12 Ways to Raise Capital for your Business in Ghana.


Whiles entrepreneurship is the engine of growth of most economies, and a good career option for many, the challenge most people face in their entrepreneurship journey is raising their start up capital. You’ll hear many say that they have amazing ideas, that can create jobs for others and really want to start up their own business, but do not have the necessary capital lift of their ideas from the ground.

Well, I have some good news for you; whiles you may not have the opportunity to just walk into a banking hall and withdraw the required money you need for your business. There are equally other means available for which you can be able to raise up your start up capital.

Limitless Motivation has therefore decided to help you realise your entrepreneurship dream by outlining the different possible ways you can raise your start up capital as a Ghanaian entrepreneurs.

Additionally, it is also very important to know approximately how much capital you need to get you started at least. Since knowing how much money you need will aid you in knowing which approach to use to raise this capital. For example, it’s easier to raise a few 1000 cedis from family and friends that there’ll be no need for you to go to the banks or a venture capitalist.

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Below are 12 different ways that a Ghanaian entrepreneur can raise start-up capital for his business.
1. Co-operatives

Co-operatives: One of the ways to raise start-up capital in Ghana is through cooperatives which are also called credit unions or Susu groups. Most Ghanaians nowadays are resorting to cooperatives for their start-up capitals. Because unlike traditional banks that are for-profits, cooperatives are nonprofits organisations hence are able to give out loans at lower interest rates. That’s before considering taking a loan from a traditional bank you may want to first of all try applying for it from a credit Union. Before getting any financial assistance from a cooperative, they usually require you to have had some savings with the group and also be a member of the union. Anyone can join a credit union so long as you are within the jurisdiction of the credit union and meet the internal requirements of the credit union.

Examples of Co-operatives (Credit Unions) in Ghana
  • Teachers credit union in Ghana
  • Ebenezer Presbyterian Church Credit Union
  • Asikuma Odoben Brakwa District
  • Atonsu Pentecost Cooperative Credit Union Limited
  • Bawku Community Credit Union
  • Assemblies of God Co-operative Credit Union (Kumasi)
  • Assemblies of God Co-operative Credit Union (Accra)
  • Dzadikuma Co-operative Credit Union
  • University of Ghana Co-operative Credit Union
2. Partnership

Partnership: Another way to raise money for your business is through partnership. You can partner with like-minded individuals who are willing to support your business idea financially. A partnership is the agreement between two or more people who invest their money and other resources into the business in exchange for parts of the profit and losses should there be any. 

A partnership can be in many forms, the most common ones include; 1) General partnership where all partners participate in the day to day running of the business and therefore are liable to benefit from every profit as well as any surging liability. 2) The second type is limited partnership, in this type of partnership the limited partners are only committed financially to the business and do not participate in the business’s day-to-day operation, hence are not liable to any liability. 3) Lastly is the limited liability partnership, here all partners are protected from any form of liability. Thus, before you enter into any partnership it is important to clearly state how each partner plans to participate in the business venture, either as general partners or as limited partners in other to avoid any future litigation.

An example of partnership
  • There was this young barber who had the skills of barbering, but was not having enough money to start up his own barbering shop. On the other hand was an individual who had the money and also interested in setting up a barbershop, but is not having the accompanying skills. These two individuals then came together to set up a barbering shop. One made his skills available whiles the other his resources. At the end of the month, all the money made over the period was divided into three parts. Each partner receives one-third of the revenue and the remaining one-third is reinvested in the business.     
3. Governmental Small and Medium scale Enterprise Grants and Loans

Governmental SME grants and Loans: An entrepreneur in Ghana can also raise capital for his\ her start up by taking advantage of the government’s small and medium scale business loans. For the purpose of job creation and promoting imports substitution the government of Ghana like in many other jurisdictions has set aside some funds for the objective of supporting indigenous companies. Many SMEs are benefiting from this funds and you can also access this loan for your business

Example of Governmental SME Loans in Ghana
  •  Microfinance and Small Loan Centre (MASLOC)- Minimum GHC1000-GHC10,000
4. Sales of Personal Asset

Sales of Personal Asset: Are you an entrepreneur and wondering how to raise capital for your business? If yes, then you may consider selling of your personal asset an option. Entrepreneurship requires a lot of sacrifices most especially during the initial stages of your business. Having an asset like land, a house, “ a car” etc. can help you raise some capital for your business either by serving as collateral with which you can obtain a loan or by selling it from which you can get some amount of money to get you started in your business. Selling a personal asset to start up your business shows the level of commitment you have towards your idea which may attract others to also be willing to support you financially. However, the selling must be done with some level of discretion and wisdom.

5. Family and Friends

Family and Friends: Raising money from family and friends for your business is less challenging than obtaining loans from banks, angel investors or venture capital. Since your family and friends already know you and your trust they are more willing to support your vision. Nonetheless, this method also has it’s pros and cons, and hence you must go about the process in a professional way. It is mostly advisable to seek funds from family and friends that are capital worthy enough to give up some money for your business and still be able to meet their own financial needs.

In other to avoid any awkwardness in the future it is important to state clearly which type of funding your family and friends are supporting you with. Are they giving you an interest-free loan that you’ll have to pay later, or is it a gift amount that you don’t have to pay, or an equity investment where they become partners in the business. At most every form of their support should be in a written agreement and signed in the presence of some witnesses. Also, it is expedient to let them know beforehand your repayment plan in the case where you are required to pay back. You cannot say they are your family members so you take things for granted. If things go awry you have to face them for the rest of your live, so it’s better to do things right from the beginning.

