Negotiating Your Way Out Of Bad Loan

Once in a while, there may be a need to borrow money to finance an import, purchase goods for resale, finance the purchase of a car or even pay for your house rent. While borrowing money may be easy to obtain in some cases paying back can become a huge burden if not managed properly. This may be due to reduction in your earnings leading to your inability to service the loans properly. This makes the loan a bad one and in most cases, can lead to financial bankruptcy with the lender taking over your prized possessions. Gladly, this can be avoided with the power of negotiation. Here are some simple steps that can help you get out of a bad loan.


1. Don’t be afraid to inform your bank of the difficulties you are facing


Businesses face good and bad times, which mostly have to do with factors beyond the control of the borrower. So when you think your finances are short and may not be enough to repay your loans when they fall due, inform the bank of your predicament without using the word “default”. Let them know external factors beyond your control are causing setbacks to your finances which is not likely to continue in future. Also inform them that you are working extremely hard to put things in place so that your income is not adversely affected by economic realities.

2.  How much can I possibly pay the bank now?

You must first identify what your average cash flow is monthly, assuming your loan is serviced monthly. For example, if at the time you initially obtained the loans your cash receipts was N150,000 and you paid the bank N100,000 then it means you had a debt coverage of 1.5 times. If now your cash receipts has dropped to N100, 000 and you wish to maintain your debt coverage of 1.5 times then it means you will be looking to repay the bank N66, 666.66. You may also revise this down to N50, 000 just to give you a buffer in case of downturns as the bank may not be willing to restructure your loan again. In the example above, by reducing your cash payment to the bank, you have basically increased the tenor of the loan as well as interest payments.

3.  Approach your bank

Set up a meeting with your bankers and make sure it’s a friendly and cordial setting. Tell them your plans in the clearest form and give an impression it’s an honest and well thought out plan. Make them understand how a restructuring of the loan is the best option and how it is a “win-win” situation for the bank and you. They may come with their own proposals, which may or may not be better than yours. Whatever the case just remember the initial objective is to avoid default and ensure your business is kept running.


4.  Forward an official letter to the bank


After you must have concluded negotiations with your account officers, you should now write them officially requesting for a restructuring of the loan. Refer to your discussions with them and include the terms you had suggested above even if they did not agree with it. Sign the letter and make sure you get a dated and stamped acknowledgement copy.


5.  Post restructuring


Once your offer has been approved, the bank will give you a restructured facility with terms and conditions. Make all efforts to read the fine prints as banks notoriously embed details in it that may not be in your best interest. Ensure you look out for the following

** Tenor – Make sure it’s the number of years/months you mutually agreed with the bank.

** Interest Rate – Always check that interest rates are tied to benchmarks.
Sometimes they tell you its “subject to market conditions” or “MPR plus 12 per cent”. Accept the latter as they make for easy management of your costs. Also make sure your offer rates are competitive. To make sure, consult your accountant or friends in other banks to find out what market rates are.

** Fees – When you are restructuring, the banks typically will charge you a “restructuring fee”, “management fee” and facility fee”. Restructuring Fee is a one off payment and can range from 0.25 per cent to one per cent of the loan. Always negotiate for 0.25 per cent or lower. It is possible if you make them understand you can’t afford it. Whatever the case, strive for a total fee that will NOT cost you more than 0.5 per cent per annum cumulatively.

** Security – Make sure the security (collateral) they are asking for is what you agreed with them during negotiations. Do not for exigency accept terms that may result in the mortgage of your future. Your loans should be relative to the risk it bears. For example, you do not put up your house as collateral for a car loan.

** Caveats – There are usually loads of clauses and caveats that are found under “Other Conditions”. It can be burdensome to read but since it’s your financial health on the line, I suggest you read them.
Sign a copy of the offer and keep an original for yourself


Explore ways of improving your financial situation to ensure your cash receipts increase or at worst remain sustainable. If you are an employee who took a consumer loan, then you may have to seek for a higher paying job or cut down on expenses to ensure you are financially healthy. The last thing you want is a repeat.

Whilst these are basic steps to guide you, it is advisable to consult your financial adviser.

Credit:  UGODRE OBI-CHUKWU

Neglected Ways Of Marketing

People commonly use the conventional means to market their products/services neglecting these result-oriented means of advertising outline below:

Social Networks

Sites like Facebook, Twitter and YouTube offer a lot of space to say who you are and what you do. Even if you use these social platforms for personal use only, why miss the opportunity to remind your friends and family what you offer? On your profile headers, add photos of you at work, your company logo or your recent book jacket, instead of a photo of your dog or a pretty sunset.

