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The untold stories of the struggles in start-up businesses lay in the mouths of business owners. The major problem that small to medium-sized enterprises (SMEs) face is money for expansion. Naturally, cash flow enables them to make prompt financial decisions. But when they do not have this financial backup, their plans fall through. However, you can’t undermine their amazing goals to become the big guns in the market. And this is what business owners can achieve with SME loans in Ghana.

In this article, you’ll know more about SME loans in Ghana, requirements, how to apply and so on.

About SME loans in Ghana

SME means Small Medium Enterprises. SME loans in Ghana are business loans available to medium-sized enterprises in Ghana. Most microfinance and commercial banks in Ghana offer SME loans to businesses. Sometimes, you might not need collateral to secure an SME loan even with no waste of time.

They designed it to fit into the needs and requirements of small and medium enterprises. Also, it is the funding of small and medium-sized enterprises, and represents a major role of the general business finance market. Especially in which they gain, supply, capital and price from different firms. 

However, SME loans are usually for those who are planning to start their own businesses to make a progressive impact on the industry and society. 

What are the requirements for an SME loan in Ghana?

In order to qualify for any type of loan, be it a personal loan to meet your personal needs or business loan to expand your business. You must meet some requirements.

The following are the requirements you need to qualify for an SME loan in Ghana:

1. Your personal/business bank account details

2. Existing loan details

3. Parent business/company/associates/group entity details

4. Annual accounting report of your business 

5. Personal guarantee letters from directors/ partners/ promoters

6. Business registration certificate/documents

7. Registration certificate of business as SME

8. A copy of sales tax returns filing documents

9. A copy of income tax returns filing documents

10. Any sector-specific licenses, such as drug licenses with a pharmaceutical enterprise.

How can I apply for an SME loan in Ghana?

You must apply for a loan before you can get it. Just like every other form of loan. You can:

1. Visit the website of your lender, fill up the online application form of SME/ MSME loan to apply. Submit all the documents they will require completing the process.

2. Go to any of their branches and request the SME loan you need.

What is the interest rate on SME loan Ghana?

Different lenders in Ghana offer SME loans for different interest rates. Interest. The interest rate may vary depending on the loan scheme you want and the financial institution involved. The lender usually considers factors like tenure, collateral provision, repayment option, loan amount, tenure, and the applicant’s creditworthiness.

What are the benefits of an SME loan in Ghana?

You stand to gain the following from SME loan in Ghana:

1. SME loans include flexible repayment tenures ranging from one year to five months.
2. Most times they do not require collateral to avail SME loans.
3. Quick and easy online application process with shorter approval time.
4. Documentation requirements are minimal.

What is the use of an SME loan in Ghana?

The purpose or use of the loan must be to meet business requirements and growth. They include purchasing raw materials or machinery, availing working capital, marketing products/services. Also, expanding the employee product line or base, entering a new geographic location, and so on.

Is there any specific age for SME loan applicants in Ghana?

The SME loan applicant must be between 25 years and 55 years.

Is there any required experience and proof?

You must have a minimum of three years business experience and past years’ business return.

What are types of SME loans in Ghana?

1. Line of Credit

A Line of credit is a type of business loan whereby the lender will approve a credit limit for your business. You can take a loan up to the maximum limit as per your requirements. They will require you to repay the amount you used while repaying the loan. It is very essential for micro-businesses that have seasonal demands. 

2. Unsecured business loan

In this type of loan, you pledge nothing against the loan amount. The lender is to carry a higher level of risk with such loans. Also, they are more expensive than secured loans.

An unsecured business loan can be very helpful to small enterprises operating from a rented property. 

3. Secured business loan

This is the type of SME loan where you offer an asset against the loan amount. These are big-ticket loans, which come with flexible loan terms and repayment options.

4. Working capital loan

These are short-term loans used for managing expenses of day-to-day business operations. From paying rent of your commercial property to the purchase of monthly business supplies, we can use a working capital loan in different ways. Every size of SME can consider this loan for a regular flow of money for business growth.

5. Business Term Loan

This is a term loan, often called an installment loan. It is a traditional type of business loan in which the borrower receives a specific amount of money to pay back on a set schedule.

Typically, you repay loan term payments each month, but the pay schedule usually varies depending on the policies of the lender. They will apply for each payment toward the principal, or the balance of the loan. Also, to the interest charged by the lender.

Conclusion 

Business owners typically enjoy the growth of their businesses. This joy isn’t just for the fun of it, but for peace and more disposable income that comes with it. All SME owners owe themselves one good, which is to take full advantage of the SME loans available to them. With these loans, they can expand their businesses. Consequently, these businesses will yield more interests. 

However, after getting this loan, ensure you use them judiciously so that you’ll have a better opportunity to repay it timely. This is because prompt repayment of loans boosts your credit score and will ultimately make the credit bureaus recognize your good financial habit.

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Companies use some parameters to assess the quality of their current operating activities. And some of those parameters are the liquidity ratios. They help companies to know their ability to cover short-term liabilities on time. This is because of emergency situations that could pop-up at any moment. So, as companies in the market, the knowledge of their liquidity ratios is paramount.

As you read along, you’ll learn more about liquidity ratios, their examples, and so on.

What are Liquidity Ratios?

Liquidity ratios are the ratios companies use to measure the ability of a company to meet their short-term debt obligations. With these ratios, companies can measure their ability to pay off short-term liabilities when they fall due. Besides that, liquidity ratios help companies to determine a debtor’s ability to pay off current debt obligations without raising external capital.

