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Starting up a business in the UK as a Nigerian entrepreneur can be as challenging as it is exciting. One of the biggest challenges of starting up a business in the UK is insufficient capital. From the registration process to setting up and launching the business in the UK, every step is crucial and can be very expensive, especially if you are still trying to find your footing in the UK. However, it doesn’t end there for you, because there are several funding options in the UK available to Nigerian entrepreneurs and startups to help their businesses scale and thrive.
Whether you are looking for grants, which are non-repayable to fund your business plan or idea, or you are looking for government loans to invest in your business and increase productivity, there is a large scale of funding opportunities that you can access as a Nigerian entrepreneur. And in this guide, we will be exploring the different grants and loans available to Nigerian startups and entrepreneurs in the UK.
UK Grants For Nigerian Startups
The first thing you should know about grants is that grants are the way the government funds your business ideas or projects to provide public services and grow the economy. As a Nigerian entrepreneur, it is one of the best ways the UK government can support your business because it is a non-refundable fund. This means that you do not have to worry about paying back the money.
But you would have to meet certain requirements to qualify for government grants, especially in the UK, and this is because the process involved in getting a UK grant is quite competitive, and it comes with strict eligibility criteria. However, the UK government mostly offers grants to businesses in areas like innovation, sustainability, and job creation, and these grants can come from national programmes, regional development agencies, or local councils. They are also dependent on the sector your business operates in and where you are based.
Innovate UK Grants
If your business is working on a new product or service, or the improvement of an already existing structure or system, then the Innovate UK grant is likely to be available to you as a Nigerian entrepreneur. This is on the premise that you meet the eligibility status. The grants are available for businesses in the health, cybersecurity, technology, and science sectors. It is only available to businesses based in the UK.
Regional and Sector-Specific Grants
These are grants that are available to businesses in certain areas and regions to support the economic growth and development of that region, and also to foster job creation. If your business is a plus to the economic growth of a region in the UK and creates more job opportunities, then you stand a chance to access this grant.
Prince’s Trust Enterprise Programme
If you are between the ages of 18–30 and you want to start up your business in the UK. This programme gives free training, mentorship, and access to small grants. It is best for you if you are just starting up for the first time, and you need financial support and guidance to bring your business visions and plans to life.
Criteria for Business Grant Eligibility In The UK
To apply for and get a business grant in the UK, you must first be eligible for it. And you must know that business grants in the UK come with strict eligibility criteria. The eligibility criteria also depend on the type of grant you are applying for and the source you are applying to. However, the common eligibility criteria are as follows:
- Your Business Size: Grants are mostly aimed at startups and small and medium-sized companies with fewer than 250 employees.
- Your Business Sector: Grants are aimed at specific industries like tech, the creative sector, the manufacturing sector, etc.
- Your Business Location: Region-specific grants are aimed at boosting the economic development of those regions, and if your business is not based there, then you cannot access those grants.
- The Purpose of Funding: Grants are also focused on activities like job creation, research, exporting, etc., and to access this type of grant, you must be able to prove that your business serves these purposes.
Where To Search For Business Grants In The UK
- GOV.UK Business Finance Support Finder: It is a government tool that helps businesses find available grants and funding schemes.
- Local Enterprise Partnerships (LEPs): They are regional organisations that provide grant funding and business support to companies based in specific areas.
- Industry-specific Organisations: Look out for trade bodies and sector organisations in your industry that provide grant funding for businesses within their industry.
- University and Research Grants: Some universities partner with businesses to offer innovation grants, particularly in science and technology fields.
- Local authority websites
UK Government Loans For Nigerian Entrepreneurs
Unlike grants, loans must be repaid. However, UK government loans are given to Entrepreneurs at a low interest rate and with flexible repayment terms. They also come with extra support, sometimes. As a Nigerian entrepreneur running a business in the UK or seeking to start up a business in the UK, the government loan is a faster option to raise capital or financial support for your business, especially when compared to grants. It is much easier to access and doesn’t come with strict eligibility criteria.
Start Up Loans Scheme (British Business Bank)
The Startup loans are personal loans for business purposes. It is provided through the Start-Up Loans Company, funded by the UK government, and it is designed to help new businesses begin trading. If you have struggled to get finance from traditional lenders, then this startup loan is for you. It doesn’t require any assets to receive the money, either.
You can borrow between £500 and £25,000, and it is payable over one to five years, at a fixed interest rate of 6% per annum. When you apply, you’re paired with a dedicated business adviser who will support you with completing your application form. And if your application is successful, your loan comes with the option of 12 months of free mentoring.
