With over 70 years of experience in the banking sector, a presence in more than twenty countries, and still counting, United Bank for Africa (UBA) is undoubtedly one of Africa’s ruling financial services institutions.
The bank has earned a spot alongside Access Bank, Guaranty Trust Bank, First Bank, and Zenith Bank to become part of the tier-1 banks in Nigeria.
In addition to this, the United Bank for Africa offers a wide variety of services ranging from corporate banking, retail banking, commercial banking, and SME banking.
However, I am concerned about the loan aspect of the bank, and I am glad to announce to you that UBA has numerous business loans and finance products on offer.
Interestingly, there is something for everyone whether as a large or small company or as an individual, you are sure to find an option that will suit you.
In this article, I will educate you on all you need to know about United Bank for Africa loans – various types of loans available, how to apply as well as frequently asked questions about UBA loans.
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Various Types Of Loans In United Bank for Africa
Now, I will be talking about the different types of available loans in the United Bank of Africa.
There are quite a number of them, and I am sure that before I am done with this section, you will find the option that befits your needs.
1. Temporary Overdraft
A temporary overdraft is simply a type of UBA loan whereby businesses are loaned additional cash in case an emergency need for money arises.
Also, it is a short-term credit facility where you are given the opportunity to borrow funds for up to 30 days, and you are required to pay interest based on the monies borrowed.
2. Invoice Discounting Facility (IDF)
You may want to consider UBA’s invoice discounting facility if you operate a business that often has unpaid invoices.
The way it works is that you will be given a cash advance but you need to present an invoice that is verifiable.
However, there will be a discount for any money released that is to say that you will get a percentage of the total invoices value.
3. Young Entrepreneur Finance Scheme
Are you a young African entrepreneur who needs a loan?
The United Bank of Africa has created this scheme to offer credit facilities to young African entrepreneurs.
Nevertheless, you must be willing to pitch your ideas to UBA alongside other partner financial institutions that are willing to support you and bring your business ideas to life.
You know that this means that you must have a very strong and bankable business idea.
4. UBA Medical Loan
Just as the name implies, this loan is tailor-made to support businesses that are functioning in the healthcare sector.
Such healthcare businesses that are qualified for this loan include diagnostic centers, medical laboratories, hospitals, opticians, dental clinics, and pharmacies.
They can be funded either in the form of a term loan or by the way of asset financing.
AGSMEIS is an acronym that represents Agri-Business Small and Medium Enterprise Investment Scheme.
All thanks to the Central Bank Of Nigeria for designing this initiative in a bid to render support to agricultural businesses, and also other micro, small, and medium-sized enterprises generally called MSMEs.
The sum of up to N10 million can be borrowed, for a duration of 7 years, at an interest rate of 5% yearly.
6. Trade Finance
United Bank Of Africa connects importers, exporters, and trading companies from Nigeria to international markets, offering them help by providing trade finance solutions.
Furthermore, you will be given letters of credit and LC discounting finance.
7. UBA School Loans
The essence of this loan facility is to meet the financial requirements of private schools.
Private schools could need the money for a wide range of purposes which includes asset acquisition, buying/developing property, and working capital.
8. Development Bank of Nigeria
The Development Bank of Nigeria (DBN) provides support to MSMEs to use in developing and growing their businesses through some banks that participate in the program, UBA is one of such banks.
You can be given up to 10 years to pay back the loan, however, this depends on the kind of business you do.
Worthy of note is the fact that interest rates are flexible.
9. UBA Creative Industry Finance
This is yet another UBA loan supported by the Central Bank of Nigeria (CBN) for people who are into businesses like ICT, fashion, music, and movies.
You can be given a business loan of up to the amount of N500 million, at an interest rate of 9% yearly, and you have 10 years to pay back the money.
How To Qualify For A United Bank For Africa Business Loan
By now, you already know that UBA Bank has various funding options as I have explained most of them to you.
