How to finance your SME

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SMEs are the foot soldiers of any economy. In developing economies, they are even more important. Small businesses largely do not make use of large machinery but collectively provide employment to many people.

These ‘local’ enterprises represent 90% of businesses and account for more than 50% of employment worldwide (World Bank).

According to World Bank estimates, 600 million jobs will be needed globally to absorb the growing global workforce. This makes SME development a high-priority activity for governments around the world.

In Nigeria and many emerging markets, most formal jobs are created by SMEs. However, access to funding is a critical factor in the state of SMEs within an economy. Where there are no robust funding frameworks designed to particularly cater to SMEs, fewer SMEs survive their beginning years and even fewer become profitable and sustainable over time.

According to the World Bank, access to finance is a key constraint to SME growth and the second most cited obstacle facing SMEs in emerging markets and developing countries such as Nigeria.

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Solving the problem of SME financing at scale triggers effects on the economy that cannot be accurately quantified in terms of the monetary return value. But still, SMEs are less likely to obtain loans from banks than large firms.

Most small businesses rely on the personal funds of their founders and loans from family and friends to initially run their businesses. A lack of financing for SMEs has abruptly ended businesses or systematically driven large percentages of these SMEs out of business over time.

Read Also:  United Capital Grows PAT by 53.9% to N991m in Q1 2020 Results

What we do

A key area of interest for us at United Capital is the financing of these SMEs and young businesses. This is because they have a direct bearing on the health of the economy and ultimately the economic development of African countries.

We are also driven by our ideal of Africapitalism which bets heavily on the potential and power of private enterprise to drive economic change across the continent.

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We have set up the SME Financing desk to assess SMEs and give them access to cheap and professionally structured capital to give them the best chance of survival, expansion, and scaling.

Our approach for our SME Finance Platform is holistic, combining our vast network of relationships with providers of capital with our world-class advisory and deal structuring expertise. The result is a financing service with fantastic rates and invaluable advisory.

SME financing in Africa is a strategic move. It strengthens our economies from the ground up, creates new jobs within each state and opens new highways to economic stability and prosperity for nations. “Our SME Finance Platform is designed to support businesses in Agriculture, Construction/ Real Estate, Healthcare, ICT (Information and Communication Technology), and Natural Resources. You can learn more about it and apply on our InvestNow platform by clicking here.

United Capital

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