Continued from last week
GroFin, a development financier, has committed over $500 million to funding Nigerian Micro, Small and Medium Enterprises (MSMEs) across the country.
The firm has five types of fund: the Aspire Nigeria Fund, the Growth Africa Fund, the Small Growing Business Fund, the Aspire Small Business Fund and the Aspire Growth Fund.
Social Intervention Fund
Some money has been allocated to the 2018 budget under the Social Intervention Fund. The criteria for accessing the fund include membership of a business organisation. The fund is for artisans and owners of micro businesses. The artisans of business owners can only access a maximum of N100, 000 at three per cent interest rate on a year tenor.
Microfinance banks (MFBs) usually provide funds for entrepreneurs. One of the basic criteria here is that you must open an account and maintain it within six months or one year before asking for a loan. MFBs can offer up to N5 million or N10 million to tech start-ups and creative entrepreneurs.
Africa’s Young Entrepreneurs (AYE) is currently accepting applications to fund small businesses in 2018.
AYE is looking to finance small businesses in various sectors of the economy. Winners will be given grants (not loans) and will be monitored for one year. The only criterion is that the applicant must be a Nigerian and the business must be located in any of the 36 states of the country.
LeadPath provides $25,000 to $100,000 as seed capital to small businesses in Africa. It works basically with technology entrepreneurs, focusing on those that solve real problems.
The Shell Petroleum Development Company of Nigeria Limited has a number of funds for young entrepreneurs, including women. Through the programme, Shell provides support, access to training, guidance and business mentorship for young entrepreneurs and potential entrepreneurs between the ages of 18 and 35.
Zedvance is an online loan provider. It grants loans of up to N3 million to individuals, groups and offer point of sale finance for consumer goods and appliances in partnership with retailers across Lagos.
Steps to getting business loan Before you can get a business loan, you need to convince your lender that your business is worth their investment. Here is a step-by-step guide to getting a business loan from a bank:
Figure out why you need loan
Your answer needs to be more detailed than simply “I don’t have any money.” What specifically will you be using the loan for? Start up? Day-to-day management? As a safety net? To answer these questions, you will need to spend a lot of time figuring out your budget along with the amount of money you realistically can put up as capital. Take your time with this step since it will have a big impact on whether or not you actually get a loan that can cover your expenses.
Know what kind of loan you need
Your answer to the first step will determine what kind of loan you need. If you need money for start-up, you will likely be looking at more localised funding including loans from family and friends, taking out a personal line of credit.
If you are an established business that needs money to manage your day-to-day expenses (payroll, rent and other bills), you can take out a line of credit, a short-term cash flow loan or accounts receivable financing.
If you are an expanding business and need money for relocation and/or renovation, you’ll be looking for a term loan, which is essentially a lump sum of cash that will be paid back within a set amount of time.
Depending on what you expect for the long-term, when you are in a growth stage, you may be looking for long term loan.