Application for Business Loan: What to Know

Money is an instrument for investment. It is vital to find extra money for principal investments and a business loan could be the way up. Perhaps, your car needs corrective maintenance or there comes a medical emergency. During business exigencies, you may consider application for a loan. Before you do, there are a few things you should know. For starters, you should know what kind of loan you're looking for. 

SECURED AND UNSECURED LOANS

There are two main types of loans: secured and unsecured. A secured loan is one that is backed by collateral as a car or house. An unsecured loan is not backed by collateral security and is thus riskier for the lender. Consider the interest rate on the loan. The interest rate is the percentage of the principal chargeable for borrowing the money. The higher the interest rate, the more you will have to pay back in the end. Finally, you should know how long you have to pay back the loan. This is called the term of the loan. The shorter the term, the less you will have to pay in interest. However, you will have to make bigger payments each month. Taking out a loan can be a big decision. 

Before you decide to take out a loan, there are a few things you should know. 

1. Understanding the different types of loans available can help you choose the right one. 

2. Be aware of the interest rates, fees, and repayment terms associated with each type of loan. 

3. Make sure you can afford the monthly payments and have a plan to repay the loan. 

4. Shop around to compare rates and terms from different lenders. 

5. Be sure to read the fine print and understand the terms of the loan before you sign. 

6. If you have any questions, be sure to ask the lender before you agree to the loan.

Before you decide to take out a loan, there are a few things you should know.

Application for a loan could be a financial decision. There are a few things you should know before you decide to take out a loan. One thing to consider is what you will use the loan for. Will you use it for a large purchase, to consolidate debt, or for something else? It is important to have a clear purpose for taking out a loan before you apply. You should also make sure you can afford the monthly payments. To do this, you will need to calculate your debt-to-income ratio. This is the percentage of your monthly income that goes towards paying off debts. Lenders will typically want your debt-to-income ratio to be below 45%. Another thing to consider is the type of loan you want. There are different types of loans, such as secured and unsecured loans. A secured loan is one that is backed by collateral, such as a car or home. An unsecured loan is not backed by anything and is therefore riskier for the lender. You should also compare interest rates and fees. Some loans have fixed interest rates, while others have variable interest rates. You will also need to pay fees, such as origination fees and late payment fees. Make sure you compare all of these factors before you decide to take out a loan. Taking out a loan can be a big decision. Make sure you are knowledgeable about the process before you make a decision.

2. Understanding the different types of loans available can help you choose the right one.

Most people know that there are different types of loans available, but they may not know the details of each type. Here are a few things to keep in mind when considering a loan: Installment Loans: With an installment loan, you borrow a set amount of money and then make fixed payments over a period of time, typically a few months to a few years. The interest rate on an installment loan is usually lower than the interest rate on a credit card, and the payments are usually lower as well. Payday Loans: Payday loans are typically small, short-term loans that are typically due on your next payday. The interest rate on a payday loan is usually much higher than the interest rate on an installment loan, and the fees can be very high. Auto Loans: Auto loans are usually installment loans that are used to finance the purchase of a car. The interest rate on an auto loan is usually lower than the interest rate on an installment loan, but the payments are often higher. Home Loans: Home loans are usually long-term installment loans that are used to finance the purchase of a home. The interest rate on a home loan is usually lower than the interest rate on an installment loan, but the payments are often much higher. There are many other types of loans available, but these are some of the most common. When considering a loan, be sure to shop around and compare rates and terms to find the best deal.

3. Be aware of the interest rates, fees, and repayment terms associated with each type of loan.

Before taking out a loan, it is important to be aware of the interest rates, fees, and repayment terms associated with each type of loan. Interest rates can vary significantly from one lender to another, so it is important to shop around and compare rates before choosing a loan. Fees can also vary from one lender to another, so it is important to ask about all fees before taking out a loan. Some common fees associated with loans include origination fees, late payment fees, and prepayment penalties. repayment terms can also vary from one lender to another. Some loans may have a fixed repayment schedule, while others may allow for more flexible repayment terms. It is important to understand the repayment terms of a loan before taking it out, so that there are no surprises later on.

