5 different ways to fund your SME in Nigeria

3 min read

Chima has been a graphic designer at a Lagos-based eCommerce startup for five years now, he enjoys making the creatives at the company and he is good at what he does, in two years he has risen to become the head of the creative unit at the company.

As much as Chima loves what he does, his dream has always been to start his own creative company producing Nigerian comics and animated series.

He wants to quit his job at the eCommerce company and create comics full time but his dilemma is how to fund his new business because we all know running a small business in Nigeria or anywhere else requires available cash to meet your needs.

So how can he raise money to fund his business? Here are some of the options Chima or anyone in a similar position can explore.

Bootstrapping

Bootstrapping means relying on personal income and savings. If you have some money saved up and can manage on very lean resources, then bootstrapping is the way to go.

The first stage starts usually with some personal savings, or perhaps funds from friends and family. Or you could fund it as a side business while keeping your day job.

The next stage is getting funds from customers and ploughing it back into the business. The disadvantage of this is that growth is often slow.

However, with a good business model and budget, your business should find its feet soon enough.

Crowdfunding

While bootstrapping requires getting funds from your savings or family, crowdfunding your business means getting money from whoever is willing to fund your idea.

Although crowdfunding in Nigeria is often restricted to sponsoring health procedures or educational pursuits, it is still a worthwhile avenue for getting funds for a business.  imeela is available locally, while gofundme is still the popular foreign site for crowdfunding.

Angel Investors

Angel investors are individuals or group who provide capital for a business start-up, usually in exchange for ownership equity.

Just like the name implies, Angel investors can swoop down and make your money worries go away. However, your business has to be attractive to investors or you better have a solid pitch and business model to make your business appealing to Angel investors.

Partnership

A partner that shares your vision can help grow your business, not only can a partner add their own resources, they can also provide requisite skills to develop the business. Get a partner that complements your skills and resources and you can be on your way to a successful business.

Small Business Loans or Grants

There are quite a number of places that give loans and grants to different businesses provided conditions are met.

We have had a series of posts of places like this where Nigerian businesses can get loans and grants. You can find them here, here and here.

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Usman

Usman is a content developer and screenwriter. Bizarrely, he has never been seen in the same room with Batman, leading many to believe he is indeed the Dark Knight. He refuses to comment on these claims.

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