Last Updated on August 14, 2020 by Henry Ibeleme
You will agree with me that getting a business capital is not an easy venture, especially if you don’t have wealthy parents or friends to support.
The significant reason many are yet to start their dream business is because of a lack of startup funds. If such a plight can be mitigated, there will be more entrepreneurs in the country.
Before I started my online business, I battled with this issue of capital. I needed a computer at least, but I couldn’t afford it due to its expensiveness.
Since families and friends couldn’t help, I had to hustle with my mobile phone to make money. After three months, I have made enough to buy a computer and a domain name.
How I was able to realize this business capital in Nigeria is unbelievable, because the idea of making money with a phone isn’t very realistic.
However, it was real in my case!
I was able to work as a freelance writer with my mobile phone to save money. Initially, writing with a mobile phone is frustrating, but I had no choice but to persevere.
If you’re on this page and looking for ways to source or get business capital in Nigeria, then the tips I will share in this article will help.
In this end, starting that business will lie on how passionate and determine you’re to see your dream translate to reality.
Table of Contents
1. Personal Savings
When it comes to getting the business capital to start a business, your number one option should be your saving.
At this age, people can only help when they see you’ve done something, at least, like raise 50% of the needed capital.
Even if you didn’t save enough, the little you were able to save would convince them to help. People want to help only those who are serious!
If saving entails getting employed as a salesboy or salesgirl, please do. It is a sacrifice that is worth paying.
When you’ve worked for at least six months or a year, you will save enough capital to start any business.
Instead of folding your hands and giving excuses like: There is no business capital. Why don’t you start applying for jobs?
While working, open a bank account different from your account. That way, you can save for your business without touching it.
When opening that account, make sure not to ask for an ATM card, since you’re not planning to touch the money for anything, but rather for business.
2. Families And Friends
I have helped most of my friends start their business, and that was because their business idea and determination were glaring.
Make a list of friends or family who you believe can help you. When done, visit the person with at least a bottle of wine.
After the usual pleasantries, it is time to let the cat out of the bag. I often advise pitching your business idea talking about how lucrative it is.
You need to get your potential helper interested in the business, while exposing how lucrative it is.
When done, talk about how much you have saved and how much you need help with. If possible, you can give estimation when you’re likely to repay this loan.
Some wealthy family members might forget the idea of a loan and just help you out. At the same time, some who aren’t financially fit will expect payback.
Whatever the outcome, you need to be ready to pitch your idea and settle your debt when it’s time.
There are lots of prospective entrepreneurs in Nigeria with incredibly wealthy friends and family members. But they are not ready to seek help due to ego.
They don’t want to look weak, nor do they like the idea of seeking help. If you have an unhealthy ego, now is the time to swallow it and seek help.
If a moment of shame will help you start your business, then it is a small price.
3. Borrow From Lenders
Another medium to get business capital in Nigeria is through lenders. These are firms or businesses that offer loans without any guarantee.
When it comes to loans, many prospective entrepreneurs often shy away. That is because of the numerous myths and misconceptions portrayed by Nollywood movies.
If you don’t like using your house or car as collateral as commercial banks require, these Nigerian lenders might be able to solve your business’s financial needs.
Here is a list of lenders in Nigeria that offer business capital in Nigeria without collateral.
- Aella Credit
- Social Lender
- QuickCheck, etc.
All they require to process the loan will be your income statement to determine how likely you can payback.
Another requirement is your BVN, which they will use to know more about the account, especially when the borrower fails to pay.
A friend of mine borrowed #250,000 eight months ago from one of these lenders. When it was time to pay back, all they did was reach him through his mobile phone.
When someone fails to pay, they can track the person using BVN. So, don’t think of playing smart.
To get the business fund needed to start a business, consider these lenders as they are pretty reliable. You can borrow as much as #4 million, depending on your income statement.
When you borrow to start a business idea, it comes with this drive that compels you to make it work. To succeed, that is the drive you need to face your business.
4. Bank Of Industry (BOI)
The Bank of Industry is known to help businesses, small, medium, and big with funds to start their business.
What BOI does it to offer 25% of the business capital, which means you will have to complement with your savings.
But before that can happen, they often evaluate you to ensure you’re capable, credible, and have a good reputation.
If there is a dent on your reputation, getting the needed business capital might become a problem.
Remember, this is a loan in which you might not need collateral. The only way to ensure you don’t get turned down is to be a good citizen.
If your record is clean, you will get that startup fund without issues.
Here Is How You Can Access Bank Of Industry
- Write a formal application letter
- Complete the questionnaires
- Submit the forms or applications after completion.
If you’re ready to begin, visit BOI’s website and download the appraisal form and questionnaires for your business capital.
If you meet the requirements, you will have no issues getting the capital.
5. Grants And Angel Investors
Another way to source for business capital or startup funds is through grants and angel investors. With a grant, you do not need to pay back.
One of the most popular grants for aspiring entrepreneurs include:
- Tony Elumelu Foundation
- YouWIN Connect
- GroFin Fund
- Diamond Bank BET Programme, and many of them.
Irrespective of who you’re seeking help from, your job is to convince them that you have a feasible business idea.
You will need a business proposal and plan to pull this off since they cannot just take your word. In business, you need to show, not tell what you want to do.
From your business plan or proposal, your investors will have a better idea. It would help them to decide if you’re a good investment or not.
Getting a business capital here in Nigeria is not easy, but it is when you know the channels to follow and the people to meet.
Getting a startup or business fund is a significant issue, but you can easily pull it off by going the extra mile by showing seriousness.
How do you do that?
With some savings, a business plan, and more if possible. If you want to secure a grant or perhaps request for financial help from a wealthy investor, you must be ready to communicate your idea transparently.
There are many ways to source for business funds or startup capital. Try to analyze the alternatives and settle for the option where you have an opportunity.
Money should never be the reason you’re unable to start your business. If something must stop you, ensure it is not something as feeble as money.
When you get the capital to start your business, do not forget to follow my guide on how to start a business. No doubt, it will guide you to make better decisions.
Before you go, can you comment on some other ways you can source for business capital? Time to share your voice by using the comment box!