BOI FGN Special Intervention Fund: 8 Things You Should Know Before You Apply
The BOI FGN Special Intervention Fund is an initiative of the Federal Government to provide MSMEs funding through subsidized loans. How is this loan subsidized? Well, it comes with an all-inclusive interest rate of 9% per annum.
This initiative aims to help MSMEs further develop their businesses. By so doing, it will stimulate economic activity that will result in job and wealth creation. Wondering what it takes to be eligible for this loan and how to apply? Continue reading this post to find out.
8 Things You Should Know Before Applying for the BOI FGN Special Intervention Fund
Before you apply for the BOI FGN Special Intervention Fund, here are a few things you should know:
The BOI focuses its efforts on supporting businesses in the manufacturing and processing sectors. There are a few target sub-sectors including Solid Minerals, Agro-processing, Creative Industry, Oil and Gas, and Information Technology. Click here to see the product clusters that get support from the BOI. If you don’t find your product on this list, you can reach out to the BOI technical team.
What kind of companies does the BOI finance? We must let you know at this point that this body doesn’t finance individuals or a group of people. Instead, it finances companies or enterprises. What this means is that your entity must be registered with the CAC before you can get BOI financing. During the registration process, you will be required to provide a business registration number.
What kind of items does the BOI finance? This body doesn’t finance buildings or lands. It expects that you should finance such from equity. The BOI only finances the purchase of industrial equipment that you need for your manufacturing process. Such funds are known as working capital. To access the requirements for these funds, you should visit any of the banks in partnership with the BOI.
Unlike other types of loans, BOI doesn’t disburse cash to the borrower. Instead, it transfers the funds to the suppliers or vendors of the equipment that you need. Such suppliers or vendors will then deliver the equipment to the borrower upon receipt of the funds.
The least amount of funding that you can get from the BOI is N5 million. If you need a loan below this amount, you will have to make use of the matching fund platform. The BOI operates this platform in collaboration with different State governments. You can also make use of the Bottom of the Pyramid scheme that it operates in conjunction with Microfinance Banks.
The BOI requires every loan applicant to pledge certain assets as part of its fiduciary responsibilities. Asides from properties, the BOI will also accept other types of securities. However, such securities must provide adequate cover for the loan you are applying for. These securities include:
- Bank guarantee.
- Debenture on the assets of your company.
- Legal mortgage on landed property (such properties must have a Certificate of Occupancy).
- External guarantors that have a notarized statement of net worth for any loan below N10 million.
The BOI will accept to share assets that you have pledged previously to other lenders. However, the assets must provide sufficient coverage for the new arrangement.
Usually, the BOI expects that you have a minimum of 3 years in performance track records. However, it can make an exception for a startup business based on discretion. For your startup business to be considered, you must provide proof of experience in your business area. Also, you should have qualified operational and management teams as well as a top-notch management structure.
You need to submit certain documents during the application process. The documents that you submit depend on the size of your business. Click here to find out what documents you must get ready before applying.
How to Apply for the BOI FGN Special Intervention Fund
The application process is pretty straightforward. Click here to begin your application. If you run a registered SME in Nigeria and you need funding, this is a great opportunity for you. Reach out to us in the comments section if you have any questions.