The challenge of raising capital for a new business always is a big headache for many starting entrepreneurs in Nigeria. The banks have become a no-go area because of the ‘killing’ interest rate and of course near total unwillingness to give loans to untested businessmen who don’t have enough collateral.

If you are faced with challenges of raising money for your business, a little bit more creativity may be what you need to get the much needed funds. Likely places you should look for funds for your business (be it for expansion or startup) include;

a) Cooperative Societies: This is an often overlooked source of funding for small and medium businesses. The key is to search for cooperative societies around your area and join even before you need the funding. Become conversant with the procedures and conditions for obtaining a loan from them before you make a move.

The negative here is that there are only few sectors like agriculture that have functional cooperatives in Nigeria.

b) Private Loan Firms: The business terrain in Nigeria is such that there are available privately run loan and financing organisations that give out loans to borrowers for variety of purposes. One drag on this idea is that these modern loan sharks are in business to make profits (just like the banks) and will require that you deposit items of higher value as collateral before you get the loan.

If you end up unable to pay before the expiration of the loan term you forfeit the collateral. The only positive is that you may not through rigorous checks (as in banks) once you have a reasonable collateral to give. Going to the loan sharks should be the last option.

c) Seek Partners/Investors Online: The advent of the internet has provided opportunity for so many business people to connect and get their business needs solved.

Join business networking sites like LinkedIn and become a member of relevant business groups on the site. If your idea is unique, networking will surely get you in touch with angel investors who are on the lookout for new, potential ideas that hold promise.

Local discussion forums like Nairaland are also a good place to post information on your funding need and get some interested persons to contact you for further discussions,

http://nairabrains.com/2011/09/5-places-to-get-funding-and-credit-facility-for-your-business/