Ayoola Adeola, Managing Director, CardinalStone Finance
One of the most common challenges observed among Chief Financial Officers (CFOs) and business owners across Nigeria is not business performance, but misaligned financing. Many companies secure funding only to find that repayment begins before the underlying investment has had time to generate returns. A manufacturer that requires 9 months to ramp up a production line is financed with a 6-month facility. A logistics company expanding its fleet to service a major contract is expected to repay before contract revenues fully materialise. In these situations, capital is available, but the structure works against the business rather than supporting it.
This misalignment is more than an inconvenience. It compresses cash flow, forces premature refinancing, and often compels businesses to slow down growth in order to meet near-term obligations. In many cases, the underlying business remains fundamentally sound, the constraint lies in how the financing was structured.
This is the gap private debt is designed to address. Unlike conventional bank lending, which is often characterised by lengthy bureaucratic credit processes and standardised lending frameworks, private debt solutions are tailored to the specific realities and needs of the borrower. The tenor is typically structured to align with the borrower’s investment cycle and cash flow profile. Repayment aligns with cash flow rather than fixed timelines. Structures are built around how the business generates revenue, not just how credit is traditionally extended. For growth-stage Nigerian businesses operating in capital-intensive sectors, this distinction is critical, it determines whether financing accelerates growth or constrains it.
