Long Term Loans are loans for financing projects and equipments or other investments that requires long term payback periods. Most companies capital projects and equipment purchase including personal home loans for individuals cannot be financed from the customer’s immediate cash flow or salaries but from projected cash flow thus the need for long term loans from banks.

Payment of long term loan can be in installments of monthly, quarterly, half yearly or annually or as may be structured to ally with business cash flow. Examples of long term loans includes Commercial Mortgage; Equipment Lease Finance; Project Finance; Operational Vehicle; Asset Finance and lots more.

Banks provides about 70 percent of the cost while the customer is expected to provide the balance of 30 percent. This and other conditions may however vary from one bank to another.

Long Term Loans For Individuals

1. Personal Loan

Personal loan is the most common type of consumer loan. It is designed for people in paid employment/self employed with proven ability to pay and to assist them meet personal finance needs. Amount eligible to largely depend on salary or amount earned on regular basis.

2. Home Loans

Home Loan A loan arrangement where an individual secures a facility with the bank to either buy a property or build one. Some banks offers joint mortgage where spouses can combine their income to finance and jointly repay their mortgage.

The other variant of Home Loan is called, Home Equity Refinance. This is an arrangement where an individual secures a facility with the bank to take advantage of investment opportunity or for other purpose and uses a property he already owns as collateral for the loan.This arrangement does not require equity contribution. The banks only provides a percentage of the value of the property to the customer as loan.

3. Home Equipment Finance

Home Equipment lease or assets finance allow an individual acquire home equipment and pay bank from his salary or cash flow from business over a period of 1 to 3 years or as structured by the bank. Like other consumer loans, amount eligible to largely depend on the customer’s ability to pay.

4. Auto Loan

Auto Loans is one of the common type of consumer loans. It is designed for people in paid employment and businesses with proven ability to pay and or good cash flow to assist them acquire new cars or vehicles of their choice for personal use. Amount eligible for largely depends on ability to pay.

Long Term Loans for Businesses

1. Commercial Mortgage

This is a finance option for companies to buy or build property/ies either for its use or commercial purpose. Organization that requires to relocate its office, buy or build for commercial purpose can key into this finance option. Repayment can be spread for between 1 to 5 years depending on the companies cash flow and the bank’s policies.

2. Equipment Lease Finance

Organizations that requires funding for its machineries and equipment has this option to key into. Just like other long term finance, the tenure may be longer than 1 year and may not be more that 5years depending on your bank’s policies and peocedures

3. Project Finance

Project Finance Facility Like Contract Finance Facility but will longer repayment period. Construction companies and commercial builders are those that takes advantage of this finance options. This finance option often time comes with moratorium to allow construction to be completed if repayment source is from the project to be financed.

4. Operational Vehicle Finance

Companies willing to acquire motor vehicle for its operational use can key into this product. The product also includes buying cars and other vehicles for official use of the top executives of the company. Repayment are spread over period of time that may not exceed 3 years depending on the policies of your bank.

5. Asset/Office Equipment Finance

This product was developed to assist businesses with the required funding for office equipment like furnitures, computers and other office equipping need. It allows the customer to free it cash flow for other immediate cash needs while spreading repayment on the assets acquired over periods of between 1 to 3 years.


It is important to note that facility name; amount eligible to, tenure and other lending conditions may vary from one bank to another.

Source. www.nigerianbanker.com

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