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Shortest Route to Fund Your Small Business in Kenya
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Shortest Route to Fund Your Small Business in Kenya

You need money to make money. And oftentimes, you will need other people's money to make your own. But we all know that in business, time is of the essence. The time used to secure funding plays a vital role in your business progress. 

For example, if you are in a seasonal business, you need to have the funds ready to go as the high season starts, or you might miss out on a critical revenue opportunity altogether. 

In addition, without the correct funding, many small businesses do not live to see their first birthday. Depending on the kind of business, you need frequent capital injections. It might be to finance general everyday business operations like the demand in inventory, payroll expenses or to finance new projects to inspire business growth.

This article takes you from the shortest to the more longer routes to securing funding for your small business in Kenya. 

Mobile Money

Digital/mobile loans are likely the easiest and fastest source of credit. They are an unsecured credit facility that you can apply directly from your mobile phone. 

They are accessed through a mobile app or a USSD, and in most cases, funds are instantly disbursed directly onto your mobile wallet - except in a few instances where you need to wait for your application to be approved. They also have a relatively short repayment period. 

It is also important to note that most digital loans start with a small amount, and your loan limit grows as you continue to borrow and repay. So if you are intending to use a digital loan as a source of a quick cash injection into your business, you might need to build a relationship with a digital lender now to raise your limit. 

Note that several banks and Saccos too offer quick mobile loans that you can get relatively quickly. You’d need to be a member of such an institution to qualify for a mobile loan. 

The short repayment period also means you need to be sure you will have enough to repay the owed amount. 

Family and Friends

Although it might not be the most comfortable discussion, who can support your dream better than the people who know you? 

Pitch your business to the people close to you and let them know that their investment will help you realize your dreams. This is one of the easiest and fastest ways to raise capital, especially if you are just starting out. 

However, make it clear if their investment is a donation, a debt, or in exchange for shares in the business. It is advisable to have this clear in writing. 


An overdraft is a debt facility offered by financial institutions allowing you to withdraw more than you have in your account. Suppose you need Ksh50,000 to pay for new stock, but you only have Ksh20,000 in your bank account. In such a case, you can comfortably withdraw Ksh50,000 if you have an overdraft facility set up. 

Once you are approved for an overdraft, you can keep accessing this credit facility over and over without the need to apply and get approved again. Depending on your issuer, the initial approval process can take between one and 30 working days. 

Personal/Business Credit cards

Personal and business credit cards are the same, except you can use a personal credit card for your daily personal spending. In contrast, you can only use a business credit card for business expenses. 

The credit card application process and approval period vary from one issuer to another. However, once approved, you will use your card anytime without the need for another approval. 

One major advantage of credit cards is the interest-free period, which in Kenya ranges from 30 days to 55 days - meaning if you repay back within the set period, you do not incur any interest. 

Learn More: Who Qualifies for Credit Cards in Kenya (And What to Do If You Don’t)


This is a situation where you fund your business with little capital, the money that you have yourself without relying on anyone’s capital input and build up from your own resources. 

You start and build your business from personal finances or the profits from the business without relying on money from from lenders or investors.

When you bootstrap, you pay as you go or when funds are available. There is no defined timeline on when the money will be available. 

Check-off Loans and Non-check-off Loans

Check-off loans are only available to people in formal employment. This is because, as the name suggests, the repayments for the loan are deducted by the employer before they write your cheque, and remit to the lender’s account. 

To qualify for a check-off loan, your employer must have an MoU with the lender you intend to borrow from. Owing to this, check-off loans are processed very quickly and you don’t need to have an account with the lender to qualify for the loan, and the payment terms are quite flexible.

On the other hand, non-check-off loans are not connected to your employer, and the employer has no responsibility to deduct the repayments and submit them to the lender. They are like normal secured, and non-secured loans, and the application process and timelines vary from lender to lender. 

Learn More: Types of Personal Loans In Kenya

Pay-day loans

Payday loans (also known as cash/salary advance) are short-term loans that are due by your next payday. These are a great option for when in need of urgent cash top-up - maybe to cover inventory shortage. 

