“I believe that unlocking access to capital for our deserving members is key to improving our law practices, increasing revenue generation for lawyers, and overall bettering our professional lives. We have set up access to finance scheme for lawyers who may require loans, at single digit, or less than the market, interest rates, for their working capital and operational needs.”
On 19th December 2021, the President of the Nigerian Bar Association, Mr. Olumide Akpata, in his email to members of the association, broke the news about the setting up of an access to finance scheme for lawyers. The joy with which I received the news cannot be adequately captured in words. You will recall that the theme for The Business of Law Conference 2021 was; Law Practice: Funding and Finance. We deliberated extensively on the need for access to finance for lawyers and I couldn’t be gladder to see this manifest in less than a year.
It is with the same joy I have decided to outline a few things you should consider before applying for the fund.
1. Your Credit Worthiness: Before purposing to take this loan, you need to carry out an assessment of your personal or firm’s creditworthiness (as the case may be). Creditworthiness measures how likely you are to repay your debts. The higher the likelihood, the better your chances of obtaining a loan. NBA will carry out an assessment of your financial health or your firm’s financial health to determine the associated risk and probability of repayment. This would inform the decision to loan you the money or otherwise. Hence, before deciding to obtain the loan, you need to assess your payment history, clear outstanding debts (if any), and have a strong credit report.
2. Your Risk Appetite: Risk is the chance that your investment’s actual return may be different from what you expected. It involves the possibility of losing some or all of your money. Can you withstand this? Do you have contingencies in place to repay the loan if your investment into your practice doesn’t yield the desired result? Does taking a loan fall within the ambit of the risk you’re willing to take in pursuit of your objectives? These are expedient considerations that must be undertaken before arriving at a decision to take the loan. If your answers to the questions posed above fall in the negative, then you need to reevaluate your decision to take the loan.
3. A Want or A Need: Do you really need the loan? What can you do with N2m? Are you considering the loan for capital expenditure or operating expenditure? But definitely not recurrent expenditure – don’t take a loan to pay emoluments. Essentially, the loan must be expended towards developing your law practice in a way that yields better returns for your firm.
4. Repayment Plan: What’s the present state of your practice? Can your practice repay the loan? This seems like an obvious point, but it’s important you plan out how you intend to repay the debt. This is perhaps the most fundamental consideration to make before taking the loan. Taking a loan is easy, repaying it is the difficult part. You must have a concise repayment plan for the loan.
Finally, remember, a copy of your call to bar certificate will be deposited while accessing the loan. You don’t want your name or certificate flying around social media as a debtor.
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