4. Make sure you can afford the monthly payments and have a plan to repay the loan.

When you're considering taking out a loan, it is paramount to ensure you can repay the monthly instalments. Bear in mind: Cautiously calculate if you can afford the monthly repayments. To do this, take a look at your budget and see how much money you have left after covering your regular expenses. If you can't afford the monthly payments, you may need to consider a different loan option. Second, think about how you will repay the loan. Will you be able to pay it off in full within a few years, or do you need a longer repayment period? If you're not sure how you will repay the loan, you may want to consider a different option. Third, make sure you understand the terms of the loan. What is the interest rate? What are the fees? What is the repayment period? By understanding the terms of the loan, you can make sure that you're getting a loan that is right for you. Taking out a loan can be a great way to finance a purchase or project, but it's important to make sure that you can afford the monthly payments and that you have a plan to repay the loan. By keeping these things in mind, you can make sure that you're getting a loan that is right for you.

5. Shop around to compare rates and terms from different lenders.

When you're ready to take out a loan, one of the most important things you can do is shop around. Different lenders will offer different rates and terms, so it's important to compare them before you make a decision. Here are a few things to keep in mind when you're shopping around for a loan: Interest rates: The interest rate is the amount of money you'll have to pay back in addition to the amount you borrowed. It's important to compare interest rates when you're shopping for a loan, because a higher interest rate will mean you'll have to pay back more money in the long run. Loan terms: The term of a loan is the amount of time you have to repay the loan. Some loans have shorter terms, while others have longer terms. It's important to compare loan terms when you're shopping for a loan, because a shorter term will mean you'll have to pay back the loan more quickly, while a longer term will give you more time to repay the loan. fees: Some lenders charge fees in addition to the interest rate. These fees can include origination fees, application fees, and closing fees. It's important to compare fees when you're shopping for a loan, because a higher fee will mean you'll have to pay back more money in the long run. Once you've compared rates, terms, and fees from different lenders, you'll be able to choose the loan that's right for you.

6. Be sure to read the fine print and understand the terms of the loan before you sign.

Be sure to read the fine print and understand the terms of the loan before you sign. This is important because if you don't understand the terms of the loan, you could end up in a worse financial situation than you are in now. The terms of the loan will include things like the interest rate, the length of the loan, and the repayment schedule. You need to make sure that you can afford the loan before you sign for it.

7. If you have any questions, be sure to ask the lender before you agree to the loan.

If you're thinking about taking out a loan, there are some things you should know first. Here are seven things to keep in mind before you sign on the dotted line. 

1. Know purpose of loan. Whether it's auto loan, mortgage loan, or educational loan, make sure you understand what the loan is for and that you really need it.

 2. Consider the interest rate. This is the amount you'll end up paying in addition to the amount you borrow, so make sure you can afford it. 

3. Pay attention to the repayment terms. You'll need to make regular payments on your loan, so be sure you can commit to the terms before you agree to the loan. 

4. Know the fees involved. There may be origination fees, late payment fees, or other charges associated with the loan. Be sure to ask about all of the fees before you agree to the loan. 

5. Consider your alternatives. Is a loan really the best option for you? Could you save up and pay cash for what you need? Or are there other options that might be a better fit? 

6. Shop around. Don't just go with the first lender you talk to. Get quotes from a few different lenders to compare rates and terms. 

7. Preview the contract documents, ask questions before signing loan agreement forms. You don't want to be stuck with a loan you can't afford or that doesn't meet your needs. Taking out a loan can be a big decision, but it doesn't have to be a scary one. Just be sure to do your homework and make sure you understand what you're getting into before you sign on the dotted line.

There are few things you should keep in mind before you take out a loan. First, make sure you understand the interest rates and repayment terms. Second, be sure you can afford the monthly payments. And finally, don't forget to factor in the origination fee. Taking out a loan can be a great way to finance a major purchase, but it's important to do your homework first.

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Asset Management

FBN Capital Asset Management is a leading asset manager in Nigeria for individual and institutional investors. We offer a range of investment products and services, with strategies spanning various asset classes and sectors.

