How Do I Get Funding For My Business In Nigeria?

[kayode10]

Setting up a business in Nigeria interim is very difficult because you will not have access to funds for your business idea.

People are often advised to start raising cash from their immediate families and friends.

This is a good idea but economic situation of the country makes everyone to hold tight to their fund. please make it difficult for a hoodie enterpreneur to turn to the family and friends for business.

Another option is to raise business capital from the financial institution like bank. It is very difficult to see a financial institution that will lend money out to a new entrepreneur in the block.

Majority of them believe that the buddyenterpreneur do not have enough experience on how to handle business capital. They will even ask you to bring collateral away far more for the loan you want to obtain.

Beside that, you must be ready to bribe your way to the top and give a certain percentage of the loan back to those who will help you to secure it. The majority of them usually request for 20% of the loan.

Another thing is that the interest rate that comes with the loan is out of this world. Most bank usually request for about 25% interest rate per annum.

can you please suggest another way someone can get fund for their business idea.

 

[Richee84]

Getting funding to start-up a business in Nigeria is quite very challenging and difficult. Capital in business is one of the life wire of any business of which without good funding the business will collapse or be struggling to survive among it various competitors. There are various way business can be funded depending on the one that work for you. Business can be funded through personal savings, individual who have in mind to engage in a business must cultivate the culture of personal savings. Though it's very hard to make savings and keep it for a long period of time without touching part of the savings but if one is able to make savings on his or her own it will go a long way in funding the business without any consequences of repayment.
Another way to get a business funded is through borrowing form friends and family, financial institutions and from government or multinational corporations. This process don't actuall come that easy as it require serious of documentation except for that of the family and friends that might not require much documentation.
Grant form either government or Nor governmental organisations is also a very good way to source for fund to support business activities.

 

[Kingsley]

I know many people will encourage you to approach a microfinance bank or if you have a good collateral some will advise you to package your document and visit a commercial bank to access loans, as simple as this may appear it might not really be the best option for you at the entry point of any business. Many have taken that part today but they are still filled with regret. One can not start off a business on a loan it is not advisable some microfinance bank will outrightly reject your application they discover you are just going to be a newbie in market. They will advise you to start first no matter how little. This to enable them access your performance first to determine if you can handle a more bigger sum of money when they decide to accept your application.

Hence it is always better to start small and grow the business with the passage of time. Then if start big night be a major worry for you then you can approach friends and family members who are well to do at this time. Or you can aswel partnership with someone who is ready to invest in the business.

 

[eldavis]

Why not set your business plan the look for something else to do just to generate the capital? These days there are so many things you can do both online and offline with very little capital and can generate enough for you in the future. You can start up something small and use it to save up capital for your dream business. It might take time but it's worth it.

 

[Kendy]

In Nigeria, everything is on the increase and funding a business is now very expensive even for small scale businesses. Starting from renting a shop outlet to purchasing the products is a whole lot of work. It is possible that you buy a product today at 8am for $6 and around 8pm of the same day, the product will rise upto $9. The rate of things are very exorbitant especially the hike in fuel prices which literally control the prices of other goods. The best way to get funding for you business is if you have been able to have some money in your savings account. I would not suggest taking loans because the interest rate is very expensive and the timeframe for repayment is mostly always short and unfavourable. Some individuals would still be prone in receiving loans without foreseeing the consequences it would have in the business. Starting a business should be planned for and not just to rely on loans because of its easier access. Another way you can find your business in Nigeria is by engaging in diverse side hustles or you can opt for investors who would choose to pump in finances into your business, but the business idea must be top-notch.

 

[kayode10]

Most people found it easy to recommend raising business capital through loan from the financial institution. but large majority of them don't know what it takes to raise capital from the financial decision like bank.

If you are in developing country, you are going to face with high interest rate on the loan you are applying for.

Most of the financial institution usually charge at least 24% interest rate for every loan you obtained from them. Another thing is that you will have to bribe your way to the top in order to secure the loan.

There are so many ways in which we can go about raising funds for your business idea without approaching the financial institution.

Bootstrapping is one of the ways to raise capital for your business idea. You engage in some side hustles and save the money you realise from those horses for your business idea.

Another way is to partner up with someone who have financial muscle. This person can be within your family members or your friend. You just need to come up with a good presentation and convincing idea so that the person Will invest into your business idea.

You can also raise capital for your business idea through angel investors. Angel investors are people who are looking for small-scale business to invest your money in preferably the one that will bring in profit for them.

 

[Fashow]

It is not a gainsaying to say that starting a business in Nigeria is not easy. Many elements are responsible for this, some of the elements are; Government policy, Economy crisis, poor business enabling environment, etc.
Despite the elements highlighted above, financial problems should not be underrated because finance is the lifeline of every business. Below are some of the ways that one can finance business in Nigeria.
Individual saving is one of the surest ways to finance a business in Nigeria. Secondly, financing a new business through families is also reliable but not that reliable again in Nigeria due to the hardship in the land. Going to the bank for a loan is not that advisable because of the high-interest rates and other elements like invisible charges.
Therefore, being an entrepreneur in Nigeria required a lot of improvisation, and research must be carried out from time to time if one still want to remain in business.

 

[Deleted member 62875]

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[Rachael]

The standard of living in Nigeria keeps going on the high side. It is discouraging that the prices of goods are still on the high in every coming government administration. The prices of goods keep inflating while our source of livelihood remains static or even decreases in some cases. imagine, during the covid-19 pandemic, when so many people were laid-off from their jobs, it was a devastating time because even the effect of the pandemic was not greatly felt like the state of poverty it had on many. Getting funding through obtaining loans was pretty difficult at that time because there was a lock down order. There are ways you could get funding but what happens in a case where an unplanned event or emergency situation which is not profitable, makes you divert the money gotten as loan, how do you plan to repay, when you have not utilized the money in making profits. My point is, before obtaining loans, devise a means of repayment and keep an open mind that challenges are bound to occur. Always have preventive measures that should salvage some unpredictable events or devise to the option of savings so you do not have to be bent on taking of loans.

 

[funmi]

Business can not really survive without funding , this type of funding is what we call working capital, some people.neglect the place of working capital in a business. The only thing that comes to peoples mind is the start up capital, so everyone is focused on ways of acquiring the start up capital rather than working capital. This is why after a very short time when some people start doing their business for sometimes they just discover that they are unable to continue the business and they will begin to run from.pillar to post in trying to source for funds. This is why so many business men and women are just living on loans to fund their businesses. The reality od that the government of a good country is suppose to set out some fund to support both small and medium scale business just as they are helping out with loans to the bigger firms that they seem to have more access to. Although we see on the newspapers and we watch were they claim to embark billions of dollars to support small and medium scales business's it in the end we don't really get to see it. Just like the NYIF loan portals .

 

[Yusra3]

In Nigeria, check the sources of financing such as commercial bank loans, microfinance institutions, cooperatives and government’s schemes like the Bank of Industries Small Medium Enterprises funding. In addition, you may want to consider about angel investors, crowdfunding platforms or venture capitalists. Undoubtedly, write down a robust business plan along with the sales projection and budget. Having collateral reserves and a good credit can increase your chances. Being able to inform lenders your USP properly is critical for receiving enough startup money.