You are an entrepreneur, and you’d like to raise funds for your business. Your first thought would probably be to dip into your reserves—if you have any –or ask banks and lending platforms for help. Or you could turn to family, friends, and other contacts that may be willing to drop you a lifeline.
But what if none of these sources of finance is available to you? Or what if they are, but you can’t go along with the conditions attached to them?
Don’t fret. There are other ways you can fund your business. We’ll explore eight of them here, so you’ll have a pool of options to choose from. Here we go:
Try Peer-to-Peer Lending
There are digital platforms that bring together prospective borrowers and lenders looking to reap interest on the loans they give out— basically a marketplace for credit. A number of them exist in Nigeria; examples include KiaKia, P2Vest, and Fint. You could get on any of these spaces, connect with lenders, and secure funding for your enterprise.
Sell Customer Lists
If you have built up a list of your customers, you could sell it to other businesses. It’ll be a win for both parties involved. You’ll get paid, and they won’t have to go through the tough process of creating their own list (or expanding it). Just make sure that the buyers are legitimate firms or organizations, as you don’t want your customers to get targeted by imprudent entities.
Sublet Office Space
You may open up another income source by subletting your office space. This will work if there’s more room at your location than you need.
Sell Shares To Employees
You could sell shares in your business to employees. This allows them to become part owners of the business while generating funds for your ongoing operations. Of course, your staff will be willing to take this offer if they believe in the company and its potential for growth over time.
Utilize Reverse Factoring
Reverse factoring (also known as supply chain financing) happens when a third party—such as a bank –finances a supplier on behalf of a client (a business). This could prove helpful if you can’t pay your vendors quickly enough for the supplies they deliver to you.
Timeshare Equipment
Instead of purchasing new equipment, you may share some with an entity that already owns one. You’ll have to pay for this, but the cost won’t be nearly as high as what you’ll pay for new equipment.
While this isn’t direct financing, it’s a way to reduce your business’s running costs.
Barter Equipment And Services
Here’s another indirect way to fund your enterprise. Some businesses may need resources that you possess, and have things that you could use. If you’re able to discover persons or organizations that fit this bill, you could exchange equipment and services with them. It’ll let you save a substantial amount. It might be a bit difficult to find such partners, so you’ll have to ask around if you’re going to get to them.
Enter Contests
Competitions that offer prize money could provide you with funding if you’re able to finish among the winners. You will have to look out for such opportunities and prepare for them. You’ll find regular updates on contests, incubators, and other funding opportunities here on ConnectNigeria.
Final Words
The funding types and sources we’ve talked about are just a selection of what’s available to you. But they are among the most effective ones you’re likely to find. Explore them if you can, and settle for one that suits you.
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