Many Papua New Guineans are still confuse with our to obtain sme bank loans. Many SME owners used to think that right after your register your business or company with IPA or maybe after receiving a Financial literacy certificate, they would be automatically eligible for SME loans.
Others believe that if they have alot of assets like vehicles or houses, they are already eligible for it. Well let's check to see if you are eligible. Here are some simple tips on how to obtain a sme bank loans.
BANKS BEHAVIOR
All businesses either it be small or big business operate on same principle. Let's assume that you own a small trade store. You would only give credit to a faithful customer of yours. Even if someone owns a new 10 seater land cruiser or a nice rent house comes asking for credit in your store, you will not dare to give.
SAME PRINCIPLE IS APPLIED BY ALL BANKS. THEY WILL ONLY GIVE LOAN TO A FAITHFUL CUSTOMER.
WHAT MUST YOU DO??
The process is VERY SIMPLE!
1. Register Your Business or Company with IPA
2. Get TIN from IRC
3. Open your bank Account
4. Do regular deposit and withdrawal. It can be monthly, fortnightly or weekly or daily.
5. Mantain it for more than 6 months. (This will give confidence to the banks that you are a faithful business men or women)
There is NO TRICK. it's just simple as it is
WHY ARE MANY PEOPLE DENIED SME LOAN?
There many reasons but the obvious ones are;
1. You don't do regular banking
2. You ask more than what you are eligible. It's always safe to ask for soft loan as a STARTER.
3. SECURITY GAURANTEE ( Do a Asset Listing and record everything you own including laptop,phones, clothes and whatever equipment or tools you own. Add the value of all and you will have atleast enough to record them as security)
4. One time Cash Money, Vehicle, or Land won't gaurnantee you loan if you don't do regular banking.
5. LOAN DEFAULTS - Don't bother go to the bank to ask for loan if you have previous loans. Instead Create a different company, let your wife or husband or your trusted brother be the director in IPA and you become the Manager and open a company bank account. Then do business again and request for loan.
There are many reasons but the above are the obvious ones.
ATTEND MY SME AND FINANCIAL LITERACY TRAININGS IF YOU WISH TO KNOW MORE ABOUT ALL SME BUSINESSES
GOOD LUCK
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