Liquid ratios help to measure the level of cash or assets that a company or individual could quickly convert into cash. And these assets help them meet their financial obligations.

How do liquidity ratios work?

Having seen the meaning of liquidity ratios, you would need to understand how it really works.

Now, liquidity is the ability of companies to convert assets into cash quickly and cheaply. And when they use them in comparative form, liquidity ratios become most useful. Therefore, this analysis (comparison of the liquidity ratios) may be internal or external.

Internal Analysis involves the use of multiple accounting periods they reported using the same accounting methods. When analysts compare previous periods to current operations, it allows them to track changes in the business. Then again, a higher liquidity shows a company is more liquid (easy to sell or convert into cash with no loss in its value). Consequently implying that the company has better coverage of outstanding debts.

Alternatively, External Analysis involves comparison of the liquidity ratios of one company to another or an entire industry. This information is useful for companies to compare their strategic positioning in relation to their competitors when they are establishing benchmark goals. However, liquidity ratio analysis may not be very much effective when looking across industries. This is because various businesses require different financing structures. Therefore, this analysis is less effective for comparing businesses of different sizes that are in different geographical locations.

What are types of liquidity ratios?

Having known the meaning of liquidity ratios, let’s look at their types. Liquidity ratios have three (3) common types, namely; current ratio, quick ratio and operating cash flow ratio 

The following are types of liquidity ratios:

1. Current ratio

Current ratio helps to determine an organisation or individual’s ability to pay their short- and long-term debts. It helps to compare their total assets, both liquid and fixed, to their total debt.

2. Quick ratios

The quick ratio assesses an organisation’s most liquid assets (excluding inventories from the calculation). Besides that, it shows an organisation’s or individual’s ability to pay their short-term debts.

3. Operating cash flow ratio

Operating cash flow ratio helps to measure the ability of organisations or individuals to cover their current liabilities. These current liabilities could be due within one year. So they can cover their current liabilities using the cash they generated by their current operations.

What could happen if ratios show a company is not liquid?

‘Liquid’ is the state of being in a position where you have sufficient cash on hand to carry out all necessary financial obligations. In other words, liquidity in companies refers to the ease with which they can convert their asset, or security, into ready cash without affecting its market price. So, cash is the most liquid of assets. Whereas tangible items are less liquid.

However, a liquidity crisis can arise even at healthy companies. Especially if circumstances arise that make it difficult to repay their loans and pay their employees or suppliers. Therefore, if they cannot find new financing. The company would need to liquidate assets in a fire sale or seek bankruptcy protection.

Conclusion

In the end, the higher the liquidity ratios, the lower the credit risk (a company’s risk of default). This ratio is therefore crucial for lenders, especially when they’re evaluating potential loan clients. Companies meet their debts and even invest more when they are financially buoyant. Therefore, with the knowledge of liquidity ratios, companies will make the right financial decisions.

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Customers need a credit note to know that their supplier has credited them with a specific amount. Transactions practically sustained the world of business between two parties: the customer and the merchant. As a result, for a transaction to succeed, these two parties must communicate and reach out to one another. This note, in particular, is one mechanism by which they send messages. Under some conditions, which are covered in the latter portion of this article, a credit note serves as a communication from the seller to the buyer.

What is a credit note?

A credit note is a document that a supplier sends to a client to inform them they have been credited with a specified amount. However, while there may be other factors at play, this is almost entirely because of an error in the original invoice. In essence, it informs the customer that credit is being extended or applied to them for specific reasons. They also refer to a credit memo, which is a short version of a credit memorandum as a credit note.

This note usually contains a variety of information, such as the products it affects, their quantities, and previously agreed-upon prices. It also refers to the relevant invoice and expresses the rationale for the credit note in a form that the consumer understands. Finally, a credit note could cause the client receiving a cash return or just deducting the amount from future transactions. Depending on the agreement in existence, the customer or the provider may choose.

When is a credit note used?

We use it in the following scenarios:

1. When a customer returns a good or rejects a service because of a variety of factors.
2. Receiving goods that have been damaged previously, usually during transit.
3. On the original goods invoice, there was an error in the price listing.
4. On the original invoice, a customer overpays.

What do they include on a credit note?

Normally, the provider is the one who creates it and selects what information to include. Aside from the basic specifics of products, quantities, and service costs, there are some requirements to follow. It’s best to include the following information for record-keeping purposes:

1. The date they issued the credit note.
2. Contact information, including firm name, VAT number, billing or shipping address, and any additional information you think is necessary.
3. The credit note number allows you to track it in your system. Besides that, link this number to the invoice number for better matching and tracking.
4. Payment terms specifying whether they prefer a discount on future orders or a cash return.
5. Also, know that if the original invoice includes VAT, you’ll need to issue a reciprocal VAT credit note. This should include the invoice’s data and the cost of the item before VAT. Furthermore, you must clearly state at the top of the note that the document issued is a credit note rather than an invoice. This is because their appearances may be similar, which could lead to a misunderstanding between the two parties.

Conclusion

A credit note makes it simple to track and correct inaccuracies in invoices that violate the terms of the agreement. When issuing, however, it is critical that you do so correctly. To avoid misunderstanding, supply all necessary information.

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The need for a loan without regard to bad credit is paramount when you are short of cash. There are instant mobile loans various lenders offer in Ghana. They can provide help when facing a financial crisis that needs immediate attention.