6. Personal Savings

Personal Savings: Also known as bootstrapping implies funding your business project with your own funds usually from your savings. Self-financing during the initial stages of your business signals external investors that you are serious about your business and also have confidence in the idea. Whiles it’s quite challenging to obtain external financial support for your business in it’s start-up stages, bootstrapping can help boost investors confidence in your business. That’s why when applying for a loan or a grant they ask you how much of your own capital have you invested in the business which makes them more willing to invest in your business. It’s therefore advisable to start saving as early as possible if you have entrepreneurial ambitions. You can also offer freelance and consulting services, together with your day job to raise extra money for your business.

See also: 30 Profitable Business Ideas In Ghana.

7. Crowdfunding:

Crowdfunding is when individuals or cooperations raise capital for their business or for a worthy cause through the collective effort of their friends, family, customers individual investors, and well wishes on an online platform. In recent times most entrepreneurs and activists are resorting to crowdfunding platforms to raise funds for their projects. For the fact that it gives them the opportunity to pitch and showcase their ideas to an infinite pool of potential investors at the same time. It is also worthy to note that there are different types of crowdfunding, namely equity-based crowdfunding, donation-based crowdfunding, and rewards-based crowdfunding. Equity-based crowdfunding allows contributors to become part owners of the company, while in donation-based crowdfunding the contributors do not receive any return on their investment neither are they entitled to one. Lastly is reward-based crowdfunding where the contributors support your project financially in exchange for a reward mostly in the form of the product or the service of the company.

An example of Crowdfunding Platforms in Ghana
  • GoGetFunding
  • Funding Africa
  • GoFundMe
  • Myaidfund.com
  • Payputt
  • Myneesh
  • Mightycause
  • Crowdfrica
  • Farmable
8. Angel investors

Angel investors: Angel investors are high net-worth individuals who provide funding for start-up companies usually in exchange for equity (ownership) in the company. Angel investors come in two forms, those you know and the ones you don’t know. They may include professionals like lawyers, engineers, doctors, and also your customers, suppliers, employees even other entrepreneurs. One reason some start-up entrepreneurs prefer angel investors to other traditional banks and venture capitalists is that unlike the former group which is solely motivated by profit, angel investors are not solely motivated by profit. Especially when the angel investor is also an entrepreneur or a former entrepreneur they have other motivations other than profit. Since they may see their investment in a start-up company as a way of giving back and also draw fulfilment from the fact that they are able to help other young entrepreneurs grow their business, they are less stringent in their requirements .

Examples of Angel Investors in Ghana
9. Winning seed capital through start up competition

Winning seed capital through start up competition:  One way to also raise up capital for your business in Ghana is by participating in entrepreneurship competition or contest. With the aim of encouraging entrepreneurship among Ghanaian youths, one as a means of alleviating poverty and two for the purpose of job creation, some non-governmental organisations (NGOs) and foundation like the Macdan foundation, Kumasi Haive, and HapaSpace among others, have created start up contests where start-up companies get to compete for a certain amount of capital to help them start their businesses.

Each start up competition has a number of criteria that participants are expected to meet for example, feasibility and profitability of the idea, the number of jobs that will be created through the business idea, etc. While this approach to raising start up capital can be very difficult because of its competitive nature, it also has it’s upsides and worth giving a try.  For the reason that even without wining the contest, your idea still receives a significant amount of publicity, which may bring in other potential investors and customers.

Examples of Start up competition that Ghanaian Start Ups are eligible for
  • MacDan Entrepreneurship Challenge
  • SUN Pitch Competition
  •  Youth Citizen Entrepreneurship Competition
  • The African German Entrepreneurship Academy (AGEA) Idea Competition
10. Bank Loans

Bank Loans: Resorting to the banks for financial support is another opportunity the Ghanaian entrepreneur has. However, it is usually advised that the bank should be the last resort after exhausting other sources of raising capital for your business for a number of reasons one which is because of their high interest rates. For a bank to give you a loan you must have a compelling business plan or proposal and there are also a number of requirements they expect you to meet, for instance, your credit worthiness, the profitability of the business, a collateral and the feasibility of the business among others.

11. Venture Capital

Venture Capital: Another opportunity to raise capital for your business in Ghana is through venture capital. Venture capital is a type of financing that well-off investors, investment banks and any other financial institutions provide to start up companies that are believed to have longterm growth. In return investors get equity (ownership) in the company and hence are usually involved in company decision making. Because venture capitalists receive more than 1000 proposals in a year and are highly profit driven they are very selective with their investments. They usually choose start-ups that promise to give astronomical growths.

Examples of Venture Capital firms in Ghana
12. Business Incubators

Business Incubators: Incubators are organisations that help mostly start up business by providing them with free office space or at a low cost, mentorship, access to investors and sometimes start up capital in the form of loans. Hence you may want to consider registering your business with an incubator as also another way to source financial support for your business. In the incubator you get to work with other entrepreneurs within the same industry and similar focus.

Examples of Business Incubators in Ghana
  • Kumasi Business Incubator
  • Stanbic Bank Incubator
  • Mest Incubator Accra
  • Agro-business Incubator in Ghana

See also: 7 Things to Consider when Choosing a Location for your Business in Ghana.

Hope you find this article helpful, kindly comment, and share with others .

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