This article is about how to raise money for startups in Nigeria currently in this year 2023. We will let you know about at least 10 surefire ways to raise money so you may launch the business of your choice. The information offered here will be helpful if you have been having trouble raising the necessary finance for your startup.
10 WAYS TO SECURE FUNDING FOR STARTUPS IN NIGERIA 2023
The 10 methods listed below can help you raise money for your startup in Nigeria this 2023:
This is one of the simplest methods for obtaining funding for your startup in Nigeria today. It entails small-scale money saving. Depending on how much money you can save, there are several time frames within which you can raise funds in this manner. If you save a lot, you can quickly raise money. However, if you are unable to consistently save a sizable sum of money, raising funds will take longer. Since it doesn’t entail borrowing, this might be viewed as the most secure strategy to raise money for your startup. There is absolutely no reason to stress over repaying a debt. It makes it possible for you to launch and run your business worry-free.
FAMILY AND RELATIVES
This is yet another method of securing funding for your startup. You can quickly acquire the finances needed to launch your business by asking many members of your family or other relatives for support at once. However, if there are no family members who are enthusiastic or eager enough to assist you, this method of securing funding for your business may prove unsuccessful.
FRIENDS AND WELL WISHERS
You can as well approach your friends and well wishers for funding to launch your startup. This method can help you raise money for your new business really quickly, particularly if your friends and well-wishers are well to do. Approach as many of them as possible simultaneously as this is a very good way to help you raise money for your startup quickly and reach your goal. Don’t expect too much of them. Ask each of them to contribute a modest proportion of the total money you require by dividing the total into smaller portions. By the time you gather fractions from various sources, you would have amassed the necessary capital to begin.
You could also be able to get funding from charitable groups to launch your startup. Only if your business line aligns with the organization’s primary objective is this conceivable. Some of these philanthropic organizations were created to assist those in need of starting capital, while others do not work in that area. Before requesting a startup fund from any such group, you might wish to find out more about its special focus.
You might also be fortunate enough to find someone who is prepared to invest in your startup under specific terms and conditions that you both can agree upon. Such a requirement could take the shape of a profit-sharing mechanism. These people might not have any prior company expertise, but they do have the necessary funding. As a condition for supplying the startup cash, a person may furthermore request to become a shareholder in the business in addition to the profit sharing formula.
Cooperative societies are a popular source of startup funding for new businesses among Nigerians. Before they can offer you this money, the cooperative societies will thoroughly study you to see if you are a trustworthy and dependable person. Other cooperative societies only provide funding to those who have already established their businesses; they do not assist those looking for startup funds. They always try to stop by your place of business to determine if it may be successful enough to pay off the loan. Cooperative societies demand a specific interest rate on the money they lend you and require periodic repayment. Kindly take note.
You may also form a partnership with someone who has the necessary funding, and the two of you could split the startup money in half. This is feasible if you meet someone who has a similar business idea to your own. The two of you will work together to raise the money, and since you are no longer working alone, it will be quicker this way. However, before you begin working together in the business, the two of you will have to agree on the sharing formula.
BANK OF INDUSTRY
You can always go to the Bank of Industry for funding to launch your startup. However, there are numerous requirements before the Bank of Industry can allow you to receive business startup funds. They anticipate that you will draft and submit a business plan outlining the specifics of the venture you wish to launch and outlining its viability. Additionally, before such a loan can be accepted, guarantors must be provided. Furthermore, Bank of Industry expects you to provide up to 25% of the capital while they cover the remaining portion.
Banks also provide loans for people to launch businesses. The enormous interest rates that commercial banks charge on loans are one of the main reasons why so many individuals are reluctant to approach them for loans. In addition to this, the banks take a very lengthy time to approve your loan request. A commercial bank must first receive collateral before approving your loan. If you are unable to make payments in the future, the collateral must be able to cover the loan. Many customers shy away from bank loans due to the excessive paperwork required during loan processing.
FEDERAL GOVERNMENT EMPOWERMENT PROGRAMMES
Currently, the Nigerian federal government is implementing empowerment programmes that provide business subsidies to Nigerians who may desire to launch any firm. You must submit an application for it along with a proposal. Your application will be examined by a group assembled by the government, which will decide whether or not you qualify.