Even though many Ghanaian banks can lend you some cash, getting financing can frustrate and lengthy most of the time. Although you have little chance of obtaining a loan, there are still some benefits. Meanwhile, instant mobile loans in Ghana are here to save the day. Some individuals secure emergency loans through instant mobile loans in Ghana. In order to help customers survive until payday, which will allow them to loan some money. Contained in this article is the meaning of an instant mobile loan and how it works.

What is an instant mobile loan?

With instant mobile loans, you can borrow money quickly, regardless of your FICO credit score. The loan amount varies with the credit score. Also, it is a loan which rarely requires collateral.

How does instant mobile loans work?

There are several instant mobile loans available in Ghana. There is also a repayment option, the amount you wish to borrow, interest rate, etc. in the application. If you are dealing with a lender, expect to provide their personal details, email, debts, Social Security number, and bank account information. Lenders usually reply within minutes and disburse funds into your account as soon as they approve you.

What is the minimum and maximum amount for instant mobile loans?

Since instant loans are emergency loans with no collateral, they are usually low-value loans.

How long does it take to disburse an instant mobile loan in Ghana?

It may take several hours or up to a few days to apply for loans. Most of the time, it may be quicker than that. Since the lender might need to review your online application before depositing money into your account. However, they need to make a final decision on how to proceed. If the lender needs more information from you, then the lender will only delay the disbursement of your money.

You might not receive your funds until the next business day if you apply after a certain time of the day. There is a possibility that you could need to wait longer if the lender wants more information from you.

What is the interest rate for instant mobile loans in Ghana?

Cash advances and payday loans are the most common instant mobile loans in Ghana, which typically come with high interest rates. Instant mobile loans in Ghana carry interest rates based on the amount of the loan and financial institution. Interest rates are normally between 5% and 10%.

Can someone get an instant mobile loan with bad credit?

Low credit score customers are more likely to take out an instant loan. In addition, many of these financial institutions might not check your credit score or your credit history.

What is the repayment for instant mobile loans?

Many or even all instant loans are short-term loans. Possibly, you will need to pay back your loan at the earliest potential opportunity. In the next two to three weeks, for example, or after your next payday. However, this gives you no opportunity to prepare the finances for repayment.

What are the alternatives to instant mobile loans in Ghana?

An instant mobile loan in Ghana, the interest rates and the short-term nature are high. So it may be wise to use them only last resort. You can consider the below alternatives if you need financial support for pressing needs.

• People with bad credit are likely to get personal loans from most Ghana lenders. If you need a loan to pay back for a long period, you may do better with a personal loan.
• A payday alternative loan is a sure method of borrowing at federal credit unions, where they offer small loans.
• You may borrow money against your existing credit card balance if you already have an active credit card. If that’s the case, you’ll want to review the terms on your credit card. Usually, a cash advance will have a higher rate of interest than an instant loan.

Conclusion

When you are looking for easy and convenient financing options, instant mobile loans are usually short-term loans you can apply for. If you are in the market for a personal loan, it is important to know how they work, whether you are eligible, and the repayment options available. It is possible to borrow a limited amount of money from an instant mobile loan in Ghana. However, interest rates can be high.

You can always get a quick loan when an emergency occurs when you don’t have any source of cash flow or savings to rely upon. 

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No business can exist without funds, be it a small startup business or SME. Funds help business owners to deliver their products and services efficiently. And this cuts across the various resources, especially human resources, in order to foster service delivery of the business. This is because you must pay your workers adequately and have necessary equipment to ensure a standardized delivery of products and services. Therefore, this more or less opens the spot where debt financing dwells in businesses.

As you read along, you’ll learn more about debt financing, how it works, types, etc.

What is Debt Financing?

When a company raises money by selling debt instruments is termed debt financing. Especially as bank loans or bonds. They usually refer to this type of financing as financial leverage. Moreover, loans from family and friends, government loans. Also, lines of credit, credit cards, mortgages and equipment loans are all forms of it.

How Debt Financing Works

Let’s see how debt financing really works in companies. There are three ways a company that needs money can get financing. They can do so by; selling equity, taking on debt, or using a combination of the two.

Equity is an ownership stake in the company. As a shareholder of a company, equity gives you a claim on future earnings. But they do not need to pay the equity back to you. If the company goes bankrupt, you and other equity holders are the last in line to receive money.

A company can subscribe to selling fixed income products, such as bonds, bills, or notes as debt financing. They can sell them to investors to get the capital they need to grow and expand their operations. Investors who usually purchase bonds from companies are lenders who could either be institutional or retail investors. Thereby providing the company with debt financing.

They require the company to repay the amount of the investment loan (principal) in the future on a date they agree. But if the company goes bankrupt, the lenders will have a higher claim on any liquidated asset than shareholders.

What Are Types of Debt Financing?

It is important to know types of debt financing that exist. You’d never know if you could one day need it for your business. 

The following are its types:

1. Revolving loans

Revolving loans grant access to an ongoing line of credit a borrower can use, repay, and repeat. The example of a revolving loan is credit.

2. Installment loans

Installment loans can be secured or unsecured. They usually have set repayment terms and monthly payments. They can also receive the loan amount as a lump sum payment upfront.

3. Cash flow loans

This type of loan provides a lump-sum payment from the lender. As the borrower earns the revenue used to secure the loan, he or she then repays the loan. Examples of cash flow loans are; merchant cash advances and invoice financing.

What are the advantages of debt financing?

