Money makes your business go. It is not advisable to go to a bank to borrow money when you’ve just started in business. Banks normally make loans only to businesses with a history of operation. A banker’s primary concern is your timely repayment of loans. The fuel to make loan payments come from your cash flow. So your management of cash flow is of utmost interest to your banker and you must convince the banker that you are an expert in making cash flow projections that safely include your loan payments.

Don’t let lack of funds discourage from starting your business. Many businesses can be started with little or no money. Thus, you can start small and grow step by step. Personal savings should be the primary source of your funds for starting a business. So start in time to accumulating cash through your personal savings.

How Much Money Do You Need?

Here you determine all your cash flow by spelling out all of your sources of income and expenses. For instance, your expenses lists can include:

  • Buying supplies and inventory while waiting to get paid
  • Paying payroll and rent
  • Buying equipment and fixtures
  • Getting a computer
  • Buying the business

Prioritize and review your alternatives such a rent or lease.

 Where to Get the Money

There are a wide variety of options when it comes to funding.  Below is a list of possible options for a small business to research and consider.

Important issues to consider when sourcing for funds:

  • Cost
  • Payback program/terms
  • Loan size

Lending options for small businesses:

  • Personal Savings
  • Friends and Family
  • Banks/Credit Unions
  • Home Mortgages
  • Peer-to-Peer (Prosper, Lending Club)
  • Micro-Finance Options
  • Crowd Funding
  • Equity Funding
  • Venture Capital
  • Angel Investment
  • Commercial Mortgage
  • Specialized Lenders (Industry expertise, auto, business brokers, high-tech, specialized equipment, etc.)
  • Lending Companies
  • Finance Companies

Important Documents to have when seeking funds for your business.

Be ready to answer questions about your business, and be ready to highlight your financial performance both in the past and in the future. You will be more impressive if you have carefully thought out and become familiar with your plan. Bring in your accountant if you need help.

Be prepared to tell investors or lenders why you need the money. Saying “I just need the money,” does not inspire confidence or the fact that you have thought it through.  Below are some of the documents required:

  • Business financial statements
  • Business tax returns
  • Business plan with budget or projection
  • Personal financial statements
  • Personal tax returns
The Do’s and Don’ts to seeking funding for your business


  1. Live frugally and begin saving up money now to start your own business.
  2. Use your cash flow projection as your key tool to determine financing required.
  3. Complete a business plan for meetings with potential lenders or investors.
  4. Have your business plan critiqued by appropriately informed people. Revise as necessary.
  5. Ask the Small Business Administration for advice. (Have your business plan with you.)
  6. Maintain a current financial information packet including financial statements and recent tax returns.
  7. Consider bartering services if appropriate.
  8. Use your Lawyers as referrals to lenders.
  9. Keep your lenders informed of your progress and any potentially adverse events.
  10. If you need a loan for 6 months, ask for 12 months to be on the safe side.


  1. Expect a bank to help finance your new business.
  2. Ask for a loan without a detailed repayment plan in hand.
  3. Overlook vendors and landlords (for tenant improvements) as sources of financing.
  4. Avoid being the bearer of bad news to your lender.
  5. Ask for less than enough to meet your realistic needs.
  6. Exaggerate. (Instead, be conservative in your presentations to lenders.)
  7. Write a check without adequate funds in your bank account.
  8. Risk losing your home by taking a “Home Equity” loan unless you are certain of your ability to repay.
  9. Sign personal guarantees unless absolutely necessary.
  10. Budget or spend money on expensive entertaining of potential investors or lenders.

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NIGERIAN SOCIETY OF CHEMICAL ENGINEERS FOUNDATION, an organ of the NIGERIA SOCIETY OF CHEMICAL ENGINEERS (A Division of Nigerian Society of Engineers) …. National Development through Chemical Engineering

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