As one of the largest asset managers in Nigeria, we guide our clients through Africa’s dynamic markets and identify the best opportunities that shape their portfolios and investment goals. Find out more.

We bring together expertise across capital market sectors, asset allocation, portfolio management and risk management disciplines. Our distinctive heritage as an organisation allows us to leverage specialisation of the subsidiaries of our parent company to enhance delivery and provide world-class client solutions.

Prices and performance of our mutual funds as at 26 August 2015:

The FBN Money Market Fund
Bid Price:	N100
Yield*:	13.40%

The FBN Fixed Income Fund
Bid Price:	N1,087.90
Offer Price:	N1,088.64
Yield^:	13.64%

The FBN Heritage Fund
Bid Price:	N105.21
Offer Price:	N105.70

Data updated daily. All yields are stated net of fees and expenses

¹ The fund manager is required to maintain a stable price (NAV) of ₦100.00
* Annualised yield
^ Annualised equivalent yield

View FBN Money Market Fund – Historic Yields

View FBN Fixed Income Fund - Historic Prices

View FBN Heritage Fund - Historic Prices

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Business Trusts

Corporate Trusts
Through our team of experts, we act as financial agent on the following transactions:

Syndicated loans

FBN Trustees is a leading Trusteeship company in syndicated loans arrangement.
Find out more.

Corporate bonds

We have assisted a wide range of businesses across various sectors acting as trustees in the issuance corporate bonds.
Find out more.

Share warehousing

Over the past few decades FBN Trustees has built experience warehousing various portions of shares for the benefit of beneficiaries.
Find out more.

Private Trust
Taking Care of Your Loved Ones

Whether it is investing in your children’s education, putting them on a sound footing to become financially independent in later years, our team of professional trust advisors can help you structure your finances to ensure your dependants get maximum benefit.

Private Trusts

A Trust ensures that your assets are managed according to your wishes, with the assets held, managed and distributed according to your directions without court supervision and involvement.  This can save your beneficiaries time and money.

FBN Trustees has a range of trust options to help you secure your dependants’ financial future.

Hand over the complexities

Our experienced trust advisors can help you find the most suitable estate planning options available to manage your affairs. From understanding the tax implications to ensuring compliance with legal requirements, you won’t have to deal with the complexities on your own.
Find out more.

Take care of your dependants

Looking for a tool to plan your investments or cater for a specific purpose?  We structure private trusts to take effect during and/or after your lifetime.
Find out more.

Leave a legacy

We help to set-up, structure and manage charitable trusts such as foundations and endowments. We also act as platforms through which funds can be raised for charitable causes.
Find out more.

Safe keeping

FBN Trustees acts as custodian to transactions, holding title documents for safekeeping purposes in accordance with the custodial agreement. Safety, security, neutrality and confidentiality remain our major consideration in the regard.
Find out more.

Public Trust
We act as Trustees to government bond issuances, unit trust schemes, reserve funds and other types of funds that require the pooling together of resources aimed at achieving a particular purpose.

As Trustees to these different offerings, our principal function is the protection of the investors on whose behalf we act. Some of our other roles include:

monitoring the activities of fund managers and custodians on your behalf, as investor
ensuring compliance by fund managers and issuers with regulatory and contractual requirements
overseeing the activities of registrars
summoning and chairing of investors’ meetings
acting at all times in the interest and for the benefit of investors

Agency Services
As an Escrow Agent, we can act on behalf of two or more parties involved in a business transaction to hold the Escrow Assets until certain conditions are met or obligations are satisfied.

Hold the benefit of the Escrow Asset in line with the Escrow Agreement;
Deal with the Escrow Assets in accordance with the Escrow Agreement;
Render account of to the other Parties to the Escrow Agreement; and
Ensure the termination of the Escrow Arrangement in line with the Escrow Agreement
Ensure the Terms and Conditions are set out in an Escrow Agreement.

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Debt and Loan Solutions

Debt Solutions
We assist in the structuring and arranging of optimal financing solutions for both green and brown field projects spanning all sectors of the Nigerian economy. FBN Capital structured the first privately-funded gas pipeline as well as the first privately funded district development project in Nigeria.

