Business
Financial Challenges Small Business Start-ups May Face in The Future
Most small business houses face the challenge of finance in the future. If you take a look at financial institutions and banks, they have been designed and built to provide services to large business houses. Their system and process for loan application have been designed for evaluating risks of big business with diverse resources.
The issues of data collection for business loans
Small businesses face problems due to data collection. The information collected is not consistent as three major credit bureaus are delivering and deciphering the creditworthiness of the candidate. There is an underwriting process that needs a lot of data and information when it comes to ascertaining the creditworthiness of the applicant. The process of underwriting needs data about the revenue of a small business. The process also needs to know about the history of borrowing of the candidate and the lines of credit. The time spent when it comes to collecting that data and information is endless and takes long.
Personal credit
Several money lenders will use the personal credit of a small business owner as a symbol of risk for the business as well. These money lenders resort to scoring models for individual candidates and large businesses. This process again deploys a lot of system override and judgment. In short, the small business owner for a loan has to jump into many hoops and before you know it, he is generally caught in one of them.
The above is just the process that a small business owner faces with one money lender. If you multiply that by five lenders, he will be juggling with shopping rates making the loan application process a long one. The money lenders also need to get hold of different information for every applicant. This makes the process of applying for a loan hard for every small business owner as they fail to understand how they can improve their chances of finding a loan. The result is these business owners face themselves stuck in hoops of credit madness. This results in them using the same techniques for generating different outcomes hardly realizing why they are resorting to them.
What are the options for small business finance in the future?
Traditional money lenders are a great option for a small business. However, this would mean they need to develop a system to evaluate a small business by setting standards that are specific to their resources and size. Here, the applicant and the lending institution must make changes to their scoring models by automating the collection of data and streamlining the process for funding. This again will lead to a great level of success say esteemed money lending institutions in the nation like Liberty Lending US. Today, alternate finance provides a window for business loans that traditional lenders hope in the future to become.
Here they would need to create systems to evaluate a small business with standards that are specific to their resources and size. The following are some forms of alternative finance options for small businesses-
- Online lending- The process of online lending is the same as banks. However, the product here is more streamlined. These online loans generally have a qualifying criterion that is less stringent over banks. This applies to credit rating, tenure, and revenue. The process is established on online platforms that permit funding and application in the same field. This means there are lesser reviews and improved accessibility. Online lenders will reduce the wait time for qualification for the business loan. They assess a lot of data over credit history and applicants do not need to apply for extensive collateral. Some online lenders have an application process that is streamlined. They focus on data connections that are live in order to assess the business performance of a company in real-time rather than credit score. This gives small businesses the chance to use their lines of credit for the approval of the loan. Benefits are also highlighted for applicants. They can maintain the control as well as equity of their business. They get the chance to keep their personal finances separate. They can also avoid separating those that are close to them as they get access to funds via a third party.
- Crowdfunding- This is another alternate platform for getting a small business loan. Here, there is online pitching where the owners of small businesses have to convince others that their businesses are worth an investment. The process of crowdfunding entails people asking others to invest in a certain product, business or a campaign. The funds do not have to be paid directly. Here, owners of small businesses may offer a free version of the product or a specific percentage of the future revenue expected.
- Invoice Factoring- Invoice factoring is another alternate funding process for small businesses. Here, the process involves outstanding invoices over the credit history of the business. In this process, the company that specializes in invoice factoring buys the unpaid invoices of the business at a discounted price. This places the focus on the ability of the customer to pay over the small business. The process of invoice factoring is generally streamlined, and it allows the company to attach all the invoices they want to be funded. The owners of small businesses often see the rebates on the same day. Another advantage of invoice factoring is paperwork is reduced. This means the process is faster and you get the funds you need for the development of your small business!
Therefore, when it comes to applying for alternate finance for small business loans, applicants can resort to the above forms of alternate finance. They are simple and more streamlined over conventional bank loans. Moreover, they are quicker to apply for, and the criteria for application is not stringent like that of conventional loans. Apply for them and get the much- needed financial support you need for your small business. Loan application does not have to be a hassle some anymore!
The Nigerian Communications Satellite Limited (NIGCOMSAT), the country’s satellite operator, has called for immediate promolgation of policy action that will enable the country to harness the potentials of Artificial Intelligence (AI).
NIGCOMSAT, also warned that Nigeria risks missing out on Africa’s projected $1.2trillion share of the global AI economy by 2030.
Managing Director of NIGCOMSAT, Nkechi Egerton-Idehen, disclosed this in a statement issued at the weekend following her participation in the Meeting of the National Council for Communications, Innovation, and Digital Economy.
“Artificial intelligence is reshaping industries, economies, and societies worldwide, with projections that it will contribute up to $15.7trillion to the global economy by 2030. Africa stands to gain $1.2trillion of this if the right policies and innovations are in place”, Idehen said, citing a PricewaterhouseCoopers report.
