One problem of most aspiring entrepreneurs is always where to source for fund for their startup in Nigeria. Many first-timers erroneously believe that they can successfully generate sufficient cash flow on a near-term basis, then bootstrap their way to financial success.
This does not work in today’s fast moving business climate, especially in many medium and high-tech areas.
Are you an entrepreneur looking for fund to start that dream business? Is lack of fund the reason why you have not been able to launch that business, develop that app or created that website?
In this post, you will be able to identify 5 sources where you can go for fund without asking for collateral. Yes! I mean it, you won’t need collateral to get fund for that startup business of yours with these sources.
1. Personal Resources
Most entrepreneurs start their small business with their personal savings. There is significant evidence globally that entrepreneurs depend on personal savings to start their new ventures.
You can save up the amount of money you want for that business of yours. I know saving takes determination and sacrifice but you can do it.
Starting a business with your personal fund put you in full control of your business and how much you are going to get. With your personal money, you have the freedom to operate the business as you see it best.
You don’t have to draw a business plan so you can start pitching angel investors or banks.
Save some part ofany money that comes into your hands, you will have to sacrifice some luxuries so you can hit your target, but it is worth it.
2. Family Members and Friends
Family members and close friends are usually willing to provide financial assistance to the would-be entrepreneur once they are convinced that the entrepreneur have the pre-requisite knowledge and skill to manage the new venture successfully.
Though this method is slightly risky because if eventually anything go wrong, your relationship with these people is affected.
Personal character and trustworthiness are the major consideration before loan is granted. It may not be a loan, depending on how financially buoyant your family members and friends are.
3. Customers and Suppliers
This kind of sources of fund works with small business that involves someone or group of individuals who will continuously patronize your business.
Customers can be a source of fund when they prepay for order or by paying in advance. This is not easy to come by but if the party involves trust you and really need the products, they will be willing to pay for the products in advance.
Suppliers can also be a source of fund for your startup by supplying you products within a period of 30 to 60 days of paying for the products. This sources look like a contract work, because you collect money, do business and keep your profits.
If you can convince these parties and build trust, customers and suppliers will be able to do business with you and help you grow your business in Nigeria.
4. Partnership
This is another source of funding your business when you don’t have the complete starting capital.
If you know of someone who you can share your business idea with and also the person has the cash, you can partner with that person to start your business.
Regardless of whether you trust the person or not, an attorney should be there as a witness and to present necessary document for signing a partnership deal so that they won’t be a problem in the future.
5. Rotating Saving Scheme
These are informal institutions that provide loans to owners of small business or startup. This is one great source of fund, and they are very popular in developing countries.
The aspiring entrepreneur can join this group popularly known as Osusu or Esusu to raise funds. They are popular and convenient sources as they do not demand collateral other than personal guarantors (in case of large amount).
However, the beneficiaries must be a member of the saving scheme before he or she will be granted fund.
You just read through the 5 sources of fund for your business startup in Nigeria and you are now left with the option of which source will be beneficial for you. You may choose the first one and any other sources combine.
You taught I was going to mention banks, getting angel investors to help with funds, or playing lottery (you know I won’t do that)? I won’t advice you to go the all those sources even if you do or don’t have collateral. Let banks and angel investors be your last options.
Please, do me a favour by sharing this post because I know you have been bless by reading this post. Your thoughts are welcome via the comment box