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5 ways of increasing the chances of startups getting loans in Nigeria

One of the hardest things to do in life is starting a business, more so if you live in a third-world country like Nigeria. One major deciding factor that determines if a business thrives is the in-flow of cash. And due to the present covid-19, induced economic crisis ravaging most parts of the world, getting funding for your start-up has become more herculean than in previous years. Nevertheless, companies are still springing up around the world as people try to make a living.

The following are ways to increase your chances of receiving loans in Nigeria:

  1. Business Plan

The most obvious thing a startup must have, asides from the business idea, is an elaborate plan. A business plan is a formal written document containing business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. It also describes the nature of the business, background information on the organization, the organization’s financial projections, and the strategies it intends to implement to achieve the stated targets. How good your business plan is, says a lot about how prepared you are to start the business because in some cases your business plan does a lot of talking. It is this properly written document accompanied by your assurance to stick to it that will convince the banks that you can pay back their money.

2. Capacity:

No matter how brilliant your business plan is, if it’s not going to yield reasonable profits capable of paying back the loan on time, the lender would not be convinced of your ability to pay up the loan hence you would not get the financial support you seek. So, always structure your plan in a way that projects positively the profits and growth of your business.

3. Results

: These are basically proof that your business model works. This could be in the form of clients you have provided your product/service no matter how small. This tells potential lenders that you’re an authority in that field, that your business is already providing solutions to problems and that people are actually interested in your product/service. Other results you could show include metrics and engagements on social media or websites.

4. Get a talented team that shares your vision:

 It is often said that a company is as good as its workforce. In this case, your business is as good as your team members. Potential lenders often look at the quality of people you have on your team to make a prediction if the business is going to be successful or a failure. Get talented and enterprising people who can key into your ideas and give their all to achieve the set goals. You could offer them a percentage of the company for their services as payment of salaries is usually not feasible at the early stages of the business.

5. Good reputation :

 Banks wouldn’t want to give loans to someone who has had a bad record with another bank when it comes to borrowing. So, always pay your debt.

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