These loans have minimum qualification requirements in most cases, making them easily accessible to most people. However, you will need to give the lender advance authority to deduct the owed amount - plus any other fees and interest - from your account once your salary/income is deposited.

Guarantor loans

A guarantor loan is great if you do not have a healthy credit history or collateral to give as security for the loan. In such cases, lenders view you as high risk, and bringing in a third party as a guarantor can help reduce this risk and get you approved for the loan. 

The application process from finding a guarantor (could be a close friend, a relative, or even a colleague) to getting the loan approved varies and can take a few days or a few months, depending on the lender. 

Secured personal loans  

With a secured personal loan, the lender requires you to provide an asset to act as security for the loan. In case you default on the loan, the lender can seize the asset and auction it to recover the loan balance. These loans include:

  • Logbook loans
  • Asset loans

The timeframe needed for the loan depends on the lender and how quickly you provide the requested information - it can be anywhere between a few days and a few months. 

Learn More: Full Guide: All You Need to Know About Personal Loans in Kenya

Unsecured Business loans

An unsecured business loan does not require an asset as security. The loan is only supported by the borrower's creditworthiness rather than collateral. As such it can be difficult to be approved for an unsecured loan if you do not have a good credit history. These loans include:

  • Business lines of credit
  • Unsecured term loan

Before you get approved for an unsecured business loan, the lender will require at least five things from you. In addition to your creditworthiness, the lender will need you to prove a healthy cash flow, future business viability and so on.  

In many cases, this process takes much longer and requires much more than the other options. 

Additionally, you can get the following business loans types if you can provide evidence of verified debtors to the lender. 

  • LPO financing
  • Invoice discounting
  • Invoice financing

Secured Business loans

If you want a business loan against assets owned by your business, a secured business loan is what you are looking for. It is great especially if you are not eligible for an unsecured business loan. The collateral gives the lender assurance that if you default, they can sell the asset to recover their money. 

This type of loan is best for businesses that own significant business assets like machinery, motor vehicles, commercial property, etc. The amount is based on the value of the asset. These loans include:

  • Business asset loan
  • Secured term loan

The application process varies from lender to lender depending on their requirements and the collateral offered. 

Learn more: 5 Things the Bank Will Ask When You Need a Business Loan

Peer-to-Peer (P2P) Funding

Also known as “social” or “crowd” lending, peer-to-peer lending is a modern alternative source of business funding that connects entrepreneurs/businesses that want to borrow money with people or entities willing to lend. It is basically a platform, usually online, that matches loan applicants with investors. Examples include Kiva and Bitbond

In most cases, your qualification for a loan is based on the same terms as other traditional lenders, e.g., your income, credit history, etc. Just like a traditional loan application, the time it takes from application to approval varies from one platform to another. 


Crowdfunding is another alternative source of funding a business project/venture through raising small amounts of money from a large number of people - usually on an online platform. 

On average the campaign will take anywhere between 45 days to 6 months, depending on the platform and how compelling your narrative is to encourage people to contribute. 

Angel investors

The simple definition of an angel investor is an individual or entity who sees potential in your business venture and wants to be involved. The involvement might come as a loan, equity, or a combination of both.

There is no set time limit on how long it will take to get an angel investor to invest in your business. Finding an investor and convincing them to commit their money to your business might take anywhere from a few days to a few years. 

Venture capitalists

Venture capitalists are individuals or entities that provide funding in return for part-ownership/shares in your business. Unlike angel investors, venture capitalists typically want to invest large amounts of money and, therefore, look for big businesses. 

They also have more comprehensive requirements, which might take you longer to satisfy them. 


The process of funding a business venture can be tough, lengthy, and full of hoops that need to be jumped. Depending on the business need that you want to finance, the Kenyan scene offers a variety of options to choose from. 

Carefully weighing the pros and cons of each option and making sure you are borrowing for the right reasons will get you closest to finding the best fit for your business.

Good luck!

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Doris is a finance professional, freelance writer and SEO expert. She has experience helping businesses of all sizes create content that helps improve their site quality and increase their online traffic. She is a personal finance and wealth creation enthusiast and a frequent contributor to Money254. Visit Doris' personal website to learn more about her work.

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