Are you a business or an entrepreneur in need of capital to deliver services, expand or improve your business? Look no further, Bank of Kigali is offering two financial products that will greatly benefit businesses by giving them access to quick credit to achieve business goals without getting into a cash crunch.
BK’s Equipment Loan product is a game changer in the banking sector, where businesses are able to secure loans to procure equipment to grow their business and improve service delivery in a quick turnaround.
According to David Bizura, the Regional Business Manager at Bank of Kigali, the Equipment Loan is a unique product which many people might not know about but it is a special loan that BK offers and has proved to be vital for businesses which want to grow their portfolio or expand what they do in a short time.
“Anyone with a profitable business, whether you are in the music industry or you run a hotel and you want to procure equipment, this is a loan that can help you grow and expand. All you need to show the bank is how this equipment will improve your business,”
“For example, if you want to revamp your music studio or get the latest music equipment, or if you want to furnish your hotel, the bank does an assessment to see how feasible the project is and the ability to pay and the loan is approved,” Bizura explained during the ‘BK Time’ segment which airs on Isibo TV every Sunday.
Some of the equipment you can secure a loan for include music or sound equipment, office equipment like computers, printers and office furniture while hotels can acquire loans to procure furniture, kitchen equipment and any other equipment they may need to make the business more profitable.
According to Bizura, there is no limit as to what one can request, it is determined by the size and income of the business.
“All you need is an application letter, a list of equipment you need and the cost, detailed explanations of how the equipment will make your business profitable and a financial statement covering six months for applicants who have not been our regular clients,”
“For new clients, we observe the performance of the accounts of the business for at least six months to make a decision. Once we see that the business is doing well, it helps us to make a quick decision to approve the loan request,” he explained.
For companies, the application is accompanied by a signed board resolution or letter affirming that the loan request has been approved, plus the list of the equipment needed.
Equipment loans are given on the standard interest of 17.5 percent per annum and there is no limit as to how many times companies or entrepreneurs can apply, as long as they prove their credit worthiness.
In yet another banking milestone, BK has come up with more innovative loan products, particularly targeting businesses and entrepreneurs to stay the course, with loan financing based on Local Purchase Orders (LPOs) or contracts for service provision.
Bank of Kigali’s LPO Financing allows businesses that have obtained purchase orders/letter of Award to deliver goods and services or carry out contractual works, to acquire loans to ensure that they have the much-needed capital to stay in business.
The service particularly targets entrepreneurs who are contracted to provide services and they are paid after. As long as they have the LPO or contract, they can get financing of up to 70% of cost of items to be supplied or the tender.
According to Emmanuel Bahizi, the Corporate Banking Manager at Bank of Kigali, the bank conducts a quick due diligence to verify if the contractor has a clean record, including having no tax issues or reputation challenges in their area of operation and the credit line is quickly approved.
“This is a service that is beneficial to people or businesses with a tender to supply certain goods or services but they need a certain amount of money to deliver. Once we assess all the requirements, Bank of Kigali, as the biggest bank in Rwanda has the means to finance up to Rwf40bn or more,”
“Even if the order requires much more than that, we work with other banks to finance the project as the lead bank,” Bahizi says.
An applicant can get a maximum period of 90 days depending on the terms of the LPO or contract. The requirements include a copy of LPO from the government, parastatal organization or reputable company, a proforma invoice or quotation of items of purchase from the supplier and adequate collateral.
The risk assessment and approval of the loan can be completed in about two weeks to facilitate the entrepreneur or service provider to accomplish the task. The interest ranges between 16% to 18% depending on the nature of the contract.
“This is a service we developed for Rwandans as a Rwandan bank which strives to transform the lives of the Rwandans, while playing our part in national development,” Bahizi says.
The two loan products are part of Bank of Kigali’s business loans which the bank offers to make it easier for its business clients to acquire short and medium-term credit loans to keep their business running until the next pay-check.
Whether you’re a contractor, a trader or a shopkeeper, Bank of Kigali has tailor-made services that suit your needs.