Social events

Getting out of your comfort zone sometimes means getting out of your current networking circles. Attending high-profile events where media and decision-makers are mingling can earn you free publicity and build your profile as someone who is involved in notable areas of influence.

Giveaways on social media

Social media offers the opportunity to share information and resources and also sell your services or product. Instead of traditional coupon or sales campaigns, consider giveaways. Yes, free stuff! Offer your product or service for free (for a limited time) to generate awareness. And create a separate landing page or phone number to track the direct response from this campaign. Then repeat as necessary, to keep the momentum going.

Online reviews

Every review a customer or visitor to your store leaves should be responded to, not just the negative ones. Responding to positive reviews with genuine appreciation shows you are paying attention to your customers. Responding to negative reviews shows that you care and feel bad for letting a customer down. Don’t use your response as an opportunity to sell; just respond to reinforce your company’s values. This is great marketing!

Video

The use of video is growing every minute. In a recent research study, Invodo found that almost 75 percent of current online traffic will come from video within the next two years. This means that traditional forms of marketing, such as direct mail and email marketing, will need to focus on video to grab the attention of users online.

YouTube hosts videos that have high-production quality and videos that look self-made. With good reason: Companies that are successfully using video to showcase their teams at work and play, highlight product demonstration or give virtual tours of their offices are seeing a high ROI.

High-quality videos certainly have a home on YouTube, but so do the organic “real world” videos that cost a lot less and pack a lot of punch.

In summary, "Always Be Selling." But, today, savvy businesses focus on reputation management, positioning and marketing to get in front of potential buyers. Along with clever uses of their logos.

@entrepreneur

Practical Guide On How To Start Diesel (AGO) Distribution/Marketing In Nigeria


Recently Updated


Oil and gas business is one of the most lucrative business in Nigeria. People are making billions of naira annually and the money in the industry just seem endless! Supply of Diesel also known as AGO (Automated Gas Oil) and Lacasera(cooked oil) is one of the most profitable business in the Nigerian oil and gas industry.

 As usual, I am going to share the findings with you so that you too can tap from the wealth in this sector.


Reasons Why supply of diesel is a good business

You know the quality of power supply we currently get in this country? It is nothing to write home about! All the giant diesel generators that power most of our industries run on diesel. MTN alone is said to have over 6,000 diesel generators that power all their base stations across the country and they run on average of 20 hours daily.

If each of those generators consumed 50littres for the 20 hours daily, that will be a total of 50 x 6000 = 300,000 Litres of diesel daily! In a month, MTN generators alone would have consumed 300,000 x 30 = 9,000,000 Litres of Diesel. What a waste!

Now multiply the above figure by all the four GSM Network operators in Nigeria, all the twenty something banks and their branches, tractors and caterpillars of construction companies, all the factories, all the agencies and organization, all the media houses, and all the homes that runs almost 24 hours on generators! Needless to tell you that billions of litres of Diesel are avoidable burnt everyday in Nigeria.

In business and supply sense, the best product to deal on is the product that is in high demand. That makes diesel product one of the very product of choice when it comes to Nigerian oil and gas supply business.

Another good thing about Diesel supply business is that it is less complicated and less expensive compared to that of PMS because – Diesel is easier to store and transport due the fact that it is less flammable, unlike PMS that could catch fire from a distance and requires more elaborate storage system that cost fortune.

One of the best part of the business is that you basically do not need to store the product, all you need to do is to market your customers and supply on demand, cash your money and smile to the bank! You can even do the business on a small scare without keeping an office. However, to operate on the standard we are talking about, you must get an office. Don’t get me wrong – Diesel business is a serious business and requires careful planning.

If you get it right believe me, there is millions of naira waiting for you in this business – the issue of profit is like 120% guaranteed. Go ahead and invest provided you have the required capital.

Profit potential for Diesel Supply Business

Just like every good business, there is money to be made in Diesel supply and profit is always there. We are going to base our calculation per litres per truck. You can get 33,000 litres of Diesel from major distributors and NNPC at N2.5 at the unit cost of N78 per litres.

