Capital is the most important factor for the sustainable growth of small and medium scale enterprises (SMEs), the Head, SME Banking, Stanbic IBTC Bank, Mr. Obinna Ukachukwu, has said.
In an interview, he said without capital, it would be difficult for any business to attract finance or investment.
According to him, if the promoter of a business does not know the value of the business, it is very unlikely that any investor or financier will be comfortable committing money because the equity or debt investor is bringing in money in exchange for value.
“If you don’t know the value of your business then you do not expect a debt investor to put in his money,” Ukachukwu said.
He explained that the value of a business can be determined if the proper structures, such as proper book keeping, annual reports, tax returns, auditor’s report, and record of banking transactions, which form the history of the business, have been put in place.
He, therefore, encouraged business owners and entrepreneurs to engage the services of professionals to ensure the right structures are in place.
“When you have generated capital, you have determined your business’ worth, you then need someone to attest to that in form of documentations, whether it is your banker, your auditor or your tax man. Having these in place will make it easier for you to attract debt or equity financing,” Ukachukwu said.
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