Startup capital for your business can come from various means. The best way to acquire funding for your business depends on several factors, including creditworthiness, the amount needed and available options. In this post, we will be highlighting five ways to fund your Startup Business and also let you know where to access each
1. Help from Family and Friends
In most cases, your family and friends are the first options to consider when sourcing for funding for your startup business. Although they may not offer you something huge enough to cater for your startup needs but the little they offer can be a starting point. Africas richest man, Dangote, started his first business in 1977, through the financial help from his uncle
All you need to access this fund is a good relationship with your friends and family.
2. Business loans.
If you need financial assistance, a commercial loan through a bank is a good starting point. Oftentimes getting a loan from a bank can be very difficult for startup businesses, as you may not meet the bank loan requirements. If you are unable to take out a bank loan, you can apply from a microfinance bank eg Lapo Micro Finance. Lapo offers loans of up to NGN 500,000 for small businesses and NGN5,000,000 for small and Medium-scale Enterprise
You can also check out access to smaller loans through digital mobile APPS like FairMoney, Paylater etc. Note, Heavy loans are not the best funding option for a startup business
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3. Business grants.
This is another cool way to fund a Startup Business. Business grants are similar to loans; however, they do not need to be paid back. Business grants are typically very competitive and come with stipulations that the business must meet to be considered. When trying to secure a small business grant, look for ones that are uniquely specific to your situation.
From time to time, CBN, Ministry of Agriculture NGO’S like Tony Elumelu Foundation do give out grants to startup businesses. Keep yourself updated with the latest news from these bodies. As of the time of writing this post, the top bodies offering grants in Nigeria are
- Africa’s Young Entrepreneur Empowerment Nigeria (AYEEN)
- Tony Elumelu Foundation Entrepreneurship Programme
- Shell LiveWire
- GroFin Fund
This option is suitable for business owners who are willing to share their business profits once it starts paying. An investor is willing to pump his/her millions into your startup business, on the note that he/she will be getting some percentage of the business profit. If you are comfortable with this, you even approach a rich person within your area and persuade him/her to invest in your business.
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the Internet eg Facebook, Twitter etc
Once you have a convincing reason backing your crowdfunding campaign, you can launch one and watch people contribute immensely to your business. Crowdfunding has helped numerous companies in recent years, and here are some reliable crowdfunding platforms in Nigeria, designed for different types of businesses.