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What is a Microloan?

what is microloan

Microloans are short-term, lower-dollar-amount loans. It is available to self-employed people, new businesses, microenterprises, small firms, and private individuals with little or no capital. A sort of tiny loan known as a microloan is given to microbusiness owners or low-income households who have little to no access to banks or other lending organisations.

Through collaborations with private limited enterprises and microfinance organisations, RBI has begun to engage with the unbanked and underbanked population in order to provide them with funds with the support of the Government of India (MFIs). After MFIs and private limited businesses, NGOs are regarded as the most prevalent microlenders. In this article, Finline will give you a brief on the benefits, purpose and related topics of Microloans.

The benefits of microloans

Microloans can be utilised for a variety of business-related purposes, including debt reduction, starting a new business, managing daily expenditures, paying staff wages, fulfilling working capital needs, and preserving cash flow. People who have problems getting business loans frequently think about microloans or microfinance.

The purpose of microfinance
  • encourage the socio-economic growth of families with limited or no banking services
  • strengthen the Self-Help Groups (SHGs) and utilise them for the nation’s economic growth
  • promote and encourage women’s businesses and startups nationwide

Initiated and supported by the Indian government, the National Bank for Agricultural and Rural Development (NABARD) also provides microloans or microfinance.

What drawbacks are there to microloans?

There are some drawbacks to microcredit, such as excessive debt levels, a high likelihood of borrower suicide, and excessive pressure to repay loans. Also, the excessive interest rates on certain microcredit loans, which may be as high as 30%, are one of the drawbacks.

How can you get eligible for a microloan?
  • Small businesses that are for-profit are eligible for SBA microloans.
  • If your small business is for profit, you should be eligible for an SBA Microloan.
  • Most microlenders don’t demand exceptionally good credit.
  • Capacity to repay the loan, as well as a private guarantee and collateral.
How to apply?

Since the interest rates given by banks and NBFCs are often lower than those offered by MFIs, those in need of funds must first request business loans from private and public financial institutions or NBFCs. The applicant may, however, choose MFIs if they have already tried using them. Individuals with extremely low credit ratings or no financial background typically make applications for microloans.

You now have the funds you need to expand. What’s next? How you use it may significantly impact your future success. Employment, inventories, machinery, furniture, decorations, and technology are all items that may be financed with a microloan, just as you can with any other kind of company loan.

During lean times, one can pay bills and provide extra aid when it’s needed. They may make it possible for you to seize a lucrative marketing opportunity or a supplier’s generous discount on merchandise you want to resale. 

Using a microloan to clear private debt or make personal purchases is prohibited. It’s crucial to distinguish between company and personal spending. Furthermore, one cannot purchase actual money with it.

Without question, microloans are accelerating the growth of numerous enterprises both domestically and internationally. Yes, they are not only for the impoverished rural craftsman. They are genuinely intended for every company owner who is aware that, when utilised wisely, a modest sum of money may have a significant impact.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our reports. Click to create your report.

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Stand-Up India scheme 

Stand-Up India scheme focuses on empowering the minorities, such as scheduled castes, scheduled tribes, and women. The scheme was introduced by the Department of Financial Services (DFS), Ministry of Finance, Government of India.

 The scheme is to facilitate bank loans between Rs.10 lakh and Rs. 1 Crore. They aim to help at least one Scheduled Caste or Scheduled Tribe borrower and at least one woman borrower per bank branch. The scheme shall be operated by all branches of India’s scheduled commercial banks. The main focus of this scheme is to provide funding to enterprises serving the services, manufacturing, and trading sectors. 

  Stand-Up India Scheme Details               
Interest Rate Bank’s MCLR + 3% + tenor premium
Loan amount

