After you have finally considered a business idea to venture into, the next step is how to fund that idea. Without having the required funding for your business, your business remains only an idea, and that could be very frustrating.
As an emerging entrepreneur or established owner who needs funds to expand the scale of production, you should know at least one place you can source capital or funds for your investment.
There are several business funding sources available for entrepreneurs in Nigeria that we would like you to look at in this article.
10 Best Business Funding Sources You Should Consider
You may not have considered crowdfunding, but a lot of businesses have found their feet through this funding source. Several Nigerian entrepreneurs now use this source to raise money, and it’s working. You are not going for bank loans or grants, it could be in the form of equity financing or support from people who believe in your idea.
In the United States, numerous projects have received life through crowdfunding. It relies basically on the concept of democratizing the flow of cash into individual or corporate projects or businesses. And whatever kind of endeavor you are looking at, you are very likely going to find a crowdfunding platform that suits your needs.
Crowdfunding sites that Nigerian entrepreneurs and business owners can consider include Naijafund.com, kickstarter.com, circleup.com, funanenterprise.org, indiegogo.com, etc.
2. Tony Elumelu Entrepreneurship Programme (TEEP)
Tony Elumelu Entrepreneurship Programme (TEEP) is a programme that helps to fund small and medium businesses in Nigeria and across Africa. The patron, Tony Elemelu launched the programme in 2015 with a goal to provide entrepreneurs with $10,000 seed funding in multiple countries across Africa.
They select a thousand entrepreneurs annually to benefit from the programme. Professionals and seasoned entrepreneurs across Africa review the several applications submitted by applicants based on clear financial models, market feasibility, and a few more.
For you to become eligible for the programme, your business must be situated in Africa, must be three years old or less, must be for profit, and the applicant must reside in any African country and must not be younger than 18.
This is one of the best places to get money for your business plan. It is just like a grant except that you are going to go through some series of training and orientation. This is to prepare you for what is to come as you sojourn into entrepreneurship
3. Business Development Fund For Women (BUDFOW)
Business Development Fund For Women (BUDFOW) is a brainchild of the Nigerian Federal Ministry of Women Affairs and Social Development (FMWASD) but is being supervised by the Bank of Industries (BOI).
BUDFOW is channeled towards empowering ambitious African women to be able to compete favorably in the business world.
They have successfully supported businesses with over N170 million since the inception of the programme. Your business must be registered to take part, and it doesn’t have to be a startup. You may want to expand too.
GroFin offers loan facilities to SMEs. It is pioneered to help entrepreneurs across Africa in part of the Middle East finance their business. The organization delivers a distinctly integrated solution for end-to-end business support and capital to new and growing businesses.
Financial support is provided to entrepreneurs in 14 African countries and also the Middle East. They have earned about $535 million from 34 international finance institutions, private funders, and development organizations. They have supported 9630 entrepreneurs and approved $385 million business loans.
To be eligible, your business should require financing between $100,000 and $1.5million. It must also be situated in Ivory Coast, Egypt, Ghana, Oman, Kenya, Jordan, Rwanda, Uganda, Iraq, South Africa, Zambia, or Nigeria, and must be a profit-making venture.
5. Lagos State Employment Trust Fund (LSETF)
Lagos State Employment Trust Fund (LSETF) came to life through the state’s Employment Trust fund Law 2016 which is channeled at rendering support to Lagos state residents to boost wealth creation, provide job opportunities, and combat unemployment.
About N25 billion capital was raised by the Lagos State Government for four years together with funding provided by numerous channels to provide support to all households in Lagos State. The organization helps entrepreneurs in Lagos get access to funds which is also expected to help develop programmes that are designed to make jobs available to residents and also boost innovation within the state.
6. Angel Investors
Angel Investors are wealthy or high-net-worth individuals who provide financial support to entrepreneurs. The purpose of the funds is to bankroll ideas or further improve the scale by which an established company operates and in return, they are offered an equity stake, and which automatically makes equity owners.
It is often expected that when the company starts becoming lucrative, the Angel investor could choose to sell their shares for a profit. And aside from just funding, this kind of investor also provides other benefits to the company. It could be a connection with big clients, mentorship, and others. Since most of them are also entrepreneurs, their wealth of experience plays a huge role in the success of the business.
7. African Development Bank
The main goal of the African Development Bank is to combat poverty and generate sustainable growth in the economy among its Africa member nations. This is achieved by providing technical assistance and policy advice to boost efforts on developments, and also allocate and mobilize resources for investments.
Some of their Sustainable development goals include poverty eradication, promotion of lives and well-being for everyone, gender equality for girls and mature women, access to reliable, modern, and affordable energy, and to strengthen and rejuvenate global partnership to aid sustainable development.
8. Shell LiveWIRE
Shell LiveWIRE is a leading development programme instituted by Shell to boost the strength of local economies across diverse communities around the globe by promoting entrepreneurial efforts.
The organization provides support to numerous private individuals to gain access to resources, skills, knowledge, and networks to help them transform their business ideas into fruitful ventures that create job opportunities, sustainable income, and also propel innovation.
9. Family, Friends, and Networks
Usually, when an entrepreneur decides to venture into a business, sourcing for funds through their immediate family members, societal or religious circles should be considered. The taking off of your business depends largely on your already-built relationships. It is easier to get funds from your family and friends when starting your business, unlike other sources.
As the business starts expanding, the network continues to grow. However, it is important that the funding be spelled out to determine all the terms required.
10. The Government Enterprise Empowerment Programme (GEEP)
This programme was launched in 2016 to provide Micro SMEs with collateral and interest free credit facilities with ease of repayment. Nigerian traders, farmers, and artisans are eligible for this loan provision.
To register for the GEEP loan, enumerators on the platform harness specialized apps on mobile devices. Loan products of the programme are FarmerMoni, MarketMoni, and TraderMoni. And the biodata, facial IDs, and GPS location of applying traders and their businesses are captured by GEEP agents.
The agents of this organization are over 4,000 in the market clusters in various locations across Nigeria.