Loans - 5 Safer Alternatives To Borrowing From Commercial Banks

Temitope

Temitope Akinola
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Banks are generally saddled with the responsibility of making loans available to customers whenever the need for a loan arises. However, since the 2008 global meltdown, banks have slowed down on giving out loans and have indirectly discouraged borrowers from accessing loans by enforcing more stringent loan terms and conditions, increased pricing and time lag between application and approval of loans.

Recent studies and researches however have shown that apart from banks, people in need of financial assistance in the form of loan can exploit the following safer alternatives to bank loan:

Microlending

Microfinance Banks have over the years offered a safer escape routes for individuals and organizations seeking loans. MFBs have a faster turn around time (TAT) and lower interest rate if compared with megabanks. Also, their conditions precedent and conditions subsequent to loan disbursement are more flexible in Microfinance banks.

Supplier credit

This option applies to wholesalers, retailers, transporters and so on. As a wholesaler and retailer, instead of experiencing delays and facing stringent loan conditions from commercial banks, you could approach your line supplier to give you goods on credit and after selling them, you pay your supplier back. A transporter can take vehicles on hire purchase and pay back in instalments.

Sales of assets

Assets like cars, buildings, machines and so on can be sold and converted to cash if they are of no use to anybody that needs loan facility. This alternative is a faster means of raising funds and is safer than taking bank loan.

Borrowing from friends and family

Rather than approaching banks for interest yielding loans, one could approach influential and well to do friends and family members for financial assistance. Funds sourced through this means are easier to get and they come with no interest. As regards this means, it is strongly advised that fundraisers should endeavour to pay back the borrowed fund as at when due as this builds trust in case of subsequent borrowing.

Online lending platform

In addition to the alternatives highlighted above, loans can be alternatively sourced online as various online channels have evolved in recent times. Loans can be accessed from lending club, online lenders alliance, GADcapital.com and so on. Though this loan access avenue services borrower in the developed countries at present, it will soon be extended to Nigeria.
 
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