NDB LOAN – START UP PACKAGE FOR SMES

NDB after so many months of delay is now giving out its government sponsored SME loan products. There are four types of loan products that are now being given out by NDB;

1. Agriculture Loan

2. Women in business loan

3. Youth and Small Entrepreneurs loan

4. Bougainville Loan

**REQUIREMENTS**

The loan requirement for all SME loan startup package is Same except few not included in startup package. You must have

a) IPA Certificate and Extract

b) TIN from IRC

c) Have a Business Bank Account in Peoples Micro Bank Limited (PMBL)

d) Must Have Financial Literacy Certificate or Equivalent

e) Must have 20% Equity available for the all loan products except for Agriculture has it requires equity of 10%.

f) Security Documents if any. (land title, vehicle registration etc)

g) Valuation Report for the security pledged

h) Quotation from Suppliers

i) Cashflow Statements

j) Business Plan.

**CASHFLOW AND BUSINESS PLAN**

Cashflow and the business plan format will be given to you when you apply for any of the Above SME Loan Products. Cash-flow statement will simply be projected as you are only a starter. Cashflow is calculated monthly. Assume that you will have K20,000.00 monthly . Hence put K20,000 for all the 12 months starting from the month you are applying for the loan.

Business Plan is simply a simple detailed plan of how you will run your business if NDB wishes to finance you. All questionnaires will be available for you to fill in only. Be convincing when you do your business plan. The business plan will include;

a) Main reason to have the loan

b) Detail of the proposed business

c) Your personal details

d) Nature of the business

e) Marketing –which includes your customers, products or services you offer, size of the market, competition, Your strength and weakness, business promotion etc..

f) Finance, Profit and Loss Statements etc..

**DEBT SERVICE RATIO**

One of the most important aspect of the loan is the debt service ratio. This is a formulae all the banks use to check if you are eligible for a loan or not. Hence as a starter the DSR for all the SME loan under NDB is 2.1 this means your monthly or annual income must be greater than your monthly or annual expense. If the DSR is greater 2.1, you will be eligible as a starter. The trick is to increase your projected income in your cash flow monthly. Banks have their own way of calculating the expenses. They will calculate your expense at a rate of 65%. Hence, the income monthly must increase to reach the DSR 0f 2;1.

**SME LOAN STARTUP PACKAGE**

Startup Loan simply means that after you register your business with IPA and have TIN from IRC, have an account opened with PMBL. You can then request for a startup loan from NDB. However, Equity is a MUST and make No excuse when you apply with NDB SME Loan. 

Good Luck

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