Grants Available For Small Businesses In Nigeria

Grants For Small Businesses In Nigeria

In this article, we’ll be looking at what grants are, the grants available for small businesses in Nigeria, some of the positive effects of grants, the conditions and requirements for grants in Nigeria and how to apply for grants as a small business owner in Nigeria.

Nevertheless, the foundation for everything successful business is financing, and for every start-up and small enterprise, capital. Looking at the state of the economy in a country like Nigeria, the backbone of every market or industry is business but one of the major issues faced by business owners is the lack of funds. Without adequate funds, a business is likely to fail.

From helping start or expand operations, develop new products and services, access new markets to helping reduce the cost of imports, production, workforce, distribution, exports and capital support, the benefits of grants to small business owners cannot be overemphasized.

Unlike loans, grants are usually given without any obligation for them to be repaid, and without collateral or interest although the means of getting them can be a competitive process at times.

Grants can also vary from program development support to capital funding support, in-kind donation grants, matching grants, etc.

So, if you are a small business owner in Nigeria and you are faced with the challenge of funding, then this article is for you.

What Is Grants?

We will define grants using business terms. Grants are known to be a reward that usually come in the form of money (mainly for financial assistance) given by an entity like a government, foundation, or a company to an individual or small business to support them and their start-up.

Unlike loans, grants are given as gifts which may require you not to pay them back.

What Are The Types Of Grants?

Below are the different types of grants you should know about:

1. Federal Government Grants: Federal government grants also known as federal grants are those grants programs offered by the Federal Government to support small businesses. They only give out these grants for beneficial projects but doesn’t include any other financial assistance like a loan.

2. State And Local Grants: As the name sounds, they are grants awarded by the state and local governments to support small businesses.

3. Small Business Administration Grants: This is also known as “SBA Grants”. They offer various grant programs to help small businesses get funding. Meanwhile, their major role is to assist small businesses that find it hard to obtain finance.

4. Private Organizations/Foundation Grants: There are some private organizations that provide grant programs to support small businesses. The main aim of this grant is for the purchase of needed equipment or business expansion.

5. Corporate Grants: Some corporations also award grants to small businesses, most especially businesses that are working to create more awareness for their community. However, these corporate grants are mainly for beneficial purposes.

What Is The Purpose Of A Grant?

The purpose of a grant is for business expansion. This is to say that grants are meant to fund your business projects and ideas into reality and at the same time stimulate the economy.

Most times, the givers of these grants offer the program to eligible recipients to benefit from them as well. The benefits don’t literally mean that they will be repaid, but rather to improve the visibility of the entity. Although some grants may require you to repay in years to come.

So to sum it up, the purpose of a grant is to provide support that will be beneficial. And that’s why grants are not for everybody but for the eligibles.

What Are The Advantages And Disadvantages Of Grants?

Advantages Of Grants

1. Grants helps to boost businesses of all sizes.
2. They are great ways of raising capital for your business without you getting into debt.
3. Unlike a loan, you don’t have to repay the money gotten from grants (though it varies).
4. There is a lesser risk since it does not involve any collaterals or interests.
5. It is known to be an easy money to fund your business.
6. Resources and networks that are difficult to obtain are made easy and accessible through business grants.
7. Grant’s can give you a boost of confidence in your business.

Disadvantages Of Grants

1. Grants are very difficult to receive.
2. It involves a lot of paperwork which after you may still not get the grant.
3. There are lots of difficult terms and conditions linked to it. Which means you still have to stick to the terms once you get the money.
4. High competition from other businesses to obtain grants.

How Hard Is It To Get A Business Grants In Nigeria?

Just like we said on the disadvantages of grants, grants are very difficult to obtain, most especially when your business is not up to the standard required. Also, the competitive process is very high as other small businesses are also striving to get the same grant.

However, with these points, the odds of obtaining any single grant may be generally low.

All the same, to make it easier for your business to qualify, you have to first establish it to the eligibility standard of the grant entities.

Who Can Apply For A Small Business Grants?

In general, there are many grants available for small businesses in Nigeria, but these grants aren’t available for paying off debt, covering your expenses, or just for starting a business.

Unfortunately, if you are looking for a grant just to start up a business, then it will be hard to find such grants. Moreover, grants are meant for business expansion and not otherwise. And once you understand the concept of business grants, it will give you the knowledge of who is eligible to apply for them.

