Best Loan Options for Entrepreneurs in Nigeria

If you’ve ever had a great business idea and watched it slip through your fingers because of lack of funds, you’re not alone. Thousands of entrepreneurs in Nigeria are stuck in the same boat — ideas ready to go, but wallets telling a different story. While some manage to bootstrap or get a helping hand from friends and family, others turn to loans. But let’s be honest, not all loan options are worth the trouble.

Some come with sky-high interest rates. Others bury you in paperwork. And a few sound good on paper but are nearly impossible to access in reality. So, if you’re looking for loan options that are actually within reach, come with fair terms, and are known to support Nigerian businesses, this post is for you.

Here’s a look at some of the best loan sources available to entrepreneurs in Nigeria — from government initiatives to fintech platforms and traditional banks.

1. Bank of Industry (BOI) Loans

The Bank of Industry is one of the go-to places for entrepreneurs looking to fund small and medium-scale businesses. What makes BOI stand out is that it’s focused entirely on supporting businesses — not personal loans.

Why you should care:

• BOI doesn’t just hand you money; they also offer guidance on how to use it well.
• Their interest rates are lower than most commercial banks.
• Repayment periods are often more flexible, giving you room to grow your business before being pressured to pay back.

What to know:

• You’ll need a solid business plan.
• You might be asked for collateral, depending on the amount you’re requesting.
• The process can take some time, so it’s not for emergency funding.

Types of entrepreneurs it fits: Manufacturers, agro-processors, tech startups, and businesses in value-added services.

2. Development Bank of Nigeria (DBN)

The DBN doesn’t give out loans directly to individuals, but it works through other financial institutions — mostly microfinance banks. So, if you apply for a loan through one of DBN’s partners, there’s a good chance that the funds come from DBN.

Why you should consider this:

• The interest rates are usually friendlier.
• It supports both new and existing businesses.
• You can get up to N10 million or more depending on your business type and history.

Good for: Small businesses in various sectors — from agriculture to trade, services, and light manufacturing.

3. LAPO Microfinance Bank

If you’ve ever walked around a market or spoken to small shop owners, you’ve probably heard of LAPO. It’s one of the most popular microfinance banks in Nigeria and a top choice for small-scale entrepreneurs.

Why LAPO stands out:

• Loans start from as little as N30,000 and go up depending on your track record.
• No heavy collateral needed for the lower loan amounts.
• Ideal for market women, small retailers, artisans, and startup founders who are still finding their feet.

What you need:

• Proof of regular income or business activity.
• Guarantors (for some loan categories).
• A good repayment history if you’re a returning borrower.

4. NIRSAL Microfinance Bank (NMFB)

This bank became more popular during the COVID-19 lockdowns when they rolled out the federal government’s intervention loans. But they’re still offering business loans today under various programs.

What makes NMFB worth checking out:

• They run the AGSMEIS loan program (Agric, Small, and Medium Enterprise Scheme), which offers up to N10 million with single-digit interest rates.
• They also manage the Targeted Credit Facility for businesses affected by economic shocks.
• No collateral for some loans.

Things to prepare:

• A registered business (CAC certificate is often needed).
• BVN and valid ID.
• Business plan or summary of what the funds will be used for.

5. SMEDAN Loans (Small and Medium Enterprises Development Agency of Nigeria)

SMEDAN mainly supports small businesses with training and access to finance. They’ve partnered with banks and private lenders to give out loans through various programs. While SMEDAN itself may not give you the loan directly, they help you access funding with less stress.

Why SMEDAN is helpful:

• They connect you to the right kind of funding for your business size.
• You’ll get business support and sometimes mentorship.
• Often, you get access to loan facilities without the usual harsh requirements.

Who it helps the most: Early-stage entrepreneurs, especially those in need of training and guidance as well as funding.

ALSO READ: 7 Best Nigerian Fintech Apps for Investments

6. Commercial Bank SME Loans

Several banks in Nigeria offer business loans, especially for SMEs. Some of the most active ones include:

• Access Bank: Offers SME loans, working capital loans, and even specialized options like W Power loans for women.
• GTBank (now GTCO): Provides QuickCredit for businesses.
• First Bank: Offers SME funding and business support services.
• UBA: Has a range of SME loans including asset financing.

What to expect:

• Higher interest rates than government-backed options.
• You may need collateral or a guarantor.
• Best suited for entrepreneurs with some track record and bank history.

7. Fintech Loan Platforms

These days, you don’t need to walk into a bank or dress formally to get a business loan. Fintech companies have made funding much more accessible — especially for entrepreneurs who need quick, short-term cash.

Popular platforms include:

• FairMoney
• Carbon
• Renmoney
• Aella Credit

Why fintech works for entrepreneurs:

• Fast application process — some loans get approved in minutes.
• No collateral.
• Can be done entirely from your phone.

Downsides:

• Short repayment periods.
• Higher interest rates compared to other options.
• Best for small capital needs or emergencies — not for large expansion projects.

ALSO READ: How To Qualify For A Business Loan In Nigeria

8. Tony Elumelu Foundation (TEF) Entrepreneurship Programme

Though this isn’t a loan in the traditional sense, the TEF Programme deserves a mention because it provides seed capital of up to $5,000 (over N7 million at current rates) to selected African entrepreneurs. It’s technically a grant, not a loan — and that’s even better.

Perks:

• No repayment needed.
• You also get training and mentorship.
• Open to startups and even just ideas (as long as your pitch is solid).

What you need:

• A strong business idea or early-stage business.
• Willingness to go through training and complete all stages of the application.

9. Youth Entrepreneurship Support (YES) Programme by BOI

The YES Programme is specifically for Nigerian youth aged 18–35 who have a viable business idea. It offers funding, capacity building, and mentorship.

What’s in it for you:

• You’ll receive training in business development.
• Access to loans with better terms than traditional lenders.
• Designed to empower young Nigerians who want to be job creators, not job seekers.

A Few Tips Before You Apply for Any Loan

1. Know exactly how much you need. Don’t take more than you can manage.
2. Read the terms carefully. That interest rate might look low, but what are the hidden charges?
3. Have a repayment plan. This is business, not free money.
4. Build your credit history. Even if you start small, consistent repayment opens doors to bigger loans.
5. Register your business. A CAC certificate increases your credibility and eligibility.

ALSO READ: How to Apply for Government Business Loans in Nigeria