BusinessHABFunding New Business in Nigeria: There are many funding options to consider.
While starting a new business.
Securing loans from commercial banks is difficult and challenging.
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Only 35% of applicants are granted loans.
While most loans require applicants deposit 25% of requested sum including fix assets.
Others are guarantors and opening an account with the said bank.
More documentation is business plan, certificate of incorporation and article of association.
Funding New Business in Nigeria
They also require proof of payback including good credit rating and evidence of tax payment.
Having good collateral and credit rating would aid the loan application process.
There are however many non traditional ways to secure funding.
Here are a few funding sources to consider.
Ingenious Ways to Finance a New Business
1. Franchise Financing:
There are many banks eager to support franchise owners.
This is because the franchise has a popular brand name and a tested business strategy.
They have a template to examine and make recommendations to new owners.
There are some franchise owners willing to invest in the franchisee.
They offer financial and technical support to grow the brand.
Some traditional lenders also specialize in franchise financing services.
2. Business to Business Funding:
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It is not uncommon for major players to offer finance to small partners.
The funds are usually targeted at equipment purchase or increased inventory.
Lending to smaller companies that are crucial to their supply chain is only a logical strategy.
3. Compete for Grants:
Many non government organizations offer grants to startup businesses.
However the recipient has to compete with other entrepreneurs to secure the funds.
The funds are usually tax free and no-repayment.
There are hundreds of such organizations.
Offering innovative entrepreneurs a chance to start their own business
Funding New Business in Nigeria
4. Crowd Funding:
There are many people eager to invest in a good idea.
You can seek funds and donations for your startup idea.
All you need to do is signup with a crowd funding portal and pitch your idea.
There are also companies that nurture and support new businesses worldwide.
Such startup accelerators are more technology inclined.
Funding New Business in Nigeria
5. Borrow from Family and Friends:
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You can seek funds from friends and family.
You can target save or borrow from acquaintances, friends and family.
Make sure you refund them appropriately to avoid problems in your family.
Funding New Business in Nigeria
6. Try Partnership:
Another tried and tested way to secure funds is through partnership arrangement.
The partner could be a sleeping one who provides additional funds.
You need an attorney to draft a legal agreement between both parties.
It is important you stay within the agreement to reduce problems or lawsuits.
Funding New Business in Nigeria
7. Find a Core Investor:
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You can secure funds through a core investor.
The investor might require a share percentage in your business for the funds.
There are many people with the money ready to partner with innovative entrepreneurs.
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