purchase of new vehicles for the day-to-day running of your business.

Features

1. Maximum loan amount of N10 million.
2. Maximum tenor of 36 months.
3. Minimum equity of 30%.
4. Vehicle must be purchased from a FirstBank approved vendor.
5. Insurance policy on the vehicle.

Required Documents for First bank Operational Vehicles financing

1. Application letter.
2. Duly completed Retail Loan Application Form.
3. Proforma Invoice from FirstBank approved vendors.
4. Company Profile.
5. Current utility bill.
6. Latest Audited Account.
7. Six (6) Months Bank Statement.
8. Other KYC requirements for opening a corporate account.

8. First bank Commercial Mortgage

The first bank Commercial Mortgage empowers small and medium scale enterprises to finance the acquisition of landed property for commercial purposes.

Features

1. Applicants must have been in their line of business for at least 5 years
2. Account relationship with FirstBank must be for at least 6 months.
3. Source of repayment is from business sales proceeds (not rent)
4. Key Man Mortgage Protection Assurance + Comprehensive Insurance against Fire, Earthquake and Tornado (FET)
4. Terms & Conditions apply.

Required Documents to apply for First bank Commercial Mortgage

1. Building Plan approved by the relevant authorities
2. Valuation Report to be obtained for property to be financed
3. Offer Letter from developer in cases of outright purchase
4. Audited financial statements of the company
5. Any other documents that may be required by the bank.

9. First bank Health Finance

The credit is targeted at registered pharmacies, private hospitals and other health care service providers for the purpose of financing working capital, stocking of drugs and medical supplies, as well as purchase of hospitals’ medical equipment.

Features

1. Tenor is 180days for working capital and 3 years for asset finance.
2. Pharmacies must be within 5 km from the requesting branch
3. Daily charged savings of 0.5% for pharmacy credit facility
4. Hospitals have no distance limitation or Charged savings, but loan must be secured with HMO domiciliation
5. Interest rate is competitive
6. No collateral is required for all working capital loan.

Benefits

1. Provides access to funding at competitive rate and flexible term.
2. Provides equipment financing and opportunity for business expansion.
3. Steady buildup of funds which enables efficient management of cash flow.
4. No collateral required for working capital loan.

10. First bank First Trader Solutions

The FirstTrader Solution is a short-term overdraft facility offered to traders in pre-approved market locations and supermarkets who deal in fast moving goods. It comes in two variants; the Main FTS (180-day variant) and the Exceptional FTS (90-day variant).

Features

1. Available to traders that deal in fast-moving goods
2. Tenor is either 90 days or 180 days.
3. Minimum loan amount is N5 Million.
4. No collateral is required for the 90 days variant
5. Collateral for the 180 days variant shall be equitable mortgage on shop title documents to cover 200% of the facility amount.
6. Requires opening of a charged Savings Account with opening amount of 5% of the 7.facility amount. There will also be subsequent deposits as shown below:
0.5% of the loan amount daily throughout the tenor of the 180 days facility.
1% of the loan amount daily throughout the tenor of the 90 days facility.

Benefits

1. Provides opportunity for increased business turnover/volume through injection of additional funds.
2. Steady build-up of funds which can be used to either pay back the loan or ploughed back into the business upon liquidation of facility
3. Easy repayment plan
4. No tangible collateral required.