You could use a long-term business loan in Ghana to grow your business more conveniently. Growing a business and sustaining it at the same time in Ghana is not a simple task, as it requires proper funding. Notwithstanding the actual need for the business finance, paying for enormous business expenses upfront is difficult. However, if splitting out your enormous business expenses over a longer period is helping you. Then a long-term business loan will be the right choice for your business. Long-term business loans have helped many business owners in Ghana so much. In this article, you will find the meaning of long-term business loan, how it works, who is eligible. Also, interest rate, financial institutions that offer business loans and other details.
What is a long-term business loan?
A long-term business loan is a financing you can use to meet the urgent needs of your growing business. It has a very long repayment period and involves a sizable amount of money.
How does Long-Term business loans work?
It is a loan that the financial institution or lender offers a borrower for a business purposes. Those business purposes range from purchasing business equipment to real estate. A long-term business loan has a long repayment period up to 30years, depending on the financial institution.
Long-term loans help businesses by providing funds for financing the business. The business owners in return pay back this money in fixed amounts with interest.
What duration of a Long-Term Loan can I get?
The duration of a long-term loan varies with financial institutions, the amount involved also, the purpose of the loan. The name ‘long-term’ loan is on the repayment period. Repayment period for long-term business loans in Ghana ranges from 10 years to 20years.
What kind of interest is in a long-term business loan?
Every loan has an interest rate, long-term business loans are not an exception. Though interest rates vary with financial institutions and the amount involved.do not come with set interest rates. Interest rates for long-term business loans often depend on the credit history of the borrower. Having an excellent credit history can cause getting an interest of 5%.
Meanwhile, businesses with poor credit histories or start up business interest rates range from 20% to 30%.
Who is eligible for long-term business loans?
Any legitimate business owner is eligible to apply. The prospective applicant must own 20% of the business if the business is a joint business. You should also make sure you register the business before you can qualify to apply for long-term business loans.
The prospective applicant must have a credit score of 600, though most financial institutions require a higher credit score. This helps the terms and interest rate to be favourable.
Also, some financial institutions require the business to exist 2years or more before applying for long-term business loans. Any business that makes an excellent annual revenue is also eligible to apply for loan.
Can a business with bad credit be eligible for this loan?
Businesses with bad credit are not eligible for long-term business loans. Reason for this is that many financial institutions in Ghana have high credit score requirements. They only offer loans to businesses with credit scores of 600 and above.
However, there are some alternative lenders in Ghana that offer long-term business loans but with high interest rates. In such cases, the credit score will not be below 400. It is always advisable to boost your credit score before applying for long-term business loans.
Can startup businesses apply for long-term business loans in Ghana?
The business you wish to apply for long-term business loans in Ghana must be 2years and above. The chances of startups getting long-term business loans is very thin in Ghana.
What are the uses of long-term business loans?
There are many aspects of a business where we can use long-term loans for. Many business needs require a vast amount of money that only long-term loans can handle.
Some uses of this loan in Ghana include:
- Get new employees
- Renovation of business premises
- Improving existing facilities
- Purchase of real estate
- Refinance existing business debt
- Purchase of business vehicle
- Business growth
- Purchase of expensive business equipment
- Business expansion
- Purchase of supplies or inventory
Note: The key thing to note is that long-term business loans are for any business purpose.
What are the pros of long-term business loans?
The urgent need for long-term business made some not to consider the benefits and downsides before applying. Some benefits of long-term business loans are:
- Long-term business loans have low interest rates
- It has a very long repayment period up to 20years.
- It involves small monthly payments.
- You can use a long-term business loan for debt consolidation.
Cons of long-term business loans in Ghana
Despite the benefits of long-term business loans, it still has downsides. These downsides are things you think through before applying for long-term business loans. Some downsides of long-term business loans include:
- Variable Interest Rates
- The overall cost is very expensive.
- It requires collateral.
- They require high credit.
- The approval process is always long.
List of financial institutions that offer long-term business loans in Ghana
Below are some financial institutions you can apply for business loans. They include:
- Ecobank Ghana
- Bank of Ghana
- Electronic Gateway Consult
- First Havila Investment Group limited
- Access Bank Ghana
- Bailey Finance
- Broadview Consult Ltd
- Social security and National
- Insurance Trust
- Mc Carthy microfinance service
- UT Bank Ghana Ltd
- JSH Finance Limited
- Kruger financial loan services
- Standard ford Trust
- First allied saving and loans
- Company limited
- Stable capital ltd
- Express savings and loans
- Ghana Commercial Ran
- Johnson savings and loans ltd
- Katamanto savings and loans co.ltd.
- Union savings and loans Co. ltd.
A long-term business loan can be a sure way to fund businesses that require enormous expenses. However, to get the best out of long-term business in Ghana, you need to do thorough research. After that, you consider your credit score before applying to your preferred financial institution. Long-term business loans in Ghana also have a low interest rate that helps you grow your business to a greater level. Alternatively, you could try out business startup loans in Ghana to start-up a new business. However, you could also try out a long-term personal loan to cater to your needs and repay conveniently.