Working Capital Limit

 Between Rs. 10 lakh and Rs. 1 crore

Up to Rs. 10 lakh in form of Cash Credit limit
Repayment tenure Max. 7 years with a moratorium period of up to 18 months
Loans offered for Only Green Field Projects
Features of the Stand-up India Scheme
  • Loans are only offered for Green Field Projects which means manufacturing or trading sectors for the first time
  • The nature of the Stand-Up India scheme is a composite loan that is inclusive of a term loan and working capital loan of Rs. 10 lakh and up to Rs. 1 crore
  • Collateral security or a guarantee from the Credit Guarantee Fund Scheme may secure the scheme.
  • SC/ST and women entrepreneurs can use it.
  • The repayment period is a maximum of up to 7 years with a maximum moratorium period of up to 18 months
  • The Stand-up India Scheme does not offer any subsidy.
  • This scheme will cover up to 75% of the project cost.
  • Assures the lowest applicable interest rate of the bank for base rate * MCLR + 3% + tenor premium
  • A loan amount of up to Rs.10 lakh, the sum will be sanctioned by way of overdraft. Sanction the amount above Rs. 10 lakh in the form of the cash credit limit.
What are the Eligibility criteria for the Stand-up India Scheme?
  • Only SC/ST individuals and women entrepreneurs are eligible.
  • Age minimum 18 years.
  • Only green field projects can apply for the loan scheme.
  • Applicant should not have loan defaulted before to any bank or NBFC
  • Non-individuals, such as existing firms and businesses, can also apply for the scheme.
  • 51% of the shareholding and controlling stakes of the firm must be held by either SC/ST and/or women entrepreneurs.
How to apply for the Stand-up India Scheme?
1) Visit the Stand-Up India portal 

2) Click on the ‘Register’ button to fill up the details

3) Enter the business location that includes the business address, state, district, village, town, city, and pin code.

4) Based on your response, you will be categorized and hold a 51% stake or higher, and the same applies to the SC/ST category.

5) Next select the nature of the business, and desired loan amount, and select the drop-down of first-time entrepreneurs.

6) The final step of registration is regarding the applicant’s personal information.

8) By clicking on register applicant, the application for the Stand-up India scheme is submitted.

The respective financial institution and its officials will contact you for further formalities.

What are the documents required for the Stand-up India Scheme?
  • Duly filled application form 
  • Passport-sized photographs
  • Identity Proof: Passport, driving license, voter’s ID card, PAN card, etc.
  • Residence Proof: Voter’s ID card, passport, latest electricity and telephone bills, property tax receipt, etc.
  • Business address proof
  • Partnership deed of the partners
  • Copies of lease deeds or Rent agreement
  • The last 3 years balance sheets of the association
  • Assets and liabilities statement of the promoters and guarantors
  • Any other document required by the bank
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

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How Does Financial Accounting Help Business Management?

Accounting is necessary for small business owners as it helps the owners, managers, investors, and other stakeholders in the business judge the performance of the business. Even the smallest business has more accounting data. Financial accounting helps business management by recording, summarizing, and reporting the stream of transactions and economic activity resulting from business operations over a while. 

Almost every transaction a business makes is recorded in the company’s financial records. This information can be compelling in the right hands. Understanding some of the ways accounting data is used to make business decisions can help you make your business even better.

These financial statements are then used by company managers, investors, analysts, lenders, and other stakeholders to make informed decisions.

Accounting known as the Language of Business, translates numbers to different users for decision making. So, how financial accounting helps business management are:
Business Budgeting And Planning

Business owners need to plan how they allocate their limited resources including labour, machinery, equipment, and cash towards achieving the objectives of the business.

Firstly, the budgeting process starts with sales projections and cash collection estimates. After these budgets are intact, the purchasing and expense forecasts are completed. Last, a projected cash balance is completed and forecast financial statements are created. 

Recording Transactions

The main purpose of accounting is to prepare a systematic, accurate and complete record of all financial transactions of a business. These records are the backbone of the accounting system. Business owners should be able to retrieve and review the transactions whenever required.

Decision Making

Accounting assists in a range of decision-making process and help owners in developing policies to increase the efficiency of business processes. Business owners use managerial accounting information to make business plans and control company operations. They also rely on this information. For example, they use it to evaluate complex business choices like deciding to expand operations or discontinue manufacturing a product.

Business Analysis and Performance

Many small-business owners review accounting information monthly by comparing actual sales, expenses, and profit performance to projected performance. If there are substantial variances in projected versus actual performance, small-business owners can implement changes in the organization to correct these differences. 

The financial reports are a reliable source of measuring the key performance indicators, business owners can determine how well a business is performing against their past performance as well as against the competitors.

Financial Position and Liquidity

The financial statements generated at the end of the accounting cycle reveal the amount of capital invested and depict the financial condition of a business at that time.

Accounting helps in determining the liquidity of a business which refers to the cash and other liquid resources at your disposal to pay off financial commitments. However, the information reduces the risk of bankruptcy through the detection of bottlenecks. 

Financing and Control

Accounting helps business owners prepare historical financial records as well as financial projections which can be used while applying for a loan or securing investment for the business.

By placing various checks across the organization, accounting helps in avoiding losses caused by theft, fraud, errors, damage, obsolescence, and mismanagement. Also, the internal controls safeguard the business assets and avoid long-term losses.