Furthermore, determining your eligibility to apply for or receive a grant first comes by identifying the type of organization your business represents and if such business is eligible for a business grant.

Secondly, you can apply for a small business grant when you have an existing business with a strong business plan. In addition, your business must be registered to apply for a small business grant in Nigeria.

Finally, in answering the question of who can apply for a small business grant. Your business should meet the specific criteria of the grant program to be able to apply for a business grant.

What Are The Different Types Of Grants Available For Small Businesses In Nigeria?

There are different grants for small businesses in Nigeria and below are the most common ones available in Nigeria:

1. African Young Entrepreneurs Empowerment Nigeria (AYEEN): AYEEN aims at the development and success of entrepreneurs through training, business mentorship, and funding.

African Young Entrepreneurs Empowerment in Nigeria was established in 2014 and over the years it has gotten accolades for its wonderful performance.

Their mentorship program covers all business sectors giving direction and necessary funding to upgrade business profitability. Also, their empowerment and funding are only for smart business ideas.

Eligibility Criteria

1. You must be an entrepreneur
2. You must be a Nigerian citizen
3. Your business must be located in Nigeria

Website: https://ayeorganization.com/

2. Central Bank of Nigeria (CBN) Grants: The CBN launched a grant program known as Micro, Small, and Medium Enterprises Development Fund (MSMEDF) in recognition of their significant contributions from the Micro, Small, and Medium Enterprises to the economy.

However, the eligibility criteria include:

1. Your business must be a micro, small, or medium-scale business.
2. Your business must fall under the following:

  • Trade and general commerce
  • Agricultural value chain activities
  • Artisans
  • Services
  • Technologies
  • Cottage industries

Get more information about the CBN grants here.

3. Bank Of Industry (BOI): BOI is a Development Finance Institution (DFI) that offers long-term funding and grants to Small and Medium-sized Enterprises (SMEs) and also to larger businesses.

Eligibility Criteria

1. Your business must have the capacity to employ a lot of people.
2. Your business must be under the category of production or in line with raw materials.
3. Your business must promote regional collaboration.
4. Your business must be commercially viable.

Get more information about BOI here.

4. Tony Elumelu Entrepreneurship Program: This program was established by Tony Elumelu Foundation to support men and women on their entrepreneurship journey. So, as a small business looking for a business grant to support your business, this grant program can be the perfect grant for you.

Meanwhile, for you to apply for the Tony Elumelu Grant, you must be 18 years and above.

For more information about Tony Elumelu Grant visit here.

5. YouWin Connect Nigeria: YouWin also known as Youth Enterprise With Innovation in Nigeria is part of the grants available for small businesses in Nigeria. It was established to help the youth between the ages of 20 to 45 years old expand their business.

Eligibility Criteria

1. You must be between 20 to 45 years of age.
2. You must be a Nigerian citizen.
3. You must have a means of identification.
4. You will need a strong business plan.
5. Your business must be within Nigeria.

For more information about YouWin Connect Nigeria visit here.

6. Nigeria Youth Investment Fund (NYIF): This is also known as the National Youth Employment Fund. Visit their website here to get more information.

7. Lagos State Employment Trust Fund (LSETF): The Lagos State Employment Trust Fund offers financial support to small business enterprises in Lagos State. They aim to tackle unemployment by helping Lagos residents to grow and expand their Micro, Small, and Medium Enterprises (MSMEs)

You must be 18 to 35 years old to be eligible to apply. Meanwhile, for more information visit here.

8. GroFin Fund: This is another fastest-rising financial institution in Nigeria that offers grant programs to help small businesses. Check out their website https://www.grofin.com/ to get more information.

Conclusion

The above are some of the grants available for small businesses in Nigeria. Although getting a business grant in Nigeria may be difficult, but to increase your chances of getting approved by any grant entity, you have to first develop your business to a standard and also ensure that your business corresponds with the grant programs available.

Most importantly, understand the requirements and make sure you fulfill them.

Ambassador Victor Chidera
Ambassador Victor ChideraAmbassador Victor Chidera is a business consultant, writer and a blogger. He provides lots of professional and expert advice to small businesses, entrepreneurs and organizations. He has many years of experience in business, teaching field, and research work. And his aim is to provide business articles that matters to you both nationally and internationally.
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