For any start-up idea to move from the
idea stage to realization, it requires a lot of resources, and one thing that
can quickly take a great idea from a hobby to a full-blown business is money.
Unfortunately, raising funds, particularly, getting a loan for a startup can be
an ordeal for anyone, especially Nigerians. Jumia Travel, Africa’s No.1 online
hotel booking site shares 4 ways Nigerian founders can boost their chances for
start-up loans.
Ensure
your personal capital is substantial
It may come as a surprise, but lenders
actually want to see that you have some “skin in the game” before they can
consider your application or request. For instance, some banks will typically
want you to have at least a 20% down payment on a conventional loan for a new
business. Ensure you save up as much money as you can when you are planning to
launch a startup, and be ready to show documents confirming your personal
income and investments.
Prepare a
business plan
Business plans are very essential for
any founder who is looking to get a loan. Lenders want to see a solid,
well-thought-out business plan, as they believe that a business plan is a
roadmap for how the business will fare in the next few years. Work towards
discussing at least the following in your business plan: description of the
service or product your startup will provide, experience and qualifications for
you and (if applicable) your management team, market analysis, marketing plan,
financial projections, and basically, other information that you know the lender
may require.
Emphasize
prior industry and management experience
From any lender’s perspective,
experience is considered the true teacher of all things. When searching for
startup financing, your past experience is essentially predictive of your potential
for success as a business owner, hence the likelihood that you will pay back
the loan. Therefore, when submitting a resume with your loan application, it is
essential that you highlight relevant industry and business management
experience. For instance, if you want to open an online book store, it really
helps to have a few years under your belt as a librarian at a leading
institution.
Consider
putting up a collateral
Collateral basically includes home
equity, stock, cash savings or deposits, equipment, business inventory, or
other hard assets. To increase your chances of getting a loan, take out time
and closely peruse your personal assets, then decide on which of your assets
you are willing to put up as collateral. If you are able to provide 100% collateral
for the loan amount you are requesting for,
your chances of acquiring a business loan will automatically be higher
than those who could not. Keep in mind however that when you pledge the asset
as collateral and your business goes under, the bank has the right to
confisticate the asset and sell it to recoup its money.
Leave your comment.
No comments:
Post a Comment