A loan is a financial arrangement where a lender, typically a financial institution, provides funds to a borrower, such as an individual, company, or organization, under specific terms.
These terms include the loan amount (principal), the interest rate, and a structured repayment plan. Loans generally have a longer tenure, often exceeding a year, and are formalized through a contract outlining all relevant details.
Key Features of Loans:
- Credit Agreement: A legal document binding both parties.
- Principal and Interest: The borrowed amount and the interest charged on it.
- Repayment Plan: Payments may be scheduled monthly, biannually, or as a lump sum (bullet payment).
- Maturity Date: The date by which the loan must be fully repaid.
Indicative Terms and Pricing:
- Maximum Tenure: Up to 360 days.
- Interest Rate: Ranges from 12% to 18% per annum (negotiable).
- Facility Fee: 3-5% (deducted upfront upon loan approval).
Requirements to Apply for a Loan:
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1. Application Letter:
- Clearly state the amount required (e.g., “Request for USD 10,000 Loan”).
- Indicate the desired loan tenure.
- Specify the purpose of the loan, such as working capital or financing orders.
- Identify the source of repayment.
2. Company Profile:
- Provide official company documents (e.g., Certificate of Incorporation, CR14, CR6, or Constitution).
- Shareholding structure, including ownership percentages.
- Overview of related entities or subsidiaries.
- Details on business operations, market share, major clients, suppliers, and competitor analysis.
- Profiles of directors and senior management, including qualifications, experience, and CVs.
- Latest valid tax clearance certificate.
3. Financial Documents:
- Recent management accounts.
- Audited financial statements for the past two years.
- Cash flow projections for the requested loan period.
- Aged creditors and debtors analysis (if applicable).
- Confirmed purchase orders and pro forma invoices for planned expenses.
4. Security:
- Proposed collateral (e.g., title deeds).
- Professional valuation of the offered security.
5. Banking Details:
- Details of existing banking arrangements and any credit facilities with other banks (including account numbers, branch information, and relationship manager details).
- Bank statements for the past six months.
- Current account details with CBZ Bank, including branch information.
For specialized cases, such as loans related to mining or natural resources, applicants may need to include geological reports verifying resource availability. These comprehensive requirements help lenders evaluate the borrower’s financial health, repayment capacity, and overall creditworthiness.
