Microloan Company Business Plan and SWOT Analysis

Microloan Company Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Microloan Company Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Microloan Company business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

  • Bank/Investor Ready
  • Complete Industry Research for the Industry
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Marketing Plan (24 to 28 pages)
  • 425+ Page Funding Directory
  • PowerPoint Presentation
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • How to Start a Business Guide
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PowerPoint Format
  • Meets SBA Requirements

For many small businesses, microloans are important because they provide a quick and capital injection for economically viable projects. For the purposes of this business plan, a micro loan is considered to be any type of financial instrument or promissory note granted to a small business in an amount less than $100,000. Although there are some micro loan companies that specialize in loans that are much smaller than this – most microloans by Small Business Administration (or SBA) standards are under $100,000. These financial instruments include not only traditional business loans, but also working capital lines of credit that are either unsecured or secured by assets as well. The gross margin is generated by most micro loan companies are pretty significant given the fact that they are able to charge interest rates that are around 3% to 5% higher than the prime rate. This is primarily due to the fact that small businesses to carry a higher degree of risks when it comes to taking capital. The start of cost associated with the new microloan company can vary greatly given the fact that many of these businesses can be started with a smaller amount of capital and run on a very small basis, or they can be established with millions of dollars to provide loans to several hundred clients. Typically, the average micro loan company is started with a capital base of $10 million to $20 million. The gross margins from interest rates typically around 90% depending on whether or not the bad debt expense is factored into the overall cost of goods sold. A qualified banking attorney as well as a certified public accountant that is well-versed in lending can help an entrepreneur establish the types of financial models that will be use to determine lending ratios, lending risk, and whether or not bad debt expense should be applicable to the cost of good sold account.

Almost all microloan companies are started with funding from private investors. Although some institutions may provide a warehouse line of credit for an established microloan company, is far more common for these businesses to use investor capital in order to launch their operations. Of course, a make microloan company business plan is going to be required. This business plan should feature a three-year  to five year profit and loss statement, capital analysis, balance sheet, breakeven analysis, and business ratios page. There are approximately 1,000 microloan companies within the United States and each year these businesses generate about $29 billion revenue.

The business plan should feature a significant amount of information regarding the operational activities of the business given the fact that there are going to be a number of protocols and procedures pertaining to small business lending. Although the entire lending and underwriting handbook does not need to be included within the business plan, this should be developed and thoroughly discussed within this document. A demographic analysis regarding the types of small businesses that will be targeted with microloans should also be included within the documentation. A qualified attorney can assist the microloan company with determining which jurisdictions the company can operate within the pending on the types of licenses required in each state. Each state has their own specific rules regarding commercial lending activities, and only a qualified attorney can assist a entrepreneur that is starting this business with determining which rules and regulations apply to micro-lending activities.

A competitive analysis is frequently included within this type of business plan, but it should be noted that given the fact that there are tens of thousands of financial institutions that provide loans – this form of the analysis can be focused far more on the competitive advantages at the business will have moving forward. One of the other things that should be thoroughly discussed within this document is the fact that many microloan companies are able to securitize their loans and sell them to third-party investors for significant profit. This ensures a free flow of capital for the microloan company that will allow them to always have access to capital even once all the initial funds have been lent out.

A microloan company SWOT analysis should be developed as well. As it relates to strengths, there is a substantial and ongoing demand for moderate interest rate loans for small businesses. As such, microloan companies have very few issues attracting individuals who could be qualified borrowers. The barriers to entry are very high given the substantial amount of capital required in order to prove provide microloans to the general public.

For weaknesses, these businesses do always faced some issues as it relates to bad debt expense. In times of economic recession, small business owners may default on specific financial instruments and this may cause a significant issue for the profit and loss statement of the microloan company. However, by maintaining quality protocols and procedures for lending these risks can be stymied.

For opportunities, these businesses can readily expand by acquiring additional capital that can be lent out to small businesses and entrepreneurs. The marketing apparatus used to market the services to the general public can also be boosted as well.

For threats, outside of a major economic recession the biggest threat faced by microloan companies is changes in lending regulation and usury laws. However, outside of any company that engages in very high interest rate lit lending – there are very few risks associated with this business outside of the economic recession or borrower default.

A microloan company marketing plan is also developed in order to ensure that borrowers can very quickly reach the business in order to source the capital they need for economically viable projects. A presence on the Internet is the foremost way in which most micro loan companies market their lending services to the business public. This portal should feature information about the lending products available, prevailing interest rates, biographies of the founders, and any other piece of pertinent information regarding which types of borrowers are qualified to receive a micro loan. Some entrepreneurs will take to developing and integrating e-commerce functionality so that prequalification can occur directly on the website. It should be noted that developing this type of functionality typically cost anywhere from $5,000 to $10,000 to develop a secure server that will ensure that customers information is kept safe when they apply for a business loan online.

People are always going to want to start and expand small businesses, and microloan companies provide a quick and easy access to relatively small amounts of capital in order to establish operations. These businesses tend to do well in most economic climates given the fact that there are always companies that are able to produce profits and are going to require a startup and expansion capital. A qualified financial entrepreneur can develop a microloan company into a sizable business that produces a highly predictable and highly profitable stream of income on a monthly and yearly basis.