Getting a bank loan can be a tedious process in Nigeria, especially as a small business. A big investment is only worth it when there is an immense return of investment, not just in the imminent value but enough to use as collateral when obtaining a loan. In determining how land is an obtainable collateral, we should first define what collateral is.
A collateral, is an asset that a lender accepts as security for a loan. If the borrower defaults on the loan payments, the lender can seize the collateral and resell it to recoup the losses. More simply said, banks or financial institutions can only provide secured loans if they are provided with collateral amongst other requirements as an assurance of possible reinstatement in the case of loss.
Land as Collateral
When it comes to obtaining a secured loan from a bank, collateral must be supplied before securing a loan. Land can be a powerful form of collateral if you need to acquire a secured loan. Banks want matching collateral, so the amount you want as a loan is dependent on the collateral you can provide. This is where land as a collateral comes in, as an appropriate security to secure the funding you require.
Nowadays, you can list your land as collateral without much hassle. A qualified expert simply assesses the value of your land, then proceeds to transform your property holdings into qualified collateral.
Understanding collateral possibilities
Once the value of your land has been determined, the bank will be able to provide you with loan terms that you can either accept or reject as you see fit. In start-up businesses, a commonly used source of collateral to obtain a loan is the equity value in real estate. Getting a bank loan approved is not always the easiest process. In light of recent economic troubles across Nigeria, Banks are looking for a lot more than fickle collateral security.
As a final note, buying land from LandWey could provide you with substantial collateral that provides you get the loan you need, particularly in situations where you might be seeking a long term loan to start up a business.