How to Secure Business Loans in Kenya for Your Startup


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Securing the necessary funding is one of the main challenges entrepreneurs face when starting a new venture. In Kenya, several financial institutions support startups through various business loans. This article will guide you on securing business loans in Kenya for your startup.

Understanding Business Loans in Kenya

A business loan is a loan specifically intended for business purposes. It involves borrowing money from a financial institution, which you agree to repay with interest over a predetermined period. These loans can come in various forms, such as overdrafts, term loans, or asset financing.

Various institutions, including commercial banks, microfinance banks, and online lenders offer business loans in Kenya. These loans can be unsecured or secured. Secured loans require collateral, such as land, buildings, or other assets. On the other hand, unsecured loans do not require collateral but may require a personal guarantee from the borrower.

So, how can you secure a business loan if you are a Kenyan startup?

Identifying the Right Type of Business Loan

Different types of business loans in Kenya are designed to cater to diverse business needs. Before applying, consider what you need the loan for and identify the correct kind for your needs.

  • Term Loans: These are loans given for a specific period, typically for purchasing capital assets with long functional life, like machinery or buildings.
  • Overdrafts: These short-term loans allow you to withdraw money from your account, even if overdrawn. They can provide working capital for your business before income is realized.
  • Asset Finance Loans: These are loans used to purchase assets for your business, such as equipment or vehicles. The support itself serves as the collateral for the loan.
  • Invoice Discounting: This loan is based on your business’s outstanding invoices. The lender will provide funds based on the value of these invoices.

Requirements for Business Loans in Kenya

Securing business loans in Kenya requires you to meet specific criteria set by lenders. The requirements differ from one lender to another but commonly include the following:

  • A valid business license: This proves your business legally operates in Kenya.
  • Business plans and projections: Lenders will want to see that you have a solid plan for your business and its future.
  • Credit history: Your past borrowing and repayment behaviour may determine your eligibility for a loan.
  • Security: For secured loans, you’ll need to provide collateral.

Steps to Secure a Business Loan in Kenya

Step 1: Determine Your Needs – Assess your business needs and how much you need to borrow. Avoid the temptation to borrow more than necessary.

Step 2: Choose the Right Lender – Research the lender that best fits your business needs. Consider the interest rates, repayment period, and other loan terms.

Step 3: Prepare Your Documents – Gather all necessary documentation. This typically includes a business plan, financial statements, and business license.

Step 4: Apply – Submit your application to your chosen lender. Be sure to fill out all the necessary information to avoid delays accurately.

Step 5: Follow Up – After submitting your application, follow up with the lender to check on your loan application status.


Securing business loans in Kenya can be a pivotal step towards starting and growing your business. By understanding the types of loans available, the requirements, and the application process, you are better equipped to secure your startup’s financing. Do your due diligence and choose the loan product that best suits your business’s needs. Remember, your business’s success relies heavily on sound financial management, and this starts with how you handle your loan.

Simon Mwangi
Simon Mwangi
Simon Mwangi is a finance expert and talented freelance writer with a background in banking and accounting. He simplifies complex financial concepts and produces top-quality content on various topics. Follow him on Linkedin to stay up-to-date on his work and connect with him.

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