The high interest rates of most commercial banks in Nigeria, makes it discouraging for entrepreneurs to secure loans, especially, start-up loans.
Going for a Start-up loan should be the last resort of anybody planning to start a business in Nigeria.
The following ways can be used to raise capital for your businesses.
🔹Personal Savings: You can achieve this by doing something extra, with the intention of saving some money to pursue your goals. I want to believe you already have the required skills.
🔹Family & Friends: Share your idea with close family and friends, specifically request their support. Let them see how passionate you are, a well crafted business plan can help push your request.
🔹Partnership Investor: When you have that great idea, but lacked the financial capital to fund it. The first step is to write a business plan, then look out for someone who may have interest in your ideas. The partnership investor can be anybody. In Nigeria, if your idea is not protected, it’s unwise to make it open in the name of looking for an investor.
Some shrewd investors are always eager to listen and steal your ideas for their own use.
Make sure you understand the terms and conditions of the partnership before appending your signature. It’s very important you involve your lawyer.
🔹Lenders (Banks): Firstly, this should be the last option for any start-up entrepreneur. Secondly, banks are usually sceptical about giving loans for start-ups, this is because, start-up businesses lack the financial records and information required by banks: Character, Capital and Collateral.
Thirdly, the over-bloated interest rates of most commercial banks is suicidal for start-up businesses. I can’t imagine a 2-digit interest rate for someone struggling to start up a business.