7 Ways To Get Funds For Your Startup Fashion Business In Nigeria
All businesses have certain things in common and finance is one of them. From fashion businesses to agricultural businesses, if there is no fund to kickstart and maintain the business it'll die a premature death.
With the startup failure rates recorded all over the world, and in Nigeria, anyone that still chooses to walk the path of entrepreneurship is brave. Luckily, there are various ways fashion entrepreneurs can get the required funds for their startup. Here are 7 of them;
Ways to Get for your Fashion Startup
1. Family and Friends:
When you're at your lowest point, your family and friends are usually the ones that are there to help you and pick you up. They are the people that love you and care about you, your dreams, and your visions.
Usually, they are a surer and easier source of financing than many of the others listed below. In approaching them with your business idea though, you need to show them that the idea has potential and is viable.
Also, you have to be careful to work hard and not lose the money they have invested in your business so they can trust you at other times. Never be shy to approach your biggest fans and supporters for financial assistance when you need it.
Self-funding, also known as bootstrapping, is an effective way of startup financing, especially when you are just starting your business. Many times, even your family and friends want to see you put some of your own money into your business before they help you out.
Bootstrapping can be done using either money you have saved up over time or money you get from a 9-5 job. This method can be hard to build a brand with but it tends to make you want to push harder into achieving and fulfilling your dreams.
Grants, unlike bank loans, are funds given to startups that do not need to be repaid. Grant opportunities for fashion startups in Nigeria include Lagos State Employment Trust Fund (LSETF), Tony Elumelu Entrepreneurship Programme (TEEP), and World Bank Grants amongst others.
Grants are usually a great and reliable way to finance your startup.
4. Bank of Industry (BoI):
The Bank of Industry provides several funds for entrepreneurs at a single digit. BoI has been rated by many local and international agencies as one of the best-managed banks in the world.
The BoI has a fashion fund for fashion designers and other players in the fashion industry and a Graduate Entrepreneurship Fund (GEF), for serving National Youth Service Corps (NYSC) members amongst others.
For the GEF, candidates are allowed to submit their business ideas, which are then reviewed by a team of experts. The NYSC members whose ideas are marketable and bankable are then selected, trained for four weeks and given between N500, 000 and N2 million,
Funds from BoI can be accessed in 3 easy steps;
- Write a formal application letter to the bank,
- Complete the of BOI Questionnaire, and,
- Submit the Forms and Questionnaire.
5. Angel Investors:
Angel investors are individuals with surplus cash and a keen interest to invest in upcoming startups. It is not uncommon for them to be entrepreneurs or former entrepreneurs themselves.
Angel investors usually invest in your business in exchange for convertible debt or ownership shares. They also work in groups of networks to collectively screen the proposals before investing. They sometimes offer mentoring or advice alongside capital.
Locating an angel investor is easy, you can leverage on LinkedIn premium, Twitter or other professional sites to find them. Networking and attending business summits and conferences makes it easier to connect with a potential investor.
To get an angel investor to fund your brand, you need to have a registered business name, detailed business plan, a winning business proposal, and be clear about your terms. It is important to note that while startups may be desperate for funding, they should protect their ideas from being stolen by getting in touch with a legal practitioner before approaching an angel investor.
6. Venture Capitalists (VCs):
Venture capital firms are investment companies that specialise in funding new companies, entrepreneurs, and disruptive businesses. These firms usually receive a significant share of equity in the company they invest in as a result of the risk involved.
VCs provide expertise, mentorship, and act as a litmus test of where the organisation is going; evaluating the business from the sustainability and scalability point of view.
7. Cooperative Societies:
Startup fashion businesses in Nigeria can leverage on cooperative societies to get funds for their businesses. Quite often, the cooperative societies will do a background check on the startup to be sure it is trustworthy.
Funds of this nature come with interest and you pay back as agreed under the terms and conditions. If you choose this method, you have to be sure you trust the cooperative society well enough.
Other funding options include the Targeted Credit Fund (TCF) set up by the CBN in collaboration with the Federal Ministry of Finance, Budget and National Planning and the Creative Industry Financing Initiative set up by the CBN in collaboration with Nigerian banks.
As seen above, there are many options open to start-up fashion businesses and you can take advantage of any to help build your brand.
Do you know of any other funding options that are available to fashion startup businesses in Nigeria? Please share them with us in the comments section below. Don't forget to hit the like button if you enjoyed this read 🙂.