Startup Funding in Nigeria: 10 Ways to Secure Funds

In this write-up, you will learn about ten different ways via which you can raise capital to start your business. If you have been struggling to raise startup capital, the information provided here will be of help.

Personal savings

This can be referred to as self-help. It is one of the most basic ways to get fund for your business in Nigeria.  It involves saving up money in trickles. The period within which you can raise fund this way differs depending on how much money you are able to save. If you save much, you can raise fund fast. However, raising fund will be slower if you are not able to save much money each time.

This can be considered as the safest way to save money for your business since it does not involve borrowing. No need to worry about paying off a creditor at all. It enables you to start and run your business with complete peace of mind and grow at your own pace.

Family and relatives

This is year another reliable means of raising fund. Since you can approach more than one member of your family or relatives at once for funds to start your business, you can raise the fund required to start your business fast enough. However, this means of raising funds may not work out quite alright especially of there is no family member buoyant enough or willing enough to help out. Many of them will even claim they have their personal issues they need to spend money on and therefore cannot assist you with money to start up your business.

Friends and well-wishers

These are other sets of people that you can approach for funds to start your business.  It is also possible to raises fund for business fast this way, especially if your friend and well-wishers are well to do and are financially buoyant at the money you go to them for fund to start your business. In order to raise fund this way and to raise the required amount fast, approach many of them at the same time for fund.   Do not demand for much from them. Divide the money into small fractions and ask each of them to help you out with a fraction of the money. Buy the time you collect fractions from different places, you would have raised the fund needed to start your business.

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Philanthropic organization

Some philanthropy organizations may also be willing to grant you fund to start your business.  This is only possible if your business line is in line with the focus of the organization. Some of such organizations are set up to help people looking for startup funds and some other ones do not operate in that line. You may want to find out about the specific focus of any such organization before you approach them for startup fund.

Investors

You may also be fortunate to come by an individual willing to invest in your business based on certain terms and conditions that the two of you will agree on. Such condition might be in form of profit sharing formula.  Such individuals may not have any experience about the business you want to begin, but they have got the fund.  Aside from profit sharing formula the individual may also ask to be a shareholder in the company as condition for providing the capital required to start.

Cooperative society

Many Nigerians are relying on cooperative societies to get startup capitals for their businesses. However, the cooperative societies will properly investigate you to find out if you are reliable and trustworthy personality before they can give you such fund. There are some other sets of cooperative societies that only give fund to those who have already started business and not to those seeking for startup capital. They always seek to visit your business place and find out if the business can be profitable enough to pay back the debt. Cooperative societies, however demands for certain interest on the money they borrow you and you are expected to pay back periodically.

Partnership

You can also go into partnership with someone that ahs the capital and the two of you can divide the startup capital into two. This is possible if you come across any individual that has similar business idea like yourself.  The two of you will work together to raise the fund and raising fund this way is faster since you are not alone anymore.  Though, the two of you will agree on sharing formula before you start working together in the business.

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Bank of industry

You can always approach the bank of industry for money to start up your business. So many things are however involved before bank of Industry can grant you learn to start a business. They expect you to prepare and submit a business proposal that will give details of the business you want to start and how feasible the business is.  Also, you are required to provide guarantors before such loan can be approved. Also, bank of Industry expect you to contribute up to 25% of the capital, while they help you with the rest.

Banks

Banks also give people loan to start business. One major factor that is holding so many people back from approaching commercial banks for loan is the huge interest rates that commercial banks place on loans. Aside from this, the banks also delay for a very long time before they approve your loan application. You also must provide collateral before a commercial bank can approve your loan. The collateral must be able to offset the loan in the event you are not able to pay up anymore in the future. The loads of paper works that are done in banks during loan processing put so many people off bank loans.

Federal government empowerment program

The federal government of Nigeria is presently running empowerment programs that make business grants available to Nigerians who may want to start any business. You are expected to apply for it and also submit a proposal. A team set up by the government will access your application and  determine if you qualify or not.

 

 

 

 

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