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How To Finance A Small Business Idea In Nigeria (No Investors, No Bank Loans)

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You don’t really need a professional investor loan from banks or financial institutions to start a small business. There are different ways you can start your small business idea without investors or financial institutions. In this article, we’ll explore those other options available for small business ideas.

No bank loan, no investor’s money

It is not every type of business that really requires getting a loan from a financial institution or finding professional investors who will pump in some cash. Sometimes all you need to launch your small business are already within your reach. This is true, especially for small businesses that do not require a substantial amount of money to get started.

Who is an investor?

An investor is a person that allocates capital with the expectation of a future financial return or to gain an advantage.


Basically speaking, a professional investor is a person that puts in their money into your business and expect to make profits from the business in the future. Such investors include banks (loans), venture capitalists and angel investors.

Why you do not need investors

If your small business doesn’t require huge capital investment to get started, looking for professional investors might not be the best idea.

Also, when starting a small business you might want to deal more with people who would invest in you because they believe in you than to deal with the professional investors who might care more about financial performance analysis, proof of concepts, collaterals, and all the other concepts in the investment world.

How to finance a small business without investors

So, how else can I finance my small business if I don’t have to get money from the bank or investors?

Start within your capacity

By starting within your capacity I mean starting with what you have at your disposal instead of getting loans or borrowing money to start it big.

For example, let’s say you want to start a prepared meal delivery service, here are some things you can do to cut costs instead of getting a loan from the bank or getting funding from investors:

  • instead of renting a shop, start the business from your home. This way you avoid having to pay rent for a shop.
  • don’t hire a web developer at this stage to build a professional website for your business. Instead, use social media platforms such as Instagram and Facebook to bring your business to your potential customers.
  • instead of trying to cover the entire city, start withing your area and expand from there.
  • use the services of dispatch riders (instead of your own vehicles) to deliver meals to your customers. With this approach, you can cover more places at a lesser cost.
  • etc.

The idea here is finding alternative, yet effective ways, to start and succeed in your small business by exploring the various options available at the moment. As the business grows, you can expand and exploit bigger channels and opportunities.

Build it on the side

Another way to finance your small business idea is to run the business on the side. This typically means being on a job while nurturing your small business. Many people have started their business this way.

Starting the business on the side is a great idea because you have a salary you can depend on in case things don’t go all well with the business you’re trying to build.

Also, because you have a job that is currently taking care of your financial needs, you will have more peace of mind while growing your business. But if the small business is your only hope for income then you might have a lot to worry about.

Get financial support from family and friends

Getting loans or even free financial support from family and friends can help you get started with your small business.

Sometimes the difficult part is asking. Some people are shy to ask for help; some feel ashamed to do so. But there is nothing wrong if you let your friends or family understand the business goal you want to pursue. A friend with good understanding and the capacity to help will most likely help.

Here are some tips when trying to fund your business with support from family and friends:

Don’t expect free money: of course, you’re not entitled to their hard-earned money. Your close friends are the most likely ones to lend you some money. If a friend says he/she is not able to help at this time, that is totally fine. Don’t feel bad towards that person.

Be honest about the risks: Let anyone lending you money know the risk involved so they know how much they are willing to risk. The reality out there is that most new businesses fail. Statistics have shown that. So, this is not to wish you some bad luck or something like that. Make sure you clearly explain to the person what risks so they don’t risk more they can afford to lose.

Use crowdfunding sites

Crowdfunding sites are websites where you can get funding for your business (without collateral) from anyone out there on the internet who keys into the business idea and the solution it offers:

Crowdfunding is a way to raise money from a large number of people. Large groups of people pool together small individual investments to provide the capital needed to get a company or project off the ground. Individuals, charities or companies can create a campaign for specific causes and anyone can contribute.


To get started, here are the top 3 crowdfunding websites to checkout: KickstarterIndiegogo and Patreon.

Bonus: what about checking out these other small business ideas? Or, get started with lucrative hand works that can make you money.

Wishing you success!

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