A truck of 33,000 liters of Diesel to retailers like Filling Stations supplied at unit cost of N88 will give you a profit margin of N10. In that case, you will be generating profit of 33,000 x N10 = N330,000 from each supply. That is the lowest profit you can make – profit for 33,000 litres are sometimes up to a million naira.
When you multiply that to how many trucks you are able to supply in a month, you will find out you are in money. The secret to success in diesel supply business in marketing. Expand your horizon, talk to as many companies and individuals as you possibly can. The more you supply, the more profit you make.

In all, a medium scale Diesel supplier that puts everything properly in place makes between 3-5 million naira monthly after expenses. Isn’t that great? 5million naira monthly is a good business by all standard, so go ahead and give it a go!

Related Post: How to start oil and gas marketing/distribution in Nigeria easily

The figure above gives you idea of what is obtainable! It is by no means the final figures, prices can change and some other factor may come into play. However, everything remains relatively within the estimated range.

The Requirements for starting Diesel Supply Business

The requirements I'm talking about is the things you need to put in place to ensure a smooth starting of your business. Let us take it one after the other and see how it goes.

1. Register your Business – You need to Register your business either as a Business Name or Private Limited Company. Registration is very important in your business.
Some companies may not want to deal with non traceable individual. If you don’t have a registered company, you may loose out from their deals.
When your company is registered and with a permanent office, people feel more relaxed to do business with you because they know a place they can fall back to should they need to contact you physically at anytime. That is very very important in business.
Again, you have a place you refer people back to when negotiating a deal, something like – My company is DillionWorld (Resources) Int'l Ltd. Our office is at No. 4b Sagbama Close, Port Harcourt. Then people know you are serious in business.
See how to register your company online with Corporate Affairs Commission here().

2. Invest in Brand Equity – This is really not official requirement but very necessary if you hope to Stay Ahead of Competition in your business. Your name do not make much impression as your brand, it is the brand that people get attached to in any business. When you think of MTN what immediately flashed into your mind is the Yellow square logo – Isn’t it?
In this part of the world, people tend to look down on branding while some do it very poorly. Branding is even more important than the business itself, good branding will go a long way to lift your business.
Get professional Graphic artists and brand experts to work on your company’s brand. Let them design professional logo for you and other things like your company letter head, business cards and stationary. Open a corporate account with your registered company’s name, etc. These are very very important in any business too.
The importance of these in your Diesel supply business is that when you present business proposal to your would be clients, every thing will look professional and that helps make very good first impression which is vital for winning contracts.

3. Purchase your Truck(optional) -  You can always rent one from haulage companies or the supplying company can as well use there's. However, buying yours is more beneficial and cost effective at the long run. A good truck/ trailer head from Germany or anywhere from Europe cost about 7Million Naira. If you can't get one, go for hire while you save money and buy later

Source for your Diesel Product

To start with, we are also supplier/ distributor of Diesel( AGO and Lacasera) in Nigeria.
There are two major places to buy your product: From Major distributors like Mobil, Texaco, Oando, Total, Conoil, etc... They are major importers of the product and are always looking for distributors. In most cases, they always have the products available though at a higher prices.

The second one is NNPC. They are like the ultimate in terms of prices but not for availability anyway. Approach these two major sources and negotiate your way.

The ultimate when it comes to Diesel importation in Nigeria happened to be Zenon Oil. You can buy your product from Zenon.

Latest Trend!
 The product is said to be very cheaper in Niger Republic. Some fuel importers import their diesel from the Soraz refinery in Niger at cheaper rate and sell to distributors within the North. If you have your own truck and logistics, you may give it a try, buying from them up North at cheaper rate especially if you are from the North. Else, you may just make do with the others (Zenon, NNPC and Major Distributors) for convenience and security.

Once you have the product aspect covered, your major assignment is marketing. Reach out for potential buyers. Make advert on the daily newspapers and online.

Note, because of the issue of hacking, we advice that you use well protected email account, such as gmail and yahoomail, but not email with your website domain.

Need To Know More?
We have prepared training manual(ebook) on how to start this business and general oil and gas marketing/distribution. The manual also teaches how to setup your own mini oil company easily, were to get the products cheaply, and above all, you will also learn how to start this business without cash.
The manual cost N8,000 only.

