Match the instrument to the cash flow, not to the ambition
Funding follows predictability. If your receipts are regular and secured, debt is cheaper and preserves your ownership. If your growth is uncertain but potentially large, equity carries the risk with you and charges you in ownership instead of interest. Applying for the wrong instrument is the most common reason a fundable business is declined.
Before approaching anyone, answer three questions in writing: what specific constraint does the money remove, when does the money come back, and what happens if the plan slips by six months. Every funder asks these, in some form, first.
The funding map
| Source | Typical use | What you must show |
|---|---|---|
| Commercial bank term loan | Equipment, expansion, refinancing | Two to three years of statements, banking history, collateral, tax clearance, often personal guarantees |
| Asset and equipment finance | Vehicles, plant, machinery | The asset itself as security, a deposit, and cash flow that services the instalments |
| Invoice discounting and receivables finance | Working capital against credible customers | Signed contracts or invoices, verifiable counterparties, and a clean receivables ledger |
| Trade and import finance | Purchase orders, letters of credit, inventory | Supplier and buyer documentation, margin deposit, and a track record of completed cycles |
| Development finance and intervention funds | Agriculture, manufacturing, health, women and youth-led businesses | Registration, tax standing, sector eligibility and reporting capacity |
| Grants and challenge funds | Pilots, expansion in priority sectors | A defined project, measurable outcomes and the ability to report against them |
| Angel and early-stage equity | Product proof and first repeatable sales | Traction, unit economics, a clean cap table and a credible team |
| Private credit and structured debt | Growth funding where bank criteria do not fit | Reliable management accounts, covenants you can live with, and security or strong cash conversion |
| Private equity and growth capital | Step-change expansion, acquisitions, buyouts | Audited accounts, institutional governance, management depth and a plausible exit |
Why fundable businesses get declined
Numbers that cannot be verified
Statements that do not reconcile to bank records, or accounts prepared only for tax. No credit committee approves what it cannot check.
Personal and business money mixed
Household expenses inside the company make earnings unreadable and margins unbelievable.
Outstanding statutory obligations
Unfiled returns, unpaid PAYE or pension arrears will stop a facility at the last stage, after weeks of work.
Unclear ownership
A share register that does not match the Corporate Affairs Commission filings, or undocumented early backers with informal claims.
No use of funds
A round number with no link to a constraint, a timeline or a repayment source.
Total founder dependency
If the business stops when one person is unavailable, the funder is lending to a person, not a company, and prices it accordingly.
What to prepare before you apply
A funding pack
Twelve to twenty pages: what the business does, how it earns, traction, the ask, the use of funds and the repayment or return logic.
A three-statement model
Monthly for twenty-four months, annual thereafter, with visible assumptions and a downside case.
A data room
Corporate documents, financials, tax and pension evidence, key contracts, licences, org chart and asset register — assembled before the first meeting.
Twelve months of bank statements
For every account. Funders read behaviour, not just balances: returned cheques, overdrawn periods and unexplained transfers all speak.
A shortlist, not a broadcast
Ten to fifteen funders whose mandate genuinely matches your sector, stage and ticket size, approached as a process.
How much can you raise, realistically
Funders size facilities against evidence, not need. Debt is typically sized against cash flow cover and the value of security. Equity is sized against what the business can deploy in twelve to twenty-four months and still show a step change. Asking for a multiple of what your records support signals inexperience and lengthens every conversation.
Where a business is not yet fundable, that is information rather than a verdict. Most of the gaps above can be closed in two to three quarters of deliberate work, and closing them usually improves the terms far more than shopping the same weak file to more lenders.
How Crimson Oak works on a raise
We score the business against eight institutional dimensions, close the gaps that would fail credit or investment review, structure the instrument that actually fits your cash flows, prepare the model, pack and data room, and run the process with a matched shortlist of funders. Where a business reaches our top readiness tier, we also invest alongside partners.
The principle does not move. Capital is introduced only once the business can absorb it.
Frequently asked
- How do I get funding for my business in Nigeria?
- Identify the constraint the money removes, choose the instrument that matches your cash flows, then satisfy that instrument's qualifying test: verifiable financials, clean corporate and tax records, documented ownership and a specific use of funds. Approach a matched shortlist of funders rather than the whole market.
- Can I raise funding without collateral?
- Yes, but not from most bank term lending. Invoice discounting, receivables and trade finance secure against contracts and customers, grants and intervention funds require eligibility rather than security, and equity requires no collateral at all — it takes ownership instead.
- How long does it take to raise business funding?
- Structured debt commonly takes two to four months once records are in order. Equity and private capital run six to nine months. Preparation, not the funder's decision, is usually the longest phase.
- Do I need audited accounts to get funding?
- For grants, angel funding and some receivables finance, credible management accounts that reconcile to your bank records may suffice. For institutional debt, private equity and any capital markets instrument, audited accounts are effectively mandatory.
- What is the cheapest way to fund growth in Nigeria?
- Usually the cash already trapped inside the business: receivables collected faster, inventory reduced, supplier terms renegotiated and pricing corrected. Many businesses that come to us for funding release a meaningful share of what they need from working capital before borrowing anything.
Next step
Score your business against eight institutional dimensions in under two minutes.