Starting your own company can be a challenging but rewarding process. While a great idea and business plan are essential, financing remains the most critical element for business success.
Small Business Loans in Cameroon
Financing a startup or small business is often a complicated, drawn-out process, especially in Africa. Small business borrowers are treated with suspicion, and the default position for most lenders is to reject loan requests at the earliest opportunity.
Why is it difficult for small businesses to get loans from banks?
Capital is difficult for small businesses to access for several reasons. It's not that banks are against lending to small businesses – they want to – but traditional financial institutions have an outdated, labor-intensive lending process and regulations unfavorable to small businesses. Digitization in the banking sector has done little to alleviate this problem.
The difficulty of accessing capital is worsened because many small businesses applying for loans are new. Banks typically want to see at least a three-year banking history of a healthy business before considering a loan request.
Why small businesses are turning to alternative financing options
Alternative financing is any method through which business owners can acquire capital other than traditional banks. Several reasons small business owners are turning to alternative business loan providers. Here are three of the most common.
- Lower credit requirements: Traditional banks are almost certain to decline loans to borrowers with unfavorable credit history. For instance, individuals listed on Credit Reference Bureau (CRB) stand little or no chance of getting bank financing until they are de-listed.
- Easier qualification: Not all small business owners meet the additional requirements to apply and be approved for traditional loans. In these cases, business loan alternatives are helpful.
- Faster approval: Traditional bank loans can take weeks to be approved, whereas some business loan alternatives give you access to funding in a few hours or days.
100,000 FCFA to 5 million FCFA loans provides a lifeline for small businesses.
Read Also: How to Borrow From MTN Cameroon?
Introducing Temo Group Loans
Temo Group Loans is a special facility by Temo Group Cameroon and partners to provide affordable financing solutions to small businesses when they need them. Here are the Temo Group Loans features:
- Target: Micro and Small business.
- Loan amount: 100,000 – 5,000,000.
- Processing: 3 - 48 hours.
- Security: Required.
- Repayment: 1 – 6 months.
Types of Business Loans at Temo Group
1. Working capital
This loan is taken to finance a business's everyday operations. Working Capital loans are not used to buy long-term assets or investments and are, instead, used to provide the working capital that covers a company's short-term operational needs.
2. Asset finance
Asset finance is a loan to facilitate the acquisition of movable assets, such as Boda Boda, taxis, office furniture, motor vehicles, pickups, buses, lorries, and other business equipment.
3. Bridge finance
Bridge finance is an interim financing option used by businesses to cover short-term financing needs as a long-term financing option is being explored or finalized.
4. LPO finance
This facility enables businesses to adequately service local purchase orders. It ensures continuity of operations as immediate working capital needs are met.
5. Invoice discounting
This is an invoice finance facility when a business's unpaid invoices are used as collateral for a loan. It enables enterprises to leverage the value of their outstanding payments.
6. Business line of credit
This is a revolving line of credit, so rather than receiving a lump sum, you can access the money as and when you need it, as often as required. There's no pressure to borrow the money, but it's always there for business emergencies such as buying stock, paying outstanding invoices, taxes or salaries; you'll only pay interest on the exact amount of money you use.
Requirements to apply for a Small Business Loan in Cameroon
Applying for financing is a commitment that requires a good understanding of what the borrower is committing to. To increase your chances of getting a Temo Group Loan, you should understand the process and prepare adequately.
Here are five tips to help you prepare your business for financing success:
Know how much you need to borrow upfront
You can apply for any amount between 100,000 XAF and 5,000,000 XAF from Temo Group Loan. However, don't borrow more than you need. If you need additional funds in the future, you can borrow again after you have repaid the current loan facility.
Write a business plan with financial projections.
While it is not a requirement to get a Temo Group Loan, it is essential to prepare a business plan to have clarity of your business operations and future prospects. It also helps you gauge the business's capacity to borrow and repay loans.
Temo Group Loans are targeted at borrowers in growing and sustainable industries.
Do market research and know the current trends of your industry. Having this information demonstrates your knowledge as an entrepreneur and business foresight.
Avoid Credit Reference Bureau (CRB) listing.
Being listed on CRB is indicative of bad borrowing history. Ensure that you are up to date with other loan repayments and if you are having difficulty paying, renegotiate terms with loan providers to ensure you remain on good terms.
Business registration and compliance.
Many small businesses operate informally with little or no form of registration. This reduces your chances to transact as a business and access Temo Group Loans. Obtain the necessary registration and comply with government and regulatory institutions to increase your chances to access borrowing and expand your limits.
Need a Temo Group Loan? Apply for a Temo Group Loan today.