Without adequate access to finance, businesses can neither grow nor enter new markets. In addition, it limits job creation and even puts existing jobs at risk. SME financing in Nigeria is a challenge with a ripple effect, and smart lenders are looking to bridge this gap by giving businesses easy and quick access to funds.
In light of the dynamic lending landscape, lenders provide different loan facilities to help businesses grow, explore more opportunities, and provide timely products that keep their customers happy. One critical choice that arises is whether to embrace short-term or long-term loans.
Short-term loans typically give quick access to capital, offer flexibility, and attract minimal interest costs. Still, they often have higher payment frequency, which can strain cash flow if not managed well.
Long-term loans are best suited for larger investments. They require fewer monthly repayments and provide a reliable funding source over an extended period. On the flip side, they attract high-interest rates and often require substantial collateral (especially with commercial banks).
For decades, commercial banks have been the primary source of financial support for businesses in Nigeria. While they have played a crucial role in fostering economic growth, the traditional lending process has not always been smooth sailing for business owners. When seeking a loan from a commercial bank, entrepreneurs are often confronted with lengthy paperwork, lengthy approval procedures, and stringent collateral requirements.
Entrepreneurs are slowed down by unnecessary protocols when seeking short-term or long-term financing. For small businesses or startups looking for quick, accessible financing solutions, commercial banks have often proven to be less than ideal.
The challenges faced in the traditional loan landscape have left Nigerian business owners seeking alternatives that offer a more accessible, flexible, and timely approach to financing. This has paved the way for the rise of digital lenders, like Shara, that cater to the evolving needs of the country’s business community.
Shara is a Collateral-free Trade Transaction Finance company that offers business owners Quick Access to Funds to finance their business with no hidden charges or guarantors involved. Built on the principles of accessibility, transparency, and user-friendliness, Shara has emerged as a trusted partner for countless Nigerian business owners in need of financial support.
Why Do Nigerian Businesses Prefer Digital Lenders Like Shara Over Commercial Banks?
Some advantages of digital lenders like Shara is the unparalleled accessibility they offer to Nigerian business owners.
- Convenient Application Process – The online application process is a game-changer for entrepreneurs. It allows them to initiate loan applications at their convenience, reducing the need for time-consuming visits to a bank branch. All that’s required is a computer or smartphone and an internet connection.
- Always-on Business Operations – Also, digital lenders operate around the clock. This means businesses can apply for loans anytime, even during weekends and holidays. This flexibility ensures that financial emergencies can be addressed promptly.
- Flexible Credit Options – Digital lending platforms often offer a range of loan options with varying terms. Business owners can choose loan duration that align with their business plans, whether a short-term injection of capital for working capital needs or a long-term investment in expansion.
- Recurring Financing – Some digital lenders, like Shara, offer revolving credit lines, which provide businesses with ongoing access to funds. This flexibility is particularly valuable for businesses with fluctuating cash flow. The revolving credit lines also mean customers can receive another cycle of funding after they complete payment for one, without going through the application process again.
- Quick Access to Funds – Digital lenders typically make approval decisions swiftly, sometimes within hours or even minutes. The funds are disbursed promptly, ensuring businesses can act on opportunities without unnecessary delays.
- Transparency – Borrowers can easily manage their loans through user-friendly digital platforms. These platforms provide real-time access to loan information, repayment schedules, and more, enhancing the convenience and transparency of the lending process.
- Collateral-free Financing – Many digital lenders require less collateral or even offer unsecured loans, reducing the risk for borrowers, especially smaller businesses that may lack substantial assets to pledge.
The growth of digital lending has empowered Nigerian entrepreneurs to access funding swiftly, manage their loans transparently, and reduce the barriers to entry that traditional banks often present.
Platforms like Shara, with their commitment to accessibility, transparency, and user-friendliness, have played a pivotal role in transforming the lending landscape. To start enjoying Shara’s offering, visit their website or call 09030486624 to start enjoying easy access to Business Finance.