The following are the advantages:

1. A business can leverage on a small amount of capital to create growth with debt financing.

2. The company will still keep all ownership control.

3. Generally, debt payments are tax deductible.

4. Debt financing is usually less costly than equity financing.

What are its disadvantages?

The following are the disadvantages:

1. It can be risky for businesses with inconsistent cash flow.

2. They must pay interest to lenders.

3. They do not consider the business revenue as you must pay the debt you owe.

Is Debt Financing a Loan?

Because of how the definition of debt financing isn’t just like that of loans. You might wonder if it’s a loan. Yes, debt financing is a loan because loans are the most common forms of debt financing.

Is it Good or Bad?

In order to be on the safer side of financial decisions, such as getting a debt financing or not. You would need to know whether it is good or bad to venture into debt financing. However, debt financing could be good and bad. This is because, if a company uses debt to grow their business, then it’s a good idea. But the company must ensure they’ll meet terms of repayment of the loans. Moreover, the cost of the capital of the company should help them decide what type of financing they should choose.

Conclusion

At some point in business dealings, debt financing could be a great option to try out. This is because it’s safer for some companies not to use their capital for other business expenses. Such as the purchase of machinery, equipment, inventory, real estate and so on. Therefore, they seek additional funds to make things work out without involving the money in their purse. So, this additional fund lets the companies invest in the resources they need in order to grow. Nevertheless, borrowers must ensure they have sufficient cash flow to pay the principal and interest that comes with it.

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Financial institutions have really helped individuals and businesses with cash flow. Individuals and businesses sometimes encounter unforeseen circumstances which could ultimately require financial attention. Because of this, individuals will probably go for an emergency loan or quick loan to meet urgent needs. While businesses could go for business loans or SME loans. This is actually why they established Masloc loans in Ghana, to help pull individuals and businesses out of financial problems.

You’ll learn more about Masloc loans, their loan requirements and much more as you read along.

About Masloc loan

Microfinance and Small Loans Centre (MASLOC) is a microfinance top body in Ghana. It has the responsibility to implement the Government of Ghana’s (GoG) microfinance programmes targeted at reducing poverty. Consequently, MASLOC provides micro and small loans for start-ups and small businesses. And this comes with accessible microcredit and small loans. In order to grow and expand their businesses in order to enhance job and wealth creation.

What are the requirements for the Masloc loan?

You must meet some requirements before you become eligible to get the loan.

The following are the requirements:

For Small Loans:

1. Photocopy of any National ID card

2. Two (2) passport pictures

3. Application letter

4. Business registration document

5. Provide a management account with two (2) years’ financial statement

6. Get an investment plan on how you will use the loan on your business (Cost, Expenses etc.)

7. Provide the document of land ownership or rental agreement document

8. Resolution letter from Board of Directors.

For Guarantors:

1. Three (3) guarantors

2. Get one (1) passport picture and photocopy of national ID

3. Get a six (6) month bank statement or three (3) months’ pay slip.

For Micro-credit or Group Loans:

1. The membership of the group or cooperative society must be between 5 and 25.

2. The members of the groups must be between 18 and 65 years and of sound mind.

3. The group must share common production or operational interest.

4. The group must have its own leaders with chairman and the Secretary. They should also have internal rules and regulations.

For Small Loans:

1. The applicants for the loan must be between 18 and 65 years and of sound mind.

2. They must have an ongoing business venture or project.

3. They must have considerable experience in business ventures or projects and sound knowledge.

4. Start-up projects or businesses that apply for the loan must be viable and capable of generating employment.

What is the minimum and maximum loan amount I can get from Masloc loans?

For this loan, the major beneficiaries are cooperative societies or groups. Whereby each group comprises 5 and a maximum of 25 members. So, in these groups, each member can access a minimum of GHC100 to a maximum of GHC1000. However, they do not consider the group to have repaid their loan until every member clears their debt.

How can I apply for the Masloc loan?

In order to get the Masloc loan, you must follow certain procedures. Do the following to apply for the Masloc loan:

1. Submit a written application to any of their District Offices near you. State the purpose of the loan and the loan amount.

2. One of their loan officers will invite you for a preliminary assessment.

3. They will advise you on best practices, such as; info about their interest rates and other information you need to know.

4. They will process your loan application immediately if you qualify for the loan.

5. However, for MFIs, MDAs, NGOs, Banks etc, they will require a business plan or proposal.

What is the interest rate for Masloc loan?

The interest rates of loans can help you decide to get a loan or not. This is because higher interest rates on loans make it very difficult for borrowers to repay the loans and the interests. However, the Masloc loan interest rate is 1% per month.

What is the loan duration?

Every borrower must ensure they know the loan duration or when they must repay the loan. Besides that, they must know if there are additional charges or not. This is because loan sharks would like to hide further details such as that when giving you a loan. However, the loans MASLOC offers are for a short period. It doesn’t exceed 12 (twelve) months. That is, you must repay the loan within 12 months plus the interest. Because of this, they do not support economic activities of long gestation periods.

What are the contact details of Masloc loan in Ghana?

For more enquiries, you can easily contact Masloc with the following details:

1. Address: Micro-Finance and Small Loans Centre (MASLOC)
2. 29 Third Circular Road, Cantonments Private Mail Bag 261 Cantonments Accra, Ghana.
3. Telephone number: +233 -0302- 782527, 0302-782528, 0302-782643
4. Call center numbers: 0302-769248; 0302 782622
5. Fax : +233 302-782532

Conclusion

It is essential to use the resources you can lay your hands on. But when there is none left, the right decision is to seek financial help from a financial institution. And this is exactly what Masloc loans can do for you or your business. However, ensure you repay every dime you borrow so that your credit score will be in an excellent condition. This is because if you don’t repay your loans, lenders won’t give you another one.

