When It Pays to Get a Small Business Loan

Small business loan

It’s common for businesses to run into financial difficulties from time to time, especially in the early years.

Borrowing money to keep your business afloat is not ideal, but there are some circumstances where it makes sense to take out a small business loan.

When to consider a short-term loan for your business

Some situations where a small business loan would be a good option might include the following.

Business opportunity

If there is a business opportunity that would benefit your business in the future but it requires a buy-in or lump sum investment, a small business loan can provide the necessary funds in the interim.

Working capital to expand

If you want to expand your service offering but it means hiring more staff or buying new equipment, a loan can cover these expenses until the new service or branch of your business starts generating income.

Seasonal expenses

There’s often a need for additional staff or inventory over the festive season. A loan can help cover these costs upfront and can then be paid off using the additional income generated by the busy season.

Building up inventory

Launching new products and manufacturing goods rely on a well-stocked inventory. However, building up an inventory can mean a big upfront expense. This can be covered by a small loan which can then be repaid by the income generated by that same inventory.

Equipment malfunctions or breakages

Malfunctions and breakages can happen at any time and could bring your business to a standstill. In these cases, taking out a loan to cover the cost of repairs or replacements is sensible as it allows your business to keep operating.

Types of business loans

Before applying for a small business loan, take some time to consider which type of loan would best suit the needs of your business.

Bank loans

Most commercial banks in Botswana, such as FNB or Stanbic, offer small business loans. These loans are backed by larger financial institutions, but they also have much stricter qualifying criteria and can be difficult to secure.

Government funding

There are a number of government organisations that support and finance small businesses in Botswana such as the National Development Bank and Citizen Entrepreneurial Development Agency (CEDA).

They offer loans at a lower interest rate and with longer repayment periods but only to qualifying SMEs.

Asset-based loans

Asset-based loans are probably the simplest type of loan for quick small business finance.

Because they’re based on a paid off asset, such as a vehicle, asset-based loans are easy to secure, regardless of your current employment status or credit rating.

Asset-based business loans from lamna

With an asset-based loan, only the value of the asset is important, so you won’t be required to submit financial statements or business plans when applying for one. Your credit history is also not checked or affected by this type of loan.

Applying for an asset-based loan from lamna is also simple and straightforward. Contact us with information about the asset you want to use as collateral and we will give you a loan offer. If you’re happy with the amount offered, we can proceed with the application.

You’ll need to sign the loan contract, supply copies of your ID and proof of residence and the funds will then be deposited into your account immediately. Your asset will be stored securely by lamna for the loan period and returned to you once the loan and the agreed interest have been repaid.

About lamna Botswana

At lamna Botswana, we offer fast, discreet loans against the value of a wide range of assets, from luxury watches and jewellery to vehicles or valuable works of art.

For more information about using an asset to secure a short-term loan, contact us on 71 388 088 or simply complete and submit our online application form.


Complete our Online Application Form