One of our key strengths is the ability to distribute loan assets to numerous financial institutions in Nigeria and overseas. We provide access to long-term funding and financial structuring and our transactions attract the participation of local financial institutions, foreign banks, as well as development financial institutions and multi-lateral agencies.

Project Finance Advisory:

Our product lines include project finance, debt structuring and arranging, financial modelling, project risk due diligence and analysis, PPP consulting and bid support.

Debt Arranging:

We have strong debt-sourcing and arranging capabilities and an unrivalled track record in closing challenging debt-arranging mandates.  We have thorough knowledge and hands-on experience in managing the entire debt-raising process to achieve a successful and timely financial close.

Structured Finance Advisory:

We offer Special Purpose Vehicle (“SPV”) and debt structuring capabilities and assist clients in developing optimal capital structures, reorganising balance sheets or existing debt obligations to achieve short, medium and long term strategic objectives.

Debt Solutions capabilities

We act as either transaction financial adviser and or debt arranger on the following services:

Acquisition finance
Project finance (Greenfield and Brownfield)
Debt structuring and arranging
Leveraged Financing
Debt based & asset backed securitization of future receivables
Financial modelling
PP consulting and bid support
Project risk due diligence analysis
Supply chain finance
Vendor financing
Export Credit Agency financing
DFI financing

Origination and Client Coverage
The Origination and Client Coverage group is the primary interface between FBN Capital and its clients. Our team of experienced professionals will work to understand your strategic, financing or risk management needs and partner with the relevant product group to deliver on the FBN Capital platform.

We focus on the following industry sectors:

Oil and Gas
Infrastructure and Power
Agribusiness
Diversified Industries
Financial Institutions
Public Sector
Technology and Telecommunications
Real Estate and Hospitality
Consumer and Retail

Deal Case
Deal Case Studies




Infrastructure & Project Finance (Power)

Deal Description

FBN Capital Limited was mandated to act as Global Facility Coordinator, Financial Model Bank, Structuring Bank and Facility Agent on the raising of approximately $303 million debt financing for the acquisition of 70% shareholding in Egbin Power Generation Plc by Kepco Energy Resource Limited “KERL”. KERL is an SPV jointly owned by Korea Electric Power Corporation “KEPCO” and Energy Resource Limited (a Sahara Group Company).  The Sahara Group is a leading indigenous oil and gas company with extensive footprint across the Energy value chain.

The transaction involved raising a term loan facility of $303 million and working capital facility of $5 million for the acquisition of the Egbin Power Generation Company, the largest power generation company in Nigeria which supplies over 20% of the required power generation capacity in Nigeria. The financing was the very first power sector syndicated transaction to achieve loan signing following the Nigeria power sector reforms which commenced in 2005.




Infrastructure Project Finance (Telco)

Deal Description

FBN Capital was the Joint Financial Adviser to Etisalat’s US$1.25bn Loan Facility to fund the addition of 924 BTS sites. FBN Capital and Citigroup Global Markets, together as 'Financial Advisers', were mandated by Etisalat to raise financing to refinance its existing $650mm senior debt facility, and finance needs for its network deployment plan across Nigeria. The deal is noteworthy in that it also received the Africa Investor Infrastructure Investment award in May this year evidence of its outstanding nature among industry watchers.

The Deal got recognised by EMEA Finance Magazine and Africa Investor Magazine in 2014 winning the best Telecoms deal in Africa and ICT/Telecoms deal of the year respectively for the efforts made by the stakeholders bringing the deal to reality



Infrastructure Project Finance (Oil & Gas)

Deal Description

FBN Capital Limited was mandated by Seven Energy International Limited in 2013 to act as the Mandated Lead Arranger in the structuring and raising of a US$170 Acquisition Finance Facility.