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SIC Life Savings and Loans offer most of the services other financial institutions offer their customers. And loan products are one of those services they offer. This is because individuals surely need money to get things done daily. However, is it possible to lead a decent life without money to solve your needs? Is it possible to carry out all your financial obligations with little or no money? It’s clear that these questions do not really need answers. You can also assess so many other questions regarding the importance of money. Yet, you cannot undermine the importance of money.  

Lack of money makes people get loans such as; mortgage loan, consolidation loan, mobile money loans, etc. 

As you read the rest of this article, you’ll learn more about SIC Life Savings and Loans. Besides that, you’ll see the products and services they offer here in Ghana.

About SIC Life Savings & Loans

They formerly knew SIC Life Savings and Loans as SICLife Trust Finance Limited. On July 27, 2010, the Bank of Ghana licensed SIC Life Savings & Loans Company Ltd (SICLife S & L) under the Banking Act, 2004 (Act 673). This license allows them to operate the business of a FINANCE HOUSE. On July 15, 2015, the Company received the licence to operate as a Savings and Loans. Meanwhile, SIC Life Company Limited is Ghana’s leading Life Insurance Company. And they wholly own SIC Life Savings and Loans as a subsidiary.

What are the products of SIC Life Savings & Loans?

Just like every other financial institution, SIC Life Savings & Loans have products they offer their customers.

The following are the products of SIC Life Savings & Loans Company Ltd:

1. Loans
2. Accounts
3. Money transfer services.

What are their loan products?

They offer various types of loans to prospective clients at a competitive interest rate with flexible repayment terms.

The following are SIC Life Savings & Loans (loan) products:

1. Personal Loans

They designed this product for salaried workers the opportunity to meet any pressing financial need.

Personal loan requirements:

1. One (1) passport picture
2. Copy of a valid national identification card or
3. Passport
4. Driver’s license
5. Voters identification
6. NHIS identification
7. Recent three (3) months bank statements
8. Recent three (3) months’ pay slips
9. Guarantor
10. One (1) passport picture of guarantor
11. Copy of identification card of guarantor.

2. Business Loans

They created this product for their business’ and institutional clients’ financial support to expand their businesses.

Limited Liability Company requirements:

1. One passport size picture of Directors
2. Copy of identification document of Directors which includes; passport, driver’s licence, voter ID card, NHIS card, national identification card.
3. Six months’ recent bank statement
4. Business registration documents
5. Certificate of incorporation
6. Certificate to begin business
7. The company’s code
8. Board resolution
9. Application letter for the loan
10. Guarantor
11. Picture of guarantor and copy of identification document
12. Industry and business risk analysis, company profile, management profile, analysis of credit history
13. At least get two years’ financial statement and cash flow projections
14. Stock list and inspection report (if applicable)
15. Visitation report to business and residence.

3. Fixed Income Loans

They designed this product to target the fixed income workers. Especially those of the Controller and Accountant General’s Department pay-roll month on month.

They didn’t clearly specify the requirements for this product. However, let’s move on to other products.

4. Sika Plan Loans

They created this loan product for the micro enterprises and this includes their Sika Plan customers.

Sika Plan loan requirements:

1. Get one (1) passport size picture and copy of a valid national identification card or Passport
2. Driver’s license
3. Voters identification
4. NHIS identification
5. You can also get Sika plan statement to confirm contribution
6. Your recent three months bank statement
7. A guarantor
8. A copy of identification document and picture of your guarantor.

5. Asset Finance

With this product, clients can own any product of their choice and pay overtime. They finance varieties of products, such as furniture, home office electronic appliances, generator set/plant, water pumps, audio equipment, etc.

Asset Finance requirements for individuals:

1. Get one passport size picture
2. One copy of a valid national identification card which could be; Passport, Driver’s license, Voters ID card, NHIS ID card, National ID card
3. Get a recent three to six (3-6) months bank statements
4. Also, a recent three (3) months pay slips
5. A guarantor
6. One passport size picture of your guarantor
7. A copy of your guarantor’s national ID, and
8. Utility bill.

Asset Finance requirements for business and institutions:

1. The Board/ Council resolution
2. An application letter for the facility
3. The company profile, management profile
4. Get financial statement for at least two years and cash flow projections
5. The company registration documents
6. A copy of National IDs of signatories to the bank account(s) which could be; Passport pictures of signatories of the accounts
7. The last six months’ bank statement
8. Utility bill.

Other SIC Life Savings & Loans options and their feature:

1. Scheme Loan

1. One passport picture
2. A copy of valid national identification
3. Passport
4. Driver’s license
5. Voters identification
6. NHIS identification
7. A recent three months pay slips
8. Guarantor
9. One passport picture of guarantor

2. Sole Trader Loan

1. Business registration documents
2. Certificate of registration
3. Form “A”
4. One passport size picture of the business owner
5. A copy of identification document of owner such as; passport, driver’s licence, NHIS card, national identification card, voter ID
6. A recent six months bank statement
7. Guarantor
8. A copy of identification document and picture of guarantor.

What are their account products?

