Post by Trade facilitator on Jan 29, 2022 14:49:41 GMT 1
What You Must Do To Access Funding As A Small Scale Business (SME) Owner In Nigeria In 2022
The year has just started and many small scale business owners are planning on how to raise finance for their business in the New Year. Serious planning and goal setting have started in many companies, but the most important is how to source for finance to execute those plans.
The importance of Small and Medium Enterprises (SMEs) in any country especially Nigeria cannot be overemphasized. SMEs make up a sizeable percentage of businesses employing quite a lot of Nigerians these days. They constitute one of the bedrocks of economic development in the nation; therefore it is expected that the government should accord the sector the utmost priority it deserves.
But is it so in Nigeria? I can say no; because many small scale business owners in Nigeria go through so much stress to get funding for their businesses despite being the engine room that drives the economy of the nation.
Therefore what are you going to do as a small scale business owner in the year 2022 to raise the much needed capital to finance your business operations? From experience we advise our clients who own and operate small scale businesses not to obtain loans from loan sharks. These harsh loan companies are merciless and don’t care whether your business is passing through some special difficulties or not. They are only interested in getting back their loans no matter what is happening to you.
According to the Nigerian Institute for Social & Economic Research (NISER), about 73 per cent of SMEs in Nigeria raise their funds through bootstrapping (personal savings), about 2 per cent obtain theirs through financial institutions, and 0.21 per cent funds their businesses from other sources. From the above analysis you can see that the easiest way that majority of the people raise money for their business is through personal savings.
But if you are interested in obtaining loans from financial institutions you must do the following. Banks and other financial institutions that give funding to businesses are never Father Christmas; therefore don’t expect them to handle you with kid gloves when it comes to analyzing your proposal for funding. You must realize that they must take adequate care of the funds in their coffers and therefore must be careful in the disbursement of those funds.
Accessing loans from banks and other financial institutions:
The truth is that banks (Commercial, Merchant and Development Banks) give credit facilities to Small and Medium Enterprises in Nigeria. They do give, but what are the conditions you must meet before you get such facilities from the banks?
Before giving you a loan, the bank needs to ascertain that you are credit worthy and that your business has grown to a certain level before needing further funding.
These banks and financial institutions have their own particular goals and interests. A bank set up for agricultural purpose cannot give you loan if you are not in that sector.
If need a loan, you must have a well written and constructed business plan that will clearly show the bank the direction of your business activities.
There must be a clear financial record of your business activities in the past before you ask for financial assistance.
Finally you must have a collateral or guarantor that will give comfort to the financial institution that they will eventually get their money back.
Many of the banks have burnt their fingers in the past giving loans to SMEs as the loans were never used for what it was intended for. Some people lie about their intentions when applying for loans from banks and other financial institutions, therefore they have failed even before starting the race.
Stay with us for about SMEs this year.
Our company is one of the best companies in Export and Importation businesses in Nigeria today, we train individuals and corporate organizations on how to do Export, Major and Mini Import business the right way; if you are interested, please contact the admin of this forum now.
The year has just started and many small scale business owners are planning on how to raise finance for their business in the New Year. Serious planning and goal setting have started in many companies, but the most important is how to source for finance to execute those plans.
The importance of Small and Medium Enterprises (SMEs) in any country especially Nigeria cannot be overemphasized. SMEs make up a sizeable percentage of businesses employing quite a lot of Nigerians these days. They constitute one of the bedrocks of economic development in the nation; therefore it is expected that the government should accord the sector the utmost priority it deserves.
But is it so in Nigeria? I can say no; because many small scale business owners in Nigeria go through so much stress to get funding for their businesses despite being the engine room that drives the economy of the nation.
Therefore what are you going to do as a small scale business owner in the year 2022 to raise the much needed capital to finance your business operations? From experience we advise our clients who own and operate small scale businesses not to obtain loans from loan sharks. These harsh loan companies are merciless and don’t care whether your business is passing through some special difficulties or not. They are only interested in getting back their loans no matter what is happening to you.
According to the Nigerian Institute for Social & Economic Research (NISER), about 73 per cent of SMEs in Nigeria raise their funds through bootstrapping (personal savings), about 2 per cent obtain theirs through financial institutions, and 0.21 per cent funds their businesses from other sources. From the above analysis you can see that the easiest way that majority of the people raise money for their business is through personal savings.
But if you are interested in obtaining loans from financial institutions you must do the following. Banks and other financial institutions that give funding to businesses are never Father Christmas; therefore don’t expect them to handle you with kid gloves when it comes to analyzing your proposal for funding. You must realize that they must take adequate care of the funds in their coffers and therefore must be careful in the disbursement of those funds.
Accessing loans from banks and other financial institutions:
The truth is that banks (Commercial, Merchant and Development Banks) give credit facilities to Small and Medium Enterprises in Nigeria. They do give, but what are the conditions you must meet before you get such facilities from the banks?
Before giving you a loan, the bank needs to ascertain that you are credit worthy and that your business has grown to a certain level before needing further funding.
These banks and financial institutions have their own particular goals and interests. A bank set up for agricultural purpose cannot give you loan if you are not in that sector.
If need a loan, you must have a well written and constructed business plan that will clearly show the bank the direction of your business activities.
There must be a clear financial record of your business activities in the past before you ask for financial assistance.
Finally you must have a collateral or guarantor that will give comfort to the financial institution that they will eventually get their money back.
Many of the banks have burnt their fingers in the past giving loans to SMEs as the loans were never used for what it was intended for. Some people lie about their intentions when applying for loans from banks and other financial institutions, therefore they have failed even before starting the race.
Stay with us for about SMEs this year.
Our company is one of the best companies in Export and Importation businesses in Nigeria today, we train individuals and corporate organizations on how to do Export, Major and Mini Import business the right way; if you are interested, please contact the admin of this forum now.
