How to Start a Loan Company Even if you Have no Money

A loan & cash advance business is a very lucrative one, especially in Nigeria where access to capital is limited. You could literally double your capital more quickly than you could if you started a business that sells products and services.

But you need money to make money, so how do you start your own loan company even if you have little or no money?

In this article, we’ll look at the different ways you can fund your loan or cash advance company in Nigeria without using your own money.

Yes, it is possible to use other people’s money to fund your loan company and still make money in the process.

Here’s how.

DMB Loan

A few Deposit Money Banks in Nigeria offer loans with competitive interest rates that would give you room to lend out the same for higher profit.

A bank like SunTrust offers business and personal loans at 10% interest rate per annum. 

The good thing about SunTrust loan is that it comes with no extra charges. No origination fee, no annual fee, no pre-liquidation payment. All you get is a loan and a repayment plan.

 If you could lend out the same loan at 10% per week to small businesses around, you would be able to make a 480% profit on the loan if everything goes as planned. 

20% would go to the principal loan payment, while 60% could be allocated to default losses. Still you would still have a healthy 400% profit of the loan capital.

Government Subsidized Loan

Another way to fund your loan company is to use a government subsidized loan.

The interest rates for these loans usually hover around 5% and come with a 6-month or 12-month moratorium, so you have enough headway to start growing the loan capital before your repayment commences.

However, these Government subsidized loans are sometimes strictly available for specified business intervention programs, and only particular business types are funded.  

FNF Fund

Family and Friends. The good old way to fund your business ventures.

You could fund your loan & cash advance company using funds with family and friends. This type of fund is mostly interest-free and comes with a lot of room in terms of the repayment plan.

You could even incentivize your FNF fund by offering to offer a soft interest on the loan capital. The higher the loan, the higher the ROI that your investor friends and family could receive.

Crowdfund Loan Capital

Crowdfunding is starting to become part of the business culture here in Nigeria, and you shouldn’t leave out that possibility when starting your loan company.

You could start a crowdfunding platform that gives a specific competitive interest per month, and in turn use the capital raised to make a higher return.

For example, let’s say that your crowdfunding platform promises 15% ROI per month, you could make a profit by offering the capital raised as a loan or cash advance to small businesses and civil servants at 10% interest rate per week.

That gives you a 25% interest surplus per month if everything goes as plan, which is a healthy return for using other people’s money.

Cooperative Fund

Cooperatives are usually the preferred choice for people looking to raise money without too much restrictions, and for good reason.

But you could use a cooperative fund to start and build a loan company of your own if you have some money management skills.

With cooperative funds classified as zero-interest fund, you could make as many derivates as you can on free money.

The possibilities are just endless.

Just imagine if you have a 20-cycle cooperative fund that helps you to raise 200,000 Naira repayable in 20 months 10,000 Naira payments.

If that 200,000 yields a 20% ROI per month via cash advance and loan investments, you would be making 30,000 Naira in passive income after paying your monthly cycle payments, with even more room to grow your fund.

That’s the power of compound interest.


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