How To Raise N10m Capital To Fund Your Business

With the current economic reality, raising 10 million Naira to fund your business is not an easy task. This is even more difficult when you are starting a new business. However, raising as much as 10 million Naira can be easier than you think, and in this post, I am going to show you a simple fund-raising model powered by the Central Bank of Nigeria (CBN) that many people may not know about.

 

There are numerous ways to raise funds to finance your business, but they come with difficulties and limitations, so I will skip the lists and get to the point. Did you know that your bank can give you a whopping ten million Naira (N10,000,000) to support your business without any form of collateral? I bet you didn’t know this! With the current Central Bank of Nigeria (CBN) policy, banks are mandated to provide their customers with up to N10,000,000 to finance their business without requiring anything pledged as security.

What Are The Requirements?
You will be surprised at the very simple requirements that qualify you to get a 10 million Naira credit facility from your bank. As you read further, you will get a breakdown of how you can meet these requirements in less time than you would have ever imagined. Below are the basic requirements of must banks:

1. Registered business or company: For any bank in Nigeria to give you any credit facility to the tone of ten million, you are required to own or operate a duly registered business. This can be either a limited liability company or business name. Registering your business is easy you can do that on the website of Corporate Affairs Commission (CAC). https://pre.cac.gov.ng/

 
2. Cheque Booklet (commercial banks only): As part of the banking policy for you to get the amount of fund you need, you may be required to drop off a signed undated cheque of the amount you you are requesting for with your bank. This basically serves as a collateral. Must bank will require you to get the cheque of the same business/company name with another bank. Some bank(s) may also ask you to bring a bank cheque from someone who will stand as a guarantor (though this is rare).

3. Transaction Volume (TV): This refers to the inflow and outflow of your transactions. It essentially determines the amount your bank will eventually provide to you—similar to your credit score. When you receive a credit of one million Naira (N1,000,000) into your account, it is inflow. When you transfer one million Naira (N1,000,000) from your account, it is outflow. To provide you with the desired amount, your bank sums your transaction volume over six months and offers you 15% to 50% of your transaction volume as a facility to fund your business. Some banks may use both inflow and outflow to determine your transaction volume, while others use only your inflow.


Let’s Do The Math!
To secure a capital fund of ten million Naira (N10,000,000), your inflow within six months should reach a minimum of forty million Naira (N40,000,000). This is on assumption that your bank will give you 15% of N40,000,000

Simple Trick To Get N40m Transaction Volume

I know you might be wondering how you could achieve that volume of transactions within six months, and you may think it’s not possible with your current financial transactions. With this simple trick that I will show you in a moment, you can achieve over N40m in transaction volume in less than one month.

There are two ways to achieve this: self-transactions and third-party transactions. If you conduct transactions of up to N200,000 in a day, you can generate a transaction volume of N40m all by yourself. The key is to move that amount of N200,000 in and out of your account at least eight (8) times a day. N200,000 x 8 times a day x 30 days of the month equals N48,000,000. Alternatively, you can ask your friends and family to transfer funds to your account and return the money to them. The goal is to build your transaction volume. You may also form a group of like-minded individuals to achieve this. However, be careful about who you involve to avoid losing the money you are trying to secure.

Approach your bank: Once you are confident of a good transaction volume, approach your bank for a loan. Your account officer or business manager should be able to tell you how much your account is eligible for. Complete the paperwork and get the loan disbursed to your account. Ensure that you review the loan terms and that the repayment pattern is convenient before you accept the loan offer. Good luck!

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This article was written by:

    J. Mone.

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Disclaimer: The information provided in this article is intended for informational and educational purposes only and does not constitute financial, investment, or legal advice. The author, J. Mone, is not a licensed financial adviser or consultant. While every effort has been made to ensure the accuracy and relevance of the content, it should not be relied upon as a substitute for professional advice tailored to your individual circumstances. Before making any financial decisions or taking action based on the information provided, you should consult with a qualified financial adviser or other appropriate professionals to ensure that it is suitable for your specific needs and situation. The author and publisher disclaim any responsibility for any loss or damage resulting from the use of or reliance on this information.