British Business Bank Regional Investment Funds
The Regional Investment Funds are a group of regional funds available across England, Scotland, Wales, and Northern Ireland. It is ideal for you if you want to start up your business in the UK or any of these regions, or if you want to expand your already existing business. It is also ideal for you if you are already operating your business and need funding to expand, especially out of London, if you are based in London. To qualify for it, your business must be a UK-registered SME operating in the eligible regions. And the loan amounts vary depending on your location and business structure. They not only offer loans but also offer equity investments and mezzanine finance to help businesses grow.
| Region | Smaller Loans | Debts Finance | Equity Investment Amount |
| Wales | £25,000 – £100,000 | £100,000 – £2 million | Up to £5 million |
| Northern Ireland | — | £25,000 – £2 million | Up to £5 million |
| Scotland | £25,000 – £100,000 | £100,000 – £2 million | Up to £5 million |
| Midlands | £25,000 – £100,000 | £100,000 – £2 million | Up to £5 million |
Innovate UK Innovation Loans Programme
The Innovate UK Innovation Loans Programme offers loan funding to UK-registered micro, small, and medium-sized enterprises (SMEs) for innovative late-stage research and development (R&D) projects with strong commercial potential that will significantly boost the UK economy. If your business is in the tech sector or science-driven, then the Innovative UK Innovation Loans are the best fit for you. They offer up to £25 million in loans to micro, small, and medium-sized enterprises (SMEs). This programme is ideal for you if your business has the potential to transform or contribute to the growth of the UK economy. It is perfect for Nigerian Entrepreneurs in tech, engineering, health, or sustainability sectors who are past the idea stage and ready to launch or scale.
Private Funding Options
Aside from the UK government grants and loans, there are also private funding options that are available to Nigerian entrepreneurs and startups to help raise capital and financial support in the UK. They are usually funded by individuals and Non-Governmental Organisations who are keen on investing in businesses and startups in exchange for a certain percentage of returns, profits, or equity.
Seedrs (Equity Crowdfunding Platform)
With Seedrs, you can raise capital from a community of investors who buy into your business ideas, and then you offer them shares or equity in your startup. It doesn’t require you to go to the bank, and helps you raise funds even when you are still building brand awareness. However, you would have to come up with a clear and compelling pitch for your business, and you must be legally allowed to operate in the UK. It is the best choice if your business is in the fashion, tech, food, finance sector, etc.
UK Business Angels Association (UKBAA)
With UKBAA, you can get connected with wealthy investors who want to invest their own money in any promising business. They also offer mentorship and business advice on the side. This is what sets them out from most private funding options in the UK—access to thorough mentorships, solid connections, and business advice. You would also have to come up with a clear and compelling pitch and business proposal, and you must have registered your business in the UK before you can apply for the funding.
How To Apply For UK Business Grants As A Nigerian Entrepreneur
As a Nigerian Entrepreneur or Startup, applying for a business grant in the UK is not a difficult task. All you need to do is understand and follow the process thoroughly. This would help you to know what is required and how to present your business correctly. To apply for a business grant in the UK, here is a step-by-step guide:
- Find the right grant for your business: You should first understand that not all grants are available for all business sectors, sizes, and locations. So you should streamline your search to your business size, your business type, your business location, and your sector/industry.
- Check the eligibility criteria thoroughly: Aside from the general criteria for business grants in the UK, some grants come with specific eligibility criteria, which could be the age of your business, the size of your company, your area of specialization, etc. You should ensure that you meet the eligibility criteria before applying.
- Prepare the necessary documents: To apply for a grant in the UK as a Nigerian entrepreneur, you would need to present the following documents:
- Your Business Plan.
- Proof of registration from Companies House
- Description of your project and how you intend to use the grant
- Evidence of Innovation (if applicable)
- Your Business Financial Outlook
- Write your application: Your application serves as a pitch, so you should treat it as such. Ensure that you state the problem that your business intends to solve, how your business is innovative, and what the grants would help you achieve if obtained. You should consult professional business writing services to help write your grant application.
- Submit before the deadline: There is always a deadline for every grant application, and the deadlines are usually strict. So, the earlier you apply, the better for you.
- Prepare for follow-up: You might be called for an interview or asked to submit more documents. So you should be ready for all of that.
How To Apply For UK Government Loans As A Nigerian Entrepreneur
To apply for a government loan in the UK as a Nigerian Entrepreneur, here is a step-by-step guide:
- Ensure you are eligible for a loan: Before applying, you should ensure that you meet the basic requirements:
- You must be 18 years and above
- You have the legal right to start and run a business in the UK
- Your business is registered with Companies House.
- You have a clear business idea or an existing business with growth potential.
- Choose the right loan scheme: There are different kinds of loan schemes available to different business types, stages, and needs. You should explore the British Business Bank’s Finance Finder to explore all your options.
- Prepare necessary documents: To apply for a loan in the UK as a Nigerian entrepreneur, you would need to present the following documents:
- Your Business Plan.
- Proof of registration from Companies House
- Your proof of identification
- Proof of address
- Details of how the loan would be used
- Your financial outlook
- Apply through the right source: Every loan has its own application process. So, ensure to apply directly to their portal or official website.