The facility was used to part-finance the acquisition of 100% shareholding in East Horizon Gas Company Limited (EHGC). EHGC was incorporated by Oando Plc with the specific intention of developing and operating an 18-inch, 128km natural gas pipeline that connects with the Obigbo-Alscon pipeline at Ukanafun to supply gas to the UNICEM cement plant in Mfamosing, Cross River State and to meet the need of other industrial users in the Calabar region. The acquisition of EHGC is in line with SEIL’s strategic plans for expanding its gas transmission and distribution network assets in the southeast Niger Delta region to supply the regional demand centres of Aba, Calabar and Port Harcourt.



Initial Public Offering

Deal Description


FSDH Funding SPV Plc Offered for Subscription of N5,530,000,000 3 Year 14.25% Fixed Rate Senior Unsecured Bond Due 2016 under the N100,000,000,000 FSDH Funding SPV Plc Debt Issuance Programme. FBN Capital acted as the Lead Issuing House on the N5.53 billion Fixed Rate Bond issue for FSDH Funding SPV, a financing vehicle guaranteed by FSDH Merchant Bank. This transaction represents the first tranche of the firm’s N100billion Debt Issuance Programme.

FSDH Merchant Bank and FSDH Funding SPV Plc entered a Notes Issuance Agreement whereby senior, unsecured notes issued by FSDH Merchant Bank would be purchased by FSDH Funding SPV Plc. Stanbic IBTC Capital and UBA Capital participated on this transaction as Joint Issuing Houses.



Initial Public Offering

Deal Description

Honeywell Flour Mills Plc Initial Public Offering by way of an Offer for Sale of 1,252,941,177 Ordinary Shares of 50Kobo each at N8.50 per share and an Offer for Subscription of 941,176,471 Ordinary Shares of 50 Kobo each at N8.50 per share. FBN Capital acted as Leading Issue House.

The total offer was undertaken to give investors the opportunity to become a part owners of Honeywell Flour Mills Plc. The combined offer also availed the company the opportunity to meet the NSE’s listing requirements.


Infrastructure Project Finance (Oil & Gas)
Deal Description

Conoco Phillips embarked on a process of selling their participating interest in OMLs 60, 61, 62, 63, 131 and 145 (the “Target Assets”) located in a prolific oil and gas producing zone in the Niger Delta.  Following a competitive bidding process, Oando Energy Resources Inc. (“OER”) and its affiliates emerged the preferred bidder for the Target Assets which have a net production level of ~ 45,000 boe/d and are located in a prolific oil and gas producing zone of the Niger Delta.

The total consideration for the acquisition of up to USD 1.6 billion was financed via a combination of debt and equity. The debt portion of the acquisition facility comprised of a US$450 Million RBL Facility provided by both Nigerian and offshore banks and a US$350 Million Corporate Facility provided by Nigerian banks.

The Corporate Facility, the Lenders leveraged on the following assets; OMLs 90, 13, 56 and 125/134. Oando Energy Resources appointed FBN Capital as Joint Mandated Lead Arranger and financial modelling bank for the Corporate Facility to part fund the purchase of the Target Assets.



Buy-Side M&A

Deal Description

Acquisition of 71.2% equity stake in Oasis Insurance Plc and Subsequent Take-Private.
FBN Capital advised FBN Life on the acquisition of a 71.2% stake in Oasis Insurance PLC from its majority shareholders. Subsequent to the acquisition FBN Capital advised on a mandatory tender offer to the minority shareholders of Oasis Insurance and the eventual take-private of the company which resulted in its de-listing of the company from the NSE.


Buy-Side M&A
Deal Description

US$108 million First Bank of Nigeria Limited Acquisition of selected West Africa Operations of ICB Group Holdings AG.
FBN Capital advised First Bank of Nigeria Ltd on its acquisition of ICB Senegal. This marked the successful completion First Bank’s acquisition of ICB Group Holdings AG’s banking operations in Ghana, Gambia, Guinea, Sierra Leone and Senegal. The transaction, which is the largest Nigerian outbound M&A deal by geographic spread, involved navigating complex regulatory requirements across five jurisdictions; which FBN Capital was able to successfully manage.


Financial Advisory
Deal Description

FBN Capital was mandated as Financial Adviser to the FBN Eurobond offer alongside Citibank and Goldman Sachs International who acted in the capacity of Joint Lead Managers. First Bank Nigeria accessed the international market for the third time in the $450million Subordinated Notes participation due 2021- its largest Eurobond sale following the first offer in 2007.