Contact: +2348035217265; +2348138373847.
tochukwudike@gmail.com
customercare.dillionworld@gmail.com







Credit: D. Omeh

Starting And Growing Your Innovative Business In Africa

In this exclusive interview we catch up with Christian to find out what drives him to continually achieve, and how does he identify potential business opportunities in Africa

Prince: Can you describe Madlyn Cazalis, and the idea and concept as if I knew nothing about it or the market?

CHRISTIAN: Madlyn Cazalis is an organic cosmetic brand. The company was created in Cameroon in 2012. Why is it organic? Because we use at least 90% of natural ingredients to manufacture the products.

We produce oils, creams, scrubs, lotions, soaps using plants and fruits such as aloe vera, lemon, cucumber, cocoa butter, shea butter and coconut. We launched an African-owned original product and want Madlyn Cazalis to become a major leading consumer good company in Africa.

Prince: Describe the experience of transitioning from being an employee to an employer?

CHRISTIAN: Transitioning from employee to employer is not that easy because you have to find the courage to leave your comfort zone and embrace new challenges.

I had 6 months of reflexion asking myself: what do I want for my life? What are my dreams? How do I want to live in a few years? What’s the kind of lifestyle I want? I wanted to work on my own challenges; I wanted to have time to see my friends, my family or my girlfriend. One day I just took the decision and I decided to resign.

Prince: What were your accomplishments in your previous jobs that gave you the belief in creating success out of Madlyn Cazalis?

CHRISTIAN: I had an experience in strategy and corporate finance. Working as an investment banker associate, I was used to analysing different company strategies in numerous sectors. I was excited when learning about different industries. This gave me the belief that I could create my own venture.

Prince: You were educated in France. Did this have any influence on you starting a business, and having the ability to make it successful?

CHRISTIAN: I had the chance to study in the best schools in France, I really wanted to study management, financial engineering and international business.

I think I received all the tools to become my own boss. But, I don’t really think being educated or being educated in France makes me better than someone who didn’t have these opportunities. And you know what? Some of the greatest entrepreneurs on earth dropped out from school.

Prince: And do you think Education in Africa motivates and equips African entrepreneurs?

CHRISTIAN: There are good schools that teach management and engineering in Africa, but in my point of view, I don’t think schools have the entrepreneurship culture. Many students are more prepared to be a brand manager, a risk officer or a controller than being an entrepreneur.

We really have a problem, especially in French-speaking African countries, as we don’t have enough role models. Youth need more role models to succeed. This will motivate them to launch their own companies.

Prince: What convinced you to return to Africa, and what goals did you set out to achieve?

CHRISTIAN: African business is booming. Africa has incredible potential with a young dynamic population. I wanted to be part of the movement. My goal is to create a leader, a major international African brand such as MTN, Dangote Cement and Ecobank. There is a lack of African famous and recognizable brands. We want to be a leader and we want other Africans to create leaders.

Prince: How did you conceive the idea of starting a cosmetic company, and what problems did you set out to solve?

CHRISTIAN: African women love cosmetics and the sector grows by 10% each year. The offer of natural cosmetic products is reduced and so many local industrials distribute whitening products. We want to educate women, preventing them from using bleaching lotions, creams and oils. Too many of these products are dangerous for health. Madlyn Cazalis USP is that we provide quality products and services.

Prince: How do you deal with competition with other organic cosmetic products?

CHRISTIAN: The cosmetic sector is very competitive but we are just at the beginning of the organic cosmetic trend in Africa. This market is already mature in U.S. and Europe, with countries such as France and Germany. We create a new offer and provide a lot of services: free delivery, dermatological advise, fidelity cards and selective distribution.

Prince: What’s the most fulfilling and rewarding part of what you have been doing?

CHRISTIAN: I think the most rewarding part is being regularly honoured and receiving international awards for my work. It gives me the courage to pursue my dreams. When you observe your company grow and people say that they love your products, it’s a beautiful reward too.

Prince: What challenges have you faced during these periods?

CHRISTIAN: I faced a lot of negativity, administrative burden and loneliness in front of giants with a lot of financing power. David vs Goliath is very challenging but it is also a beautiful experience.

Prince: Where are you taking Madlyn Cazalis Group to in the next few years?

CHRISTIAN: In the next few years, I want Madlyn Cazalis to be well installed in Central and West Africa. We receive mails from potential customers from Nigeria, Ivory Coast, Senegal, Gabon and Congo. We are preparing ourselves to be a leader in African cosmetics. We also want African customers to benefit from Madlyn Cazalis wonderful natural skincare effects.

