A major reason why many people are not into business yet is because of a lack of money or funds to start up. A lot of people have brilliant ideas but lack the needed funds to make them a reality. When it comes to business it is a known fact that the more money you put into it at the start the more chances of success you have. In Nigeria, there aren't so many friendly options concerning getting financial assistance to start up a business. In this article, however, let us look at three great ways to raise funds for your business.
Avenues to raise funds.
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Equity funding. This means receiving money for your business needs in exchange for investors having a share in your company. Almost anybody can be an equity investor, friends, family angel investors etc.
Advantages:
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To receive equity funding, you do not need to have revenue or an impressive financial history.
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You also do not have to worry about payback as with loans.
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Most investors come with their expert opinions and expertise, connections and experience.
The disadvantage though is that each shareholder owns a piece of the company.
If you are content with selling a stake in your company at higher costs to attain growth, then you should consider equity funding.
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Debts/loans
Getting loans is perhaps the most common way of sourcing funds. Loans are sums of money that a person gets or borrowed from another on the condition that it will be repaid or returned overtime at a later date sometimes with interest. Here's a list of where you can get low interest loans for your business in Nigeria. https ://smartsmssolutions.com/blog/83-updates/1727-where-to-get-low-interest-loans-for-your-business-startup-in-nigeria
Debts can be gotten through bank loans, money lenders and vendor credit. When it comes to debt and loans, the borrower gives debt securities such as bonds and promissory notes. Existing companies can also get funds by issuing debt to the public.
It is important to note that startups find it more difficult to access bank loans given the fact that they do not have a business history yet and may struggle to repay the loan collected.
Here are a few things to consider before taking a loan.
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Consider repayment plans and options.
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Seek expert opinions especially as you might not understand all the terminologies and technicalities involved in accessing a loan.
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Having a feasible business plan; would help you to calculate how much you need and also decide the type of loan you need.
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Grants
Grants are non-refundable funds given to individuals or companies. What this simply means is that a grant is a money that is given out without the condition of repayment or payback as with loans.
Grants are usually given by the government and corporate organizations for specific purposes. Grants can be used to purchase needed equipment, get facilities, develop products etc. Grants are not usually given to every or all kind of businesses. They are mostly given to businesses that aim at developing society in one way or the other or solving a societal problem. They are also usually given to the less privileged, students, women and youths. If you reside in Nigeria, check out this list of available grants.
https ://infoguidenigeria.com/grants-in-nigeria/ . You would also find this step-by-step guide on how to start and grow a business useful. https://smartsmssolutions.com/blog/118-sms-marketing/small-business/1725-a-step-by-step-guide-on-how-to-start-and-grow-a-business
Debts, equity and grants are not the only ways through which funds can be generated for the business. There are also other means such as bootstrapping, angel investors, crowdfunding, and strategic partnerships amongst others. Find out how you can use crowdfunding to raise funds for your startup. https://smartsmssolutions.com/blog/83-updates/1733-10-best-crowdfunding-tips-for-a-start-up The key to determining from what source you are going to fund your business is understanding your business model, how much money you would need and knowing how willing investors are in putting money into businesses in your niche. As you make efforts towards starting your business, take note of these common mistakes of failed startups.
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