SIC Life Savings and Loans offer various account products to their customers. They are:

1. Trust Abapa Susu Account

They specifically designed this account for traders, market men and women who want to save daily. Therefore, it is a saving/ Susu mobilization account which helps the people involved to make small deposits. They can even collect it at their doorsteps and deposit it into their account.

2. Trust Savings Account 

This type of account product lets your money work harder for you. This could be because it’s an individual savings account that has multiple levels of competitive interest rates. Therefore, the more you save, the more you earn.

3. Trust Current Account

This account is a non-interest bearing individual one. They do it to offer the basic day-to-day banking needs. Besides that, it allows the flexibility of using a cheque book.

4. Trust Kiddy Account

They created this account to help parents / guardians /trustees save gradually towards their child’s future and education. It’s a unique savings account for children between the ages of 0-17years.

5. Trust Business Current Account

As an interest bearing current account, they specifically designed it to offer business institutions (SME), churches, associations and professional institutions the flexibility of banking.

6. Trust Business Savings Account

This savings account targets businesses, churches, clubs, associations and institutions. In order to help them cultivate the culture of savings.

7. Trust Flexi Investment Plan Account

With this type of investment account, individuals can now switch from a pro-expenditure lifestyle to a wealth creation lifestyle. It has a minimum opening balance of GHc 50.00.

8. Trust Special Fixed Term Deposit

This is an investment account which lets clients invest for a period to yield returns higher than the existing Treasury bill rates. This perfectly suits clients who do not have immediate use for their funds and will invest it.

What are SIC Life Savings and Loans money transfer services?

In order to make financial transactions easier for their customers, they offer Money Transfer services. 

They carry out the money transfer through the following channels:

1. Western Union
2. Ria Money Transfer
3. MoneyGram
4. Vigo

Conclusions

Borrowers would never risk their assets as collateral for loans if they have sufficient cash flow. Especially in the time of emergency or need for a quick loan. But the fact remains the same, which is that individuals will always need money to solve their needs as long as they live.

However, getting a loan makes more sense, especially when you do not have any other alternative to explore. Meanwhile, having a savings account is a great option you can fall back on when you need money. And because of this, you can try out SIC Savings and Loans.

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How to get a loan from First National Bank Ghana

Guarantor loans – Meaning and what you should know about them

We link both loans and debts to money. Obviously, both of them are common to everyone and they are liabilities you need to pay off. This is because you can’t second-guess paying off a personal loan, consolidation loan, quick loan or mortgage loan you got. However, most people normally use loans and debts synchronously, but they have a slightly unique perspective. And that with a lot more you’ll see in the rest of this article.

What is a loan?

A loan is the money you get from a financial institution, which they expect you to repay with timely interest.

However, most times the exact amount of loan which you can get depends on your job type. Besides that, your income, tax information, debt in the market and credits (credit score/ history) are other important factors.

Loans are typically safe and secured. Moreover, some of them require collateral like; home, car, vehicle, and others. Because of this, if you cannot repay the loan, they will possess your asset.

Types of loans

There are different loans for borrowers across various financial institutions. They are:

1. Mortgage loans
2. Business loans
3. Guarantor loans
4. Student loans
5. Home loans
6. Car loans and others.

What are the advantages of loans?

Loans come with many advantages for borrowers. Some advantages of loans are:

1. Low-interest rates

Some banks offer manageable interests which are more comfortable for borrowers to pay.

2. Tax benefit

The interest you pay when you use your loan for business is a tax deductible expenditure. Besides that, you do not need to share your profit with your lender.

What are the disadvantages of loans?

Just as loans come with advantages, they also have their shortcomings too. 

The disadvantages of loans are:

1. They sometimes require collateral

Financial institutions sometimes ignore borrowers’ credit score (how good it may be), and ask for some collateral. However, this is how they protect themselves should you cannot repay the sum of money they lend you.

2. It could complicate application

Most times, except for online loan applications, you will need a lot of physical paperwork in order to apply. However, sometimes they could require you to visit the financial institution in person in order to complete some loan agreements. And this could go up to months to process your request and approve it depending on how fast the lenders are.

What is a debt?

Debt is the amount of money you borrow from a particular individual, nonprofit organization, or financial institution.

In this type of arrangement, you can return the principal amount of loan any time you wish. And the lender could require little or no interest from you before giving you the money.

Types of debts

There are different debts, and they are:

1. Personal debt
2. Medical debt
3. Credit card debt
4. Corporate debt
5. Consumer debt and others.

What are the advantages of debt?

There are some advantages debts have. They are:

1. You do not need qualification

Most financial institutions usually require you to belong to a particular social status. Or even have a certain level of tax information before you can qualify for a loan. But that’s not the case for debts.

2. It is usually on a long-term basis

With Debts you can have a long-term relationship with your lender. This could cause a scenario whereby you can share a bit of your profit with your lender. Thereafter, you can still borrow money again from your lender to expand your business and also repeat the process over again.

What are the disadvantages of debts?

Debts also come with some disadvantages. The following are some of them:

1. It could affect your credit rating

Debt typically reduces your credit score. And this places a terrible impression on your credit history, especially if you need additional funds from another lender. Therefore, having a debt can flag your credit score and make lenders reject your request for additional funds.

2. It could be unsafe sometimes

Sometimes debt lenders can be frauds, especially loan sharks. And you can unknowingly involve yourself in a debt trap. Thereby leading you to harassment, threats, and loss of properties.

The difference between loans and debts

With the points discussed above, you could easily spot the difference between loans and debts. However, let’s see the key difference between them.