Prince: You have a fight against Bleaching, what advice would you give Africans who indulge in this activity?

CHRISTIAN: I would say, stop using bleaching products, stop complexes, and stop damaging your beautiful skin. Be proud of the beautiful skin God gave you. A lot of men and women don’t even know these products contain poison, corticoids and mercury to name a few. Our job is to educate them. Dark skin is beautiful.

Prince: How do you translate your experience into mentorship through the Goldsky Partners?

CHRISTIAN: A lot of young people are lost. They have ideas but don’t have guidance. I take this opportunity to share my experience and mentor them to achieve their goals. People need to know how you did it, what were your challenges; they need to gain courage from your experiences. A lot of young people need it.

Prince: What potential do you see in other young African entrepreneurs?

CHRISTIAN: Young African entrepreneurs have a lot of potential and they have a lot of ideas. We see a lot of young start-ups emerging in Africa. We see a lot of initiatives in Kenya, Nigeria, Ghana, Cameroon and South Africa. I have to underline the fact that African French-speaking countries are way behind the other African countries, because we don’t have this entrepreneurial culture.

In Nigeria and Kenya, there are more initiatives to encourage young African entrepreneurs, more business angels, more private equity funds, more incubators, and more competitions. I think we need more initiatives in countries such as Benin, Burkina Faso, Ivory Coast, Chad, Niger and Congo.

Prince: And which industries, and lucrative business areas do you think will provide future business opportunities for African entrepreneurs?

CHRISTIAN: Almost all industries could provide future business opportunities for African Entrepreneurs: Industry, Telecommunication, Energy, Consumer Goods, Agro-business, Education, Technology…there are too many opportunities, but we don’t have enough international significant actors in these fields yet.

Prince: Between Africa and Cameroon, which has always been your priority and why?

CHRISTIAN: Africa Is my priority, but right now, I’m focused on Cameroon. Madlyn Cazalis has pan-African ambitions but we are doing things step by step. We need to show we are the best here before taking over other countries. But, be sure Madlyn Cazalis will be the pan-African brand you want to see.

If you want to know more about what Christian is up to CONNECT

Website: madlyncazalis.com

Do you have an inspiring real  story, you can reach us on 
+2348035217365
+2348138373847.
tochukwudike@gmail.com, customercare.dillionworld@gmail.com, tdillion@yahoo.com, info@dillionworld.com

Things To Know Before Going For A Business Loan

Every business owner and entrepreneurs need money for a variety of reasons, but many are unrealistic about how much money they really need. The point of a loan should be to help your business get to the next level, not the next ten levels. It’s also not a substitute for generating income or a permanent crutch -- people that see it as such are likely in much more trouble than they realize when contacting a loan broker.


Before getting too deep into the process or too excited about the prospect of a huge business loan or SBA loan, take a step back and ask yourself these questions:


Will you make enough income from the loan to be able to comfortably pay the loan back over time?


Related Post: Preparing effective business plan for loan

Do you understand the financing options? Protect your business by reading all terms carefully and be aware of the price you pay for "quick and easy" loans.

What are your goals for the next year? Know your business plan and where your venture is realistically headed in the future to protect it from other unnecessary expenditures.

A serious reality check is vital for entrepreneurs of all business stages. But because many are risk takers and dreamers by nature, small-business owners often let visions of grandeur cloud their judgment when considering how much money to borrow, thinking they need a warehouse of their own, machinery and materials at the ready, a marketing and PR guru to help propel their business. Most of these assets are not immediate or crucial stepping stones to launching a business.

For instance, a business owner who makes a niche product would likely be better off finding a co-packing facility and looking for funding based on purchase orders than seeking out millions to build a facility. The dream for the facility is there, but the need for it is not. There is often a better, and cheaper, way to solve a problem.

 I meet many entrepreneurs who think that a loan is magical money that can be paid back whenever they start turning a profit. The shock of potentially high interest rates and short amortization periods can creep up on business owners before they even realize that payments are due. In reality, you may need to start making loan payments before the fruits of your labor have fully started yielding a profit. The decision to take out a loan, and how much money to take, is not a decision that should be made over a cup of coffee.

Instead, thinking long, hard and in smaller steps lifts the financial burden and often results in more success than being convinced that it’s all or nothing.

Inquiries:
+2348035217265; +2348138373847.
tochukwudike@gmail.com
customercare.dillionworld@gmail.com