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Almost everyone starting a new business venture or business is looking for money to get started. There are various ways to get funds, which include applying for small business grants and loans. But unfortunately, there are not many platforms that provide these loans and grants for small businesses, especially in Nigeria.

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Most small businesses crumble in their first phase of growth. The increased rate of business failure can be attributed to several reasons, but the most cited is insufficient capital, as well as poor access to credit facilities.

Thus, to aid startups and small businesses, here are several ways in which small business owners can raise the much-needed capital in form of loans and grants which they require to start, sustain, and scale their businesses.

Small businesses can access loans through:

  • Banks:

Commercial, Merchant & Development banks offer loans to small businesses, however, before such loans are issued, these banks go through certain processes to ascertain that such businesses are creditworthy, and your business would have gotten to a particular stage. In addition, you need to know that before applying for a loan, your small-scale business must conform with the goals and interests of the financial institution you want to apply to and that your business has the requirements needed for a loan, such as a well-written business plan, a financial record, collateral, and a guarantor.

  • Microfinance schemes/moneylenders:

Due to the rigorous processes and high-interest rates demanded by commercial banks, microfinance banks were established to assist small businesses in securing loans. However, small businesses still need to meet the requirements stipulated by the bank before loans are issued to them.

  • Governmental scheme:

Governmental schemes such as the Small and Medium Industries Equity Investment Scheme (SEIS) Fund were created to finance both small businesses and medium businesses through venture capital. This initiative is from the government and its aim is to advance small and medium businesses to drive industrialization, sustainable economic development, and the creation of employment.

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  • Fintech funding options:
Financial technology (fintech) lenders are institutions that provide loans as an alternative to traditional bank or government loans. Fintech lenders such as PayPal offer both working capital and traditional business loans, and will lend based on an existing business’s earnings on its site. The primary limitation of this service is that you need to currently make sales using Fintech applications and have a functional account with them, that way funding is made easier, requires no collateral, and does not penalize you for a low credit score.
  • Small businesses can access grants through:

Government schemes and non-governmental organizations or foundations: These grants can be accessed by individuals, firms/companies, businesses, or corporations to develop their businesses or scale up operations. One of the best ways to get finance for business or ideas is getting a grant. Inasmuch as securing a loan is a good alternative, a grant is far better than a loan, because it gives you the peace of mind to build and grow your business or idea without thinking of how to repay your loan with its interest.

Many organizations offer grants in Nigeria, Africa, and worldwide. Some of these organizations include:

The Tony Elumelu Foundation: The Tony Elumelu Entrepreneurship Programme (TEEP) is a yearly program launched by one of Nigeria’s business tycoon Mr. Tony Elumelu via Tony Elumelu Foundation (TEF), where every grant application is carefully reviewed by business experts in the industry, and winners are selected based on market feasibility, clear financial models and a capable team to run the business.

Bank of Industry: The Bank of Industry (BOI) recently launched a youth empowerment program for young and talented entrepreneurs looking to venture into various sectors of Nigeria’s economy by building the capacity of the youths and funding their business ideas.

In conclusion, small businesses constitute the driving force of industrial growth and development in the country. The government should focus on and nurture the sector by making funds at low-interest rates more accessible to players in it to help them thrive.

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This article was first published on 28th March 2022

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Grace Christos Is a content creator with a proven track record of success in content marketing, online reputation management, sales strategy, and so much more.

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