Securing funding is the most difficult, as well as the most crucial element for a startup company. While it is getting harder and harder to apply for a loan from banks, micro business loans are getting more and more popular for start-ups in North America and Asia. The steps to apply for a micro loan is simplified compared to a loan from a bank or Venture Investors, however, there are a few elements that will help you speed up the process: a complete business plan, detail-oriented characteristics and financial prowess.
1. Business Plan: Though microloan companies don’t necessarily require a submission of a complete business plan, having a thoroughly developed one based on solid research and analysis (like a full-length mirror to show the business potential) will be a great help. It shows not only that the entrepreneur comes with sincerity and preparation, but also a rich and impressive knowledge of their market.
In order to showcase the potential of your business plan to its fullest with little funds, if any, a start-up team needs to utilize the resources of the dotcom era, A.K.A. “the start-up friendly era”. For example, marketing tools like Google AdWords and Facebook ads can help any entrepreneur access their target market easily and effectively. What’s more, the data collected through these platforms can also serve as proof of the potential market within the business plan itself.
A well-rounded project composed of a complete and detail-oriented plan and actual market data would seem more interesting to investors than a plain business proposal.
2. Detail-Oriented: It goes without saying detail-oriented characteristics are required throughout all the different phases of entrepreneurship: from making the business plan, to targeting the right group of customers, to financing your incomes and balances and so on. As for a start-up in the phase of attracting secure funding, detail-oriented characteristics are extremely important. It gives the loan organizations a touch of your ability, sincerity, and professionalism. These would illustrate the financial prowess of yourself as a representation of your business.
3. Financial Prowess: Last but not least, one’s financial prowess would also be a keen point. Estimate how much money you will need to set up your operations and detail the brand and cost for your equipment to create a monthly cost projection. A monthly projection will give microloan organizations a solid idea of your financial plans. Your financial prowess shown in the planning phase would determine whether you would get the loan or not from a microloan organization— whether your start-up would be profitable from the angle of financing and management, and more importantly, whether you are able to pay back the loan.
Shuang Li, an M.A. candidate at Media, Culture and Communications in New York University. With expertise lying in technology and politics, she’s highly concerned and conducting researches about the start-up environment and the government policies.