The following are the key differences between loans and debts:

1. Loans usually require collateral, whereas debts do not.

2. All the loans you get are debts, but all debts you owe are not loans.

3. The money you borrow from a financial institution is a loan, whereas the one you borrow from a person or debenture is a debt.

Conclusion

With this article, it is cool to assume that the difference between loans and debts has been addressed. They usually document loans very well, possibly because it’s more official than some debt. Whereas debts do not require serious documentation at all times. However, do not abuse the privilege that comes with debts in that regard. Always stick to the agreement you have with your lender. This is because once you want to play on the intelligence of the lender. Then your lender could deny you such privilege you’ve been enjoying.

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Types of loans in Ghana – Meaning and advantages

Debt financing – What you need to know

How to get a credit card in Ghana

Most times, people in the private sector struggle with low salary scales. As a result, this low income affects the economic and financial status of individuals or families. When you are about to take up investment, as a private worker, finance may be a limiting factor. As the money earned from salary is not always enough. The meaning of loans for private workers and how they work are in this article. Also, the loan requirements, minimum loan amount, and more are all-inclusive in this article.

What are loans for private workers?

Loans for private workers are the type of loans that private workers can get to meet their personal needs. However, the private workers earn little salary to meet up with their needs on a monthly basis. This type of loan ensures that private workers access funds in a very convenient and flexible manner.

Moreso, the private workers’ loan helps private workers make investments, fund their existing businesses and make purchases, and so on.

Meanwhile, private workers can get this type of loan from various banks and financial institutions.

What are the requirements for loans for private workers in Ghana?

There are always requirements to meet before getting a loan. Usually, most of these requirements give the lender enough information about the borrower. Therefore, for you to access loans made available for private workers in Ghana, you need to meet the following requirements:

1. Loan application duly filled
2. Ghanaian national identity
3. Work identity card
4. One passport photograph
5. Your tax card
6. Letter of employment confirmation
7. Your Bank Verification Number (BVN)
8. Pay dated cheque to cover the duration of the loan
9. Statement of account containing three months’ pay slip
10. Salary ranges from GHS500 and above
11. A colleague as a guarantor.
12. Equal monthly installments

What are the minimum and maximum loan amounts I can borrow for private workers’ loans?

You should know whether the minimum or maximum loan amount can meet your loan needs. Hence, this will help you decide whether to take the loan. Meanwhile, the minimum amount you can borrow varies with a lender or loan company and even the bank. However, the minimum amount to borrow is GHS1000. Whereas, the maximum amount you can borrow is GHS 200,000.

How can I apply for loans to private workers in Ghana?

For any loan, there are always one, two or even more ways to apply. Hence, ways of applying for the loan usually vary from one institution to the other.

To apply for the private workers’ loans you can:

1. Visit their office and request for the private workers’ loans. The financial institution can now direct you on how to go about it.
2. You can visit their website with your smartphone, tablet or personal computer.

When you visit their website, you can now expect to:

1. Fill in the loan application form correctly
2. Upload your required documents
3. Accept and sign the contract agreement
4. Submit
5. They process your application
6. They disburse money upon successful processing

Note: Loan application varies by lender or financial institution

What is the interest rate on private workers’ loans in Ghana?

There is no accepted interest rate on private workers’ loans in Ghana. However, the interest rates differ from one bank or financial institution to the other. This usually is the case with additional charges for banks or financial institutions.

Are there additional charges on loans for private workers?

The information about the additional charges is also important. However, it prepares the borrowers’ minds ahead of time. Also, it helps them in making the right decision in either accepting the loan or looking for another alternative. Some financial institutions have additional charges of 1% as management fees and 0.20% as credit life insurance. While some do not have additional fees.

How fast do they release the private workers’ loans?

The need for loans might not give us all the time we need. Therefore, we have to know how fast we can get the loan after applying for it. However, they disburse the private workers’ loans within 48 hours from the point of successful application.

What is the repayment term of the private workers’ loans?

They plan the repayment terms of the private workers’ loans for them to be flexible and convenient for the borrowers. Meanwhile, the repayment terms occur on a monthly basis, which could be up to a maximum of  24 months.

Various loans for private workers in Ghana

Enumerated below are the various loans you can source for in Ghana as a private worker. Hence, to help you improve your home structures, engage in business, and make an investment. It could also be for an emergency. However, loans made available for private workers in Ghana include salary loans, personal loans, working capital, revolving loans, work and pay loans, salary advance loans, SME loans and so on.

1. Personal loans

Personal loans provide borrowers with a monthly repayment strategy with low interest in meeting their personal needs. There are many financial institutions in Accra that offer personal loans to private workers. They include fountain fund loans, HFC loans, banks and so on.

What are the benefits of personal loans?

You stand to benefit from the following as a private worker when you source for personal loans:

1. The monthly repayment plan is up to 24 months.
2. It enables the self used and employees to access finance to sort their financial challenges conveniently.

2. Salary loans

The salary loan is the type of loan you source for as a private worker. Therefore, as agreed with the lender, you intend to pay back with your salary by installment. However, we know this as salary loans, therefore, the borrowers can use it for whatever purpose.

3. Salary advance loans

This is an instant loan product for individuals on payroll who meet the basic requirements of the bank. Also, Bank’s Risk Acceptance Criteria (RAC).

What are the minimum requirements for a salary advance loan?