The NIGCOMSAT MD underscored the transformative potential of AI in agriculture, highlighting its applicability in Benue State, widely regarded as Nigeria’s “food basket.”
According to her, machine learning tools could revolutionize agricultural practices by improving pest detection and optimizing planting schedules using satellite imagery.
“AI offers us the chance to not only flourish economically but also to achieve food security. However, we must ask ourselves if we are prepared to manage this technology responsibly”, she added.
Idehen also noted that internet access remains a significant barrier to AI adoption in Nigeria.
“For AI tools to be effective, basic digital infrastructure is essential. Addressing this gap must be a priority.
“AI is happening. We have the opportunity to manage this technology revolution responsibly, both in Africa and globally, through innovation and governance”, she said.
In August 2024, the Federal Ministry of Communications, Innovation, and Digital Economy released a draft National Artificial Intelligence Strategy, aiming to position Nigeria as a global leader in AI.
Corlins Walter
The Chairman of Emohua Local Government Council, Chief David Omereji, has said the council has so far spent over N1 billion for the electrification of communities in the area.
Omereji said this while addressing staff of the council at the council headquarters recently.
He said the move was part of his administration’s resolve to ensure peace and development of the LGA.
According to him, the Council spent about N29 million on monthly basis for the maintenance of the Emohua Local Vigilante group known as OSPAC, with each member being paid a stipend of N100, 000 monthly.
He diaclosed that 11 out of the 14 wards are currently enjoying electricity, while efforts are on to light-up the remaining ones.
“I also want to use this opportunity to inform the political class for purposes of records and for the understanding of the people that the Council under my watch have done more than enough”, he said .
The Emolga boss explained that all that have been achieved were through the personal effort of the Council, without support from anybody as rumoured in some quarters.
Omereji further reaveled that a number of other projects, including roads, fencing of schools, hospitals, courts premises, and reconstruction of some abandoned buildings at the Council Headquarters are being undertaken by his administration.
He enjoined the people of the area to support his administration’s drive to bring purposeful development to the LGA.
The Emohua Council boss, who reiterated his hatred for noise making, stated that his works would speak for him, and solicited the support of staff of the council and the entire people of the area.
He noted the fact that some people may not be happy with his achievements, saying that he would remain focused, while advising critics of his government to do so constructively with facts and figures.
King Onunwor
The Movement for the Survival of the Ogoni People (MOSOP) has raised some ethical questions over a Financial and Technical Services Agreement (FTSA) between Sahara Energy and West African Gas Limited (WAGL), an affiliate of the Nigerian National Petroleum Company (NNPC).
MOSOP said the agreement was not done in good faith, not in the interest of the Nigerian people, and did not follow due process.
Foremost Ogoni born activist and MOSOP leader, Fegalo Nsuke, who made this known in Abuja, weekend, described the Sahara-WAGL deal as fraudulent, deceptive and an insult on the intelligence and integrity of the Nigerian nation.
Nsuke called on President Bola Ahmed Tinubu to cancel that FTSA between Sahara Energy and WAGL, noting that the agreement is fraught with irregularities and deceptive.
“What Sahara and the NNPC did in the FTSA between Sahara and WAGL is shameful and depicts high level corruption in public service of our country.
“WAGL is an affiliate of Sahara and the NNPC. How then can Sahara go into an agreement with its own affiliate? It’s as good as going into an agreement with itself. This is deceptive and fraudulent”, Nsuke said.
He continued that “Sahara Energy is certainly not a company the Ogoni people want on their soil and we are calling on Mr. President, Bola Ahmed Tinubu, to terminate any deal between the NNPC and Sahara Energy over OML 11, and to allow for an inclusive arrangement that considers a fair treatment of the Ogoni people in the distribution of revenues from natural resource extraction on Ogoni soil.
“The last Ogoni Congress has been unequivocal on the Ogoni demand for justice and has given a clear path to resolve the three decade old conflict between all critical parties.
“It will be good to explore this path to peace and development for Ogoni and for our country”.
Nsuke accused Sahara Energy and the NNPC of frustrating the progress made by MOSOP to achieve a permanent solution to the Ogoni problem.
He urged a presidential intervention with deep consideration for a fair treatment of the Ogoni people in order to permanently address the problem.
He noted that Sahara Energy should give up on the Ogoni area to allow for an engagement in the interest of the country and the people.
Recall that MOSOP and Sagara Energy have recently been engaged in a row in what MOSOP describes as an unholy relationship between Sahara Energy and the NNPC over OML 11.
MOSOP expressly rejected Sahara Energy and called for a fair treatment of the Ogoni people in natural resource extraction in Ogoni.
It noted that Ogoni people, led by MOSOP, paid the sacrifice to take the oil from Shell, hence “the position of MOSOP must be taken into consideration in decisions relating to resumption of oil production in Ogoni”.