Nigerian Startups: 7 Sources of Finance for Nigerian Business

Launching a new business in Africa is a huge challenge at the best of times, and can be an even greater challenge if finances are lacking.

So I’m eager to explore the sources of finance available for Nigerian businesses.

Finance for Nigerian business is so often quoted as being a major barrier that stops potential entrepreneurs from taking action on their dream businesses. However, finance isn’t really a tangible reason why a business idea shouldn’t be launched. Finance can never be a blocker, not to a person who has the uncontrollable urge to turn their dreams in to a reality, even if it means denying themselves some of the basic amenities in life such as access to food and drink.

Trust me, I’ve seen it done before!

Because of this, I’m often asked – “How can I get finance for my startup in Nigeria?” Personally, for me, the key is to start small and raise finance from your personal savings, or friends and family. A lot of people don’t like to hear this answer. Everyone seems to be in a rush to launch big.

If you want to own a large business in Nigeria, I’d recommend that you start small and scale up over time.

You might be wondering why?

As we’ve established, finance for Nigerian business is quite often a barrier as the Nigerian financial system is not very forthcoming when it comes to supporting startups, and buy starting small this barrier is almost removed.

The benefits of this approach are endless and too detailed to discuss in this blog post; but starting small will enable you to test the market and your idea, you have the opportunity to make mistakes that you can learn from without losing huge capital, and the ability to identify your target market and become familiar with potential future customers.

Sorry for going off track because in this blog post we are discussing how to finance your Nigerian startup.

Believe it or not but there are various sources of finance available to Nigerian businesses. In this post, we will explore tried and tested sources of finance that Nigerian entrepreneurs have used to fund and kick start their business idea.

Finance options for Nigerian Business

7 Sources of Finance for Nigerian Business

1. Business Plan:

Don’t just view your business plan as a piece of paper. If used correctly your business plan can be used as a channel that links you to potential investors.

Writing a very good business plan will really go a long way in helping you establish your business.

The beauty is that you don’t need an expert to write a business plan for you. There is a wealth of free information, guides and templates available on the Internet. So with enough knowledge and research about your prospective business, you will be able to write a killer business plan yourself.

Important components like income statement, balance sheet and cash flow statement must be included in your business plan with in-depth analysis. This will further help your investor understand and have confidence in your business, and further understand how and where they can support you.

Read THIS ARTICLE, which will guide you step by step on how to write a Good Business plan that attracts an investor.

Finance options for Nigerian Business

2. Government grant:

Always keep an eye out for business grants in Nigeria that are facilitated through government initiatives. These initiatives primarily focus on supporting key sectors or demographics such as agriculture IT, youth, women etc.

The main thing to be mindful of is that you familiarize yourself with the eligibility requirements, because the money is there, but you must be eligible. Don’t waste your time and energy applying if you’re not eligible.

These governmental programs are there to financially and developmentally support individuals and companies that are eligible. As a businessperson without much capital, going for such support can be the difference between success and failure of your venture, so reach out and apply if you really need the support. The best party is, you don’t ever have to repay. It’s FREE!

The difficulty is knowing what is available and when. My advice would be to do you research now, make a list of all potential government grants you can apply for and then sign up to their newsletters for updates and reminders, also follow their social media handles and whenever new information is announced you’ll be the first to know.

Starting a business with a loan isn’t a bad thing, but it’s certainly not a good thing.

You might be wondering what do I mean by that?

A commercial loan can be perceived as cash drain that makes it harder for the business to succeed because in business cash is king, and the more cash you have to use to service your debt, the less cash you have in your business to ensure it is operating efficiently, effectively and economically.

Loans are also typically secured by a personal guarantee and collateral on the part of the entrepreneur who takes the loan, which greatly increases the risk. For example, small business loans can be very conservative, but still require the entrepreneur to provide a personal guarantees, and they usually want to cross-collateralize the loan against every other business and real estate the entrepreneur owns, which means they are risking personal financial collapse for themselves and their family.

So think carefully and fully understand what you’re signing up for when you agree on a loan.

4. Personal savings:

One thing that is true of most successful entrepreneurs is their unique ability to do more with less, which enables them to save even during the most difficult of times.

