Ghana: Start-Ups Urged to Consider Equity Financing

The Chief Executive Officer (CEO), of the National Entrepreneurship and Innovation Plan (NEIP), Mr John Kumah, has advised start-up businesses to resort to equity financing rather than taking business loans.

He explained that start-up capitals in the form of business loans were the biggest drawback to start-up businesses.

Mr Kumah was speaking at the launch of the Quick Angels Limited's support fund for businesses and entrepreneurs in Accra.

The CEO noted that entrepreneurs were often required to begin payment of debts plus interest at a time when the business had not yet become profitable.

He said to determine the value of a company, equity was important to businesses because it could be used to finance expansion.

"Equity can help to fund the expansion of a business by selling shares of stock to investors,when a company sells stock, it sells equity to investors for cash this can use to fund growth," adding that the initiative would be a boost to the country's economy," he said.

Mr Richard Nii Armah Quaye, the Chief Executive Officer of Quick Angels Limited, a subsidiary of Quick Investment Micro-Credit Limited, on his part, said the objective of the initiative was to provide seed capital for start-ups to rapidly expand existing businesses by making available the requisite capital and premium management expertise.

Recounting his experience, he said most entrepreneurs have failed to start their career or grow their businesses from the level they started due to the scarcity of investors which lead to inadequate capital and lack of support for young businesses.

The initiative he noted was to compliment government's efforts to provide support for businesses, saying, "Such responsibility cannot be left on the shoulders of governments alone as this has never been the case for developed economies."

Mr Quaye called on young entrepreneurs to associate themselves with the company in order to ensure strategic partnerships and a win-win relationship for both parties as well as boost the economy through investing in entrepreneurs to propel national development.

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