Their loan options range from receivables finance to business overdrafts, more so, they have funding targeted to help certain sub-sectors of the economy such as agriculture.
That being said, each of these loan options has terms and conditions specific to them.
This implies that irrespective of the loan option you want to settle for, there are certain requirements you are expected to meet.
Generally speaking, for your business to be qualified for funding, it must present proof of regular income.
Also, it will be an additional advantage if you have a profitable business and a good credit history.
Furthermore, I have listed other general business lending criteria below, however, note that some of them may not always be applicable to you, they include:
- Your business or company must be registered with the Corporate Affairs Commission (CAC)
- You must possess a good Credit Bureau Report that has no bad debt
or unpaid obligations.
- You must have been in a business for some period of time (maximum of 1-3 years)
- You must have a business or corporate bank account
- You must be an active customer of the bank
It is true that your business has to be registered before you can consider it qualified to apply for a UBA business loan, nevertheless, if your business isn’t registered, don’t fret, there are available options for unregistered businesses.
In addition to this, the United Bank Of Africa offers personal loan products and salary advances, that may be channeled into business in some cases.
How To Apply For A United Bank For Africa Loan
To apply for a UBA business loan, there are certain methods you have to follow.
You can apply through phone calls, email, or visit any of the UBA bank branches that suit you.
Some loan products also accommodate online applications.
Note that, no matter your medium of application, your loan request must be subjected to evaluation against UBA lending guidelines.
This involves accessing your business, thoroughly including your aim of taking the loan taken before the bank decides whether to approve it or not.
If you meet the terms mapped out for approval, your request will be approved and funds will be released to you.
Below is a checklist of what may be required of you as part of any application process, and they include:
- Completed application form
- Bank statements (1 year)
- Certificate of Incorporation
- Business plan
- Proof of address
- Company profile
- Audited financial accounts
- Cash flow budget
- Valid means of identification (voters card, passport, driving license)
- Details of collateral offered (if any)
Please expect that you may be asked to provide more documents aside from the ones I have mentioned or even, less documentation may be requested.
Everything lies in the loan option you apply for and the size of your business.
For example, more extensive corporate organizations may be asked to provide a tax clearance receipt.
Frequently Asked Questions (FAQs)
1. How long will it take before receiving funds from United Bank for Africa?
There are application processes specific to each loan package.
If you want to hasten the process, then you have to try your best to present all necessary documents and even more information that will be useful for this process at the application stage.
2. How long do I have to pay back a United Bank for Africa loan?
This depends on the credit facility in question.
In the case of the United Bank For Africa, they have both short and long-term loan and funding options.
3. How much can I borrow from United Bank for Africa?
The way it works is that the more the worth of your business increases (the money it already generates), the more money you can borrow from the bank.
In addition to this, good credit history can also play a great role in approving your load, it can encourage the bank to loan more money to you.
4. What is the interest rate charged on a United Bank for Africa loan?
Please note that the interest rate is not constant.
In as much as UBA can expend loans from its own ledger directly, it also provides funding on behalf of government-affiliated organizations like the DBN and CBN.
Also, note that the interest rates tied to schemes sponsored by the government are usually lower — sometimes it could be as low as 5%.
5. Does United Bank for Africa require collateral?
United Bank Of Africa just like most banks requires that you present collateral on some of its loan products, especially when the amount you’re requesting is huge.
If you are requesting relatively small amounts of money, you can be given a loan without collateral.
Below are some of the forms that can be accepted by UBA when collateral or security is required:
- Other non-government debt instruments
- Third-party guarantors (or collateral)
- Other non-government debt instruments
- Obligations of state governments or agencies of the Federal Government of Nigeria
- Physical assets e.g. real property
- Obligations of the Federal Government of Nigeria (FGN Bonds, FGN Eurobonds, FGN Treasury Bills, and so on)
In conclusion, I believe I’ve exhausted all that you ought to know about applying for loans at the United Bank Of Africa.
I wish you the best of luck and congratulations in advance on the approval of your loan.