The transaction supported the bank in financing near term business initiatives, diversifying and extending the maturity of the bank’s foreign currency funding and in enhancing capitalisation with a capital adequacy ratio (CAR) of 20.3% as at September 2014. The Tier 2 capital transaction has a seven-year maturity and is callable by First Bank on the 5th anniversary of the issuance date. The issue carries an initial coupon of 8.250% on the nominal par amount, which resets at the call date to a new fixed rate (without any step-up) until maturity. The Tier 2 capital treatment amortises over the last 5 years prior to maturity. 

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Capital Market

Debt Capital Market

We are a leading issuing house for sub-national government and corporate bond issues in the Nigerian capital markets.

Our pioneering team originates and executes bonds, asset-backed securities and hybrid instruments. Applying an award-winning approach to each transaction, we focus on your individual financing need and the impact on your short- and long-term strategic goals.

Our diverse product and sector specialists engage all necessary stakeholders to ensure delivery of cost-effective solutions.

Debt Capital Market capabilities :

Government, agency and corporate bond issues
Asset Backed Securities
High Yield Bonds

We are a leading issuing house for sub-national government and corporate bond issues in the Nigerian capital markets.

Our pioneering team originates and executes bonds, asset-backed securities and hybrid instruments. Applying an award-winning approach to each transaction, we focus on your individual financing need and the impact on your short- and long-term strategic goals.

Our diverse product and sector specialists engage all necessary stakeholders to ensure delivery of cost-effective solutions.

Debt Capital Market capabilities :

Government, agency and corporate bond issues
Asset Backed Securities
High Yield Bonds

Equity Capital Market

Our team of experts will carefully guide you through the entire process of raising equity.

We structure and execute equity and equity-linked products such as initial public offerings, follow-on offerings, rights issues, private placements and convertibles. We approach each transaction by working closely together to select the optimal structure, size, timing, pricing and marketing strategy.

Equity Capital Markets capabilities:

• Preferred stock issuance
• Private placements
• Equity and convertible securities issuance
• Initial public offerings
• Rights issues

Financial Advisory

We deliver corporate finance and strategic advice to clients. FBN Capital is a leading transaction advisor across several sectors, delivering corporate finance and strategic advice when it counts.

We have successfully advised major corporate and financial institutions on both domestic and cross-border initiatives. We provide support over the entire spectrum of economic and business cycles, offering independent and impartial advice.

Our Financial Advisory capabilities

• Sell-side M&A Advisory
• Buy-side M&A Advisory
• Restructurings and recapitalisations
• Corporate sales and divestitures
• Corporate Finance

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FBN Capital Investment

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Managing Director and Chief Investment Officer has amassed a wealth of experience both locally and internationally. read more

 

FBN Capital Asset Management Limited is a subsidiary of FBN Capital Limited, a fully owned subsidiary of FBN Holdings PLC. 

FBN Holdings is one of the leading financial services platforms in Africa, offering a diverse range of financial services to a broad spectrum of clients.

FBN Capital Asset Management is a leading asset manager in Nigeria for individual and institutional investors. We offer a range of investment products and services, with strategies spanning various asset classes and sectors. We guide our clients through Africa’s dynamic markets, and identify the best opportunities that shape their portfolios and investment goals.   

 Our Mission

At FBN Capital Asset Management, our mission is to create a better financial future for our clients by delivering superior returns across all our product offerings and services.

Our Products

INVESTMENT BANKING
Debt Capital Market
Equity Capital Market
Financial Advisory
Debt Solutions
Origination and Client Coverage
Deal Case Studies

MARKETS
Equity Brokerage
Fixed Income Sales and Trading
Research
Structuring
Institutional Sales
Channels Management

TRUST AND AGENCY SERVICES
Corporate Trust
Private Trust
Public Trust
Agency Services
Financial Trustees

ASSET MANAGEMENT
Fund Prices and Performance
ABC of Investing Blog
Alternative Investment
Out Portfolio

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