10 Ways to Secure Funds for Startups in Nigeria: Many entrepreneurs who want to start a new business in Nigeria face numerous obstacles merely to get their operations up and running, which may be extremely frustrating. One such issue is obtaining the necessary finances to launch the firm. This has proven to be a significant deterrent for the majority of prospective business owners in the country today. While some people are able to accomplish this in a short amount of time, others must work for a long period of time in order to obtain the resources necessary to launch their company.
Within the scope of this article, you will learn about ten innovative methods of securing funds for your startup business in Nigeria.
Of course, you are aware that everything in business has its own advantages and disadvantages and you will ultimately be the one who will determine which choice to choose, therefore it is essential that you are well informed about the various possibilities accessible.
Before continuing with this article, you might want to take a look at the Federal government loan schemes in Nigeria, the TEF foundation, and the Free Ishiba grant for company growth – all of which may be of assistance in your search for a personal loan or money.
10 Ways to Secure Funds for Startups in Nigeria
This article will discuss ten different methods for raising capital to start a business in Nigeria. If you’re having difficulty raising startup capital, the information provided here will be beneficial.
FAMILY AND RELATIVES
This is another reliable method of fundraising this year. Because you can approach multiple members of your family or relatives at once for funding to start your business, you can quickly raise the finances necessary to get started. However, this method of fundraising may not be ideal, particularly if there is no family member who is upbeat or ready to assist. Many of them would even say they have personal expenses to attend to and hence are unable to assist you with funding your business’s start-up.
FRIENDS AND WELL WISHERS
These are other sources of funding for your firm. This method can also be used to quickly acquire funds for a business, especially if your friends and well-wishers are well-off and financially secure at the time you approach them for funding to start your business. To raise funds in this manner and to quickly raise the requisite amount, approach a large number of people at the same time. Make little demands of them. Divide the money into small fractions and ask each person to contribute a fraction of the money to your cause. By the time you’ve collected fractions from various sources, you’ll have amassed the funds enough to launch your firm.
Certain philanthropic organizations may also be willing to provide funding to help you launch your firm. This is only achievable if your business aligns with the organization’s mission.
Some of these organizations are dedicated to assisting individuals seeking beginning capital, while others are not. You may wish to ascertain the organization’s exact mission before approaching them for startup funding.
This is known as self-help. It is one of the most straightforward methods of raising capital for your business in Nigeria. It entails saving money in small increments. The time period during which you can raise funds in this manner varies according to the amount of money you are able to save. If you save a lot, you can quickly raise funds. However, raising funds will take longer if you are unable to save a significant amount of money each time.
This is the most secure method of saving money for your business because it does not involve borrowing. There is no need to worry about repaying a creditor. It enables you to start and run your business completely stress-free and at your own pace.
Numerous Nigerians rely on cooperative societies for startup capital. However, cooperative societies will thoroughly study you to determine whether you are a dependable and trustworthy individual before providing you with such funds. Other cooperative organizations provide funding solely to those who have already formed a firm, not to those seeking beginning money. They are constantly on the lookout for ways to visit your firm and determine whether it is profitable enough to repay the loan. Cooperative societies, on the other hand, require a set rate of interest on the money they lend you and expect you to repay them on a recurring basis.
You may also be fortunate to find an individual prepared to invest in your firm on the basis of mutually agreed-upon terms and conditions. Such a condition could be expressed in the form of a profit-sharing formula. These folks may lack knowledge in the field of the business you wish to start, but they have the funds. Apart from the profit-sharing formula, an individual may request to become a shareholder in the business in exchange for supplying the startup cash.
FEDERAL GOVERNMENT EMPOWERMENT PROGRAM
Nigeria’s federal government is currently sponsoring empowerment initiatives that provide business incentives to Nigerians interested in starting any type of business. You are required to apply for it and submit a proposal as well. A government-appointed team will review your application and determine whether you qualify or not.
You can always ask an industrial bank for funding to establish your firm. However, numerous factors must be considered before the bank of Industry may provide you the opportunity to learn how to start a firm.
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They anticipate that you will write and submit a business proposal outlining the nature of the business you wish to launch and its viability. Additionally, you must furnish guarantors before the loan can be authorized. Additionally, the bank of Industry requires you to contribute up to 25% of the capital, while they assist you with the remainder.
Banks also provide loans to individuals for the purpose of starting a business. One significant reason discouraging many people from approaching commercial banks for loans is the high-interest rates charged by commercial banks.
Apart from this, banks also take an inordinate amount of time before approving your loan application. Additionally, collateral must be provided before a commercial bank can authorize your loan. Collateral must be sufficient to cover the loan in the event you are unable to repay it in the future. The mountains of paperwork required by banks during loan processing deter many consumers from taking out bank loans.
You can even form a partnership with someone who already has the funds and shares the startup capital in half. This is feasible if you come across someone with a similar business concept to yours. The two of you will collaborate to generate funds, and raising funds in this manner is faster because you are no longer alone. However, before you begin working together in the business, the two of you will agree on formula splitting.
However, this article has b been helpful in highlighting 10 Ways to Secure Funds for Startups in Nigeria.