Below is the list of the general requirements that pertain to salary advance loans:

1. You must have an account with that financial institution
2. The account must be active
3. Your BVN

What are the benefits of private workers’ loans?

Being a private worker gives you an edge to enjoying the following benefits for the loans.

These benefits include:

1. Easy and fast loan processing
2. Loans for various needs
3. There is no collateral required
4. Repayment can be up to 24 months

Note: Income determines your loan eligibility because the more the loan, the more the possibility of early repayments.

Conclusion 

You might experience one financial difficulty or the other as a private worker. Meanwhile, financial difficulties might make you worry on the verge of making you have sleepless nights. However, there are many loan companies and financial institutions available in Ghana to take care of those worries and sleepless nights.

However, having known today that you are eligible for private workers’ loans, it would be nice to try it.

Read also:

Types of loans in Ghana – Meaning and advantages

How to apply for a student loan in Ghana

How to get a loan from Stanbic IBTC bank

While the internet has linked us to more information than ever before, it has triggered different scams and fraud of all sorts. Ranging from phishing of financial accounts, password, social media postings. Hence, scammers have many ways to get through on people’s money. They mostly contact their victims’ via email, loan application, the internet and contacts.

However, in loan scam or fraud, they usually gain the borrower’s trust and then scam the individual. In all these, you can protect yourself, family and friends by gaining knowledge of you can identify loan scams. Reading through this article, you will discover the meaning of loan scams, types and how to identify them in Ghana.

How to identify loan scams and fraudsters in Ghana

While deciding on the loan to source for, it is wise to be careful in order not to fall into wrong hands. There are some private loan lenders in Ghana that are involved in loan fraud. You can identify them through:

1. Phishing scam

This can come as a bank SMS, after receiving a new SMS from your bank. Always look at it closely. This may appear an enticing encouragement to apply for a loan with the financial institution.

2. Online loan shopping scam

Probably you have been thinking about getting a personal loan, then you see an ad on social media for a website that offers such with very low interest. Upon clicking on the ad, it will immediately take you to their website, where you register online.

3. Classified loan scam

This is when they classify the loan application website. They usually use an ad to refer people to the website. Only seeing their website will make you know they do not have association membership.

4. Not licenced by the bank of Ghana

Another way to identify a loan scam is when the financial institution offering the loan does not have a licence from the Bank of Ghana. You can get this information through research or enquiries.

5. Email compromise scam

After applying for an online loan and the lender sends you an email requiring you to pay some charges before they disburse your loan. They usually encourage you to pay within a specific period to make your loan application still valid. Scammers can make messages look real. 

6. Requiring sensitive information during loan application

When a lender asks you to input delicate information like your account details, credit card number and password during application. It has a malicious link. With such, your bank details are not secure, as scammers can retrieve your information from there.

7. It has a sense of urgency

Loan scams usually create a sense of urgency. It is advisable not to rush your application with the lender. You need to take time to think about what their approval message is telling you to do and consider whether it is real.

Who is most likely at risk for a loan scam?

Loan scammers in Ghana mostly target people who may have trouble getting a loan through conventional means or unsuspecting individuals. Also, borrowers with heavy debt, people with bad credit, private workers and the elderly are more susceptible. This is because scammers may claim to offer products that these set of borrowers desperately need. For example, no-credit-check loans may be attractive to borrowers with poor credit. Reason being that bad-credit loans from reputable lenders in Ghana may come with high interest rates. Hence, these borrowers cannot afford such.

When you fall into a high-risk bracket, it is important to stay alert about any loan company. Especially those that advertise a loan product that seems too good to be true for your needs. If you doubt the lender, verify whether the Bank of Ghana licenced them.

Red lights to be aware about loan scam and fraudsters in Ghana

You need to note the following red lights when you are seeking a loan. They include:

1. When the lender does not require your payment history.
2. No licence.
3. The lender asks for your credit card.
4. Website is not secure.
5. No head office or branch office.
6. Pressures you to respond immediately.
7. The lender guaranteed approval without asking you for any document.
8. When they are not specific and transparent with their charges.

What to do when you are a loan scam victim

While no one wants to admit being a victim of a scam or fraud, it happens. There are several steps you can take, beginning with laying off all communication with the company in question. Even if they are sending hostile and threatening messages from them. Provide documentation details of the process. Contact the local law enforcement by filling out a police report. 

Also, talk about it with family and friends to help others stay informed. 

How to spot a legitimate loan company in Ghana

When you have below the average credit they require, there are many companies that offer legitimate loans in Ghana. When looking for a good lender, start with these steps:

1. Check for the lender’s contact information, for instance, phone number, physical address, email address and physical address. This information should be on their website, even if it’s only an online lender.
2. Always investigate online reviews, as this will help you get information about some loan companies and lenders.
3. Make sure they register the loan company. Legitimate lenders must register with the Bank of Ghana before giving out loans. If you are not sure of the lender, you can contact the state’s attorney general.
4. Also, you need to research and compare multiple lenders in Ghana to make sure you are getting a better rate from a trusted source. 

Conclusion

Regarding the increasing number of loan scams and fraud, you need to be very careful with lenders. Always research properly on a particular lender before applying for a loan. Note these red lights mentioned in this article to avoid loan scam and fraud. However, when applying for a loan, never input your account details that may implicate you. Thorough enquiries will help you not to fall victim to fraudsters and scammers in Ghana.

Read also:

Types of loans in Ghana – Meaning and advantages

Who is a lender? Everything you should know

Bad debt – meaning and what you should know