Start saving money now for your business. It can be tough but it’s definitely something that must be done. Getting a different bank account with limited access will help, and limit your ability to withdraw money from your savings. You need to be able to deposit without withdrawing for at least, 8 months or more. This should be your primary fund and will even help in securing a loan from the bank. You seriously don’t expect a bank to loan you money if you’re not prepared to risk your own money, do you?

Putting up your own capital to cover the cost of launching and operating your new venture will show prospective lenders that you are serious and confident about the success of your business.

Finance options for Nigerian Business

5. Friends and family:

Your friends and family can help you start that business. You don’t need to be ashamed to seek for support. You don’t need to do it all alone. With their support, coupled with your own personal saving, you can kick off no matter how little. It’s not about waiting for millions to fly into your account before you can start. No matter how little, no matter how small, you can start that business and make it big tomorrow.

6. Business and Entrepreneurial Foundations:

You should give some considerable thought to this if you’re an entrepreneur seeking finance in Nigeria.

The most commonly known foundation is the Tony Elumelu Foundation. Launched in 2015, The Tony Elumelu Foundation Entrepreneurship Programme is the largest African philanthropic initiative devoted to entrepreneurship and is a 10-year, $100 million commitment, to identify and empower 10,000 African entrepreneurs, create a million jobs, and add $10 billion in revenues to Africa’s economy.

This is one of many foundations set up to financially and developmentally support African entrepreneurs, so do your research and see what else is out there for you.

Finance options for Nigerian Business

7. Bootstrapping:

Many of today’s largest corporations such as Apple computer, Clorox Co, Coca Cola, Dell Computer and Hewlett-Packard started by bootstrapping.

What is Bootstrapping?

Bootstrap is a situation in which an entrepreneur starts a company with little to no capital. So you’re basically attempting to launch, sustain and grow a business from personal finances or from the operating revenues of your new company, so this point also encompasses several of the points previously discussed in this blog post.

The main purpose of this is to avoid relying on the conventional sources of finance for entrepreneurs such as outside investors and investment institutions.

Determination is what pushes a man beyond, despite the presence of hillstones and thorns. With the right mindset, finance won’t stop you from establishing that business. The Spirit of Every Great Entrepreneur is something of awe. It’s speaks of fulfillment in business, and that can only happen when you launch your business.

I agree that securing finance for a Nigerian business can be difficult, but don’t allow finances to stop you from achieving your goal, because there is always a solution to overcome those challenges.

By | 2017-07-23T17:43:21+00:00 July 7th, 2017|Business, Business Tools, Finance, Startups|9 Comments

About the Author:

Henry Ibeleme is a professional entrepreneur who believes that there is an abundance of opportunities lying around waiting to be harnessed. His love for writing and self reliance has lead him to launch one of the uprising entrepreneurship blog in Nigeria, Entrepreneur's Mirror. According to him, EntMirror is a home to Nigerian entrepreneurs. You can follow Henry's work at -


  1. Johnson February 24, 2018 at 12:25 pm - Reply has the complete list of CBN regulated lenders that provide finance to Nigerian startups. they also show the interest the bank collects back in return

  2. Mortal55 February 14, 2018 at 4:49 am - Reply

    Very informative but it’s not so easy oo especially here in Nigeria, you are on the your own and nothing like family and friends to assist you financially

    • Terser Adamu February 14, 2018 at 2:41 pm - Reply

      Thank you for your comment and valuable personal insight

  3. Adeyemi Adeleke September 23, 2017 at 2:47 am - Reply

    Nice work Brother,Nigeria future is wonderfully bright!We must all make our contributions and also make clean money to change our Stories.Best regards

    • Terser Adamu September 23, 2017 at 4:08 am - Reply

      I agree 100% it is up to us to create a positive image of Nigeria, and to leave our own legacy that will benefit the generations after us.

    • Henry Ibeleme September 24, 2017 at 7:10 am - Reply

      Hello Adeyemi, I quite agree with you. With collective contributions, there will be an evident chang in our beloved country. When we follow the right route, that’s when we’ll discover that making money isn’t really rocket science. Thanks for being here.

  4. Machizio September 21, 2017 at 3:55 pm - Reply

    Nice one bro

    • Terser Adamu September 21, 2017 at 3:59 pm - Reply

      Thank you. I’m happy that you found value in this insight

    • Henry Ibeleme September 24, 2017 at 7:11 am - Reply

      You’re welcome Machizio, I’m glad you found this helpful.

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