Ayokunle Fatokun

Reasons for Business Growth

• Increase in Profitability
• Increase in Sales
• Increase in Asset Base
• Increase in Brand Visibility
• Change or Improvement of Structure
• Branch Expansion
• Expanded Production Capacity
 Some SME Facts
• Access to finance is a global challenge for
Small Businesses
• About 85% of Small Business owners start
business with personal savings
• Only about 9% accessed loans at startup
• About half of business owners list finance
as a challenge
• Business structure, records and collateral
are the biggest challenges to accessing
credit for business.
Financing Your Business
SOURCES OF FINANCE
Deposit Money Banks
Development Finance Institutions
Micro-Finance Banks
Government Intervention Funds

MSMEDF RSSF
Intervention Programmes

YEAP
Market Place (Peer to Peer) Lending
Crowd Funding
Equipment Leasing
Angel Investor/Venture Capital
Supplier Credit
 General Terms of CBN Funds
• Low Interest Rate
• Moratoriums (?)
• Brownfields vs Greenfields (?)
• Focus Groups
 Requirements
MSMEDF
• 60% targeted at Women
• N500k max to Micro-Enterprises
• N50m max to SMEs
• Prescribed Interest Rate – 9%
• Clearly articulated business plan
• Proper record keeping for existing
businesses
• Clean Credit Check
What makes you attractive to an Investor?

• Good business idea and concept

• Realistic and focused business plan
• Clear exit plan
• Clear opportunity for reasonable profit
• Growth potentials
• Risks well identified and mitigated
• Adequate oversight for the business
 Do’s
• Start saving money for your business today
• Develop your cashflow statement to help you
determine your funding needs
• Write your business plan and have it ready for
meetings with lenders/investors
• Review your business and strategic plans
periodically
• Make use of professionals, don’t scrimp!
• Err on the side of caution, by asking for longer
tenors than you require.
 Don’ts
• Expect a bank to finance your new business
• Ask for a loan without a clear repayment plan
• Ask for less than you require
• Exaggerate! Better to underpromise, and …
• Write a cheque without adequate funding in
your account!
• Sign personal guarantees unless you are sure
and its absolutely necessary
• Spend on entertainment and aesthetics, at the
cost of actual business expenses