Legal Requirements

Indirect and direct tax filing purposes also require financial statements and information. The law requires businesses to maintain accurate financial records of their transactions. They must also share these reports with shareholders, tax authorities, and regulators.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our reports. Click to create your report.

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KESRU – Kerala Self Employment Scheme

KESRU (Kerala Self Employment Scheme for the Registered Unemployed) 1999 is one of the self-employment programmes of Kerala State under the National Employment Service. Department of Employment handles the schemes through the 14 District Employment Exchanges. This scheme had two components unemployment assistance and self-employment assistance introduced in 1982.
The employment exchanges activated the scheme to support Entrepreneurship amongst job seekers. The scheme offers for sanction of a bank loan of up to Rs. 1,00,000 for unemployed persons to start a business. The government provides the KESRU loan before the origin of self-employment ventures of individuals. Out of the bank loan, a total of up to 20% is reimbursed as a Government Subsidy via the Employment Department. Hence, there is no requirement for contribution from the beneficiary to avail loan under this scheme.

The key feature of  KESRU – Kerala Self Employment Scheme:
  • Lenders grant bank loans of up to Rs. 1,00,000 for starting ventures.
  • The spouse or parents can be the guarantor
  • Students are not eligible for the scheme
  • KESRU beneficiaries are not eligible for Unemployment dole but will be considered for regular positions
  • Employment exchange officers will monitor the scheme, it is their duty to make sure the sanctioned amount must be used for self-employment only.
  • Application forms are available free of cost from employment exchanges
What are the Eligibility Criteria for KESRU Loan?
  • The applicant must meet the eligibility criteria for KESRU Loan:
  • The minimum age should be 21 and a maximum of 50.
  • The annual income of the applicant should be less than a lakh
  • The project of the applicant should suit his qualification
  • Students are not eligible to apply for the scheme
  • The unemployed applicant who is active on the Register of Employment Exchange is eligible.
What are the Documents Required for the KESRU Scheme?

In the above list, a Business plan also known as a project report is a crucial document when applying for a bank loan. The bank uses this document to analyze the overall feasibility, risks, financial viability, and potential of a project. A well-crafted and convincing project report increases the chances of loan approval. With Finline you can craft a compelling project report in less than 10 minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your project report.

How to apply for the KESRU – Kerala Self Employment Scheme?

To apply KESRU, follow the below steps:

  • First, visit the Employment Exchange Office
  • Fill up the KESRU application form.
  • After filling in all the details attach all important documents with the form.
  • Submit the form to the respective Employment Exchange Office.
  • Following the verification, the concerned District Employment Exchange will scrutinize the application.
  • The office will submit the application to the District Committee for sanctioning loans via nationalized banks, district cooperative banks, scheduled banks, and KSFE.
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How to Raise Money for Business as a Women Entrepreneur

Being an entrepreneur is hard when you are a woman trying to make a brand in a male-dominated area. Currently, men comprise 86 % of Indian entrepreneurship and the challenges manifold as there are bigger mountains to climb. 

Confidence is one of the most important traits that every woman entrepreneur must possess. If you want to break the glass ceiling, you must have trust and confidence in your skills and talent. Although, the most common challenge faced by women entrepreneurs was the difficulty of raising funds. They claim that this challenge is mainly the result of gender bias, like any other workspace.

What are the Government Funding Schemes For Women Entrepreneurs?

Governments at the central and state levels have launched financial schemes, for women entrepreneurs. To encourage women to build up small business setups and also to use their skills, the government offers a few loans in India:

1. Annapurna Scheme

This scheme is offered by the State Bank of Mysore for those women entrepreneurs who are setting up the food catering business to sell packed meals, snacks, etc. Under this loan, a guarantor is required along with the assets of the business being pledged as collateral security. Also, the maximum amount of money that is granted is ₹50,000 which has to be repaid in monthly installments for 36 months.

2. Stree Shakti Package For Women Entrepreneurs

This scheme is offered by most of the SBI branches to women who have a 50% share in the ownership of a firm or business and have taken part in the state agencies that run the Entrepreneurship Development Programmes (EDP). The scheme also offers a discounted rate of interest by 0.50% in case the amount of the loan is more than ₹2 lakhs.

3. Bharatiya Mahila Bank Business Loan

This loan is a support system for budding women entrepreneurs looking to start new ventures in the fields of the retail sector, loans against property, MICRO loans, and SME loans. The maximum loan amount under this loan goes up to ₹20 crores. Additionally, there is no requirement for collateral security for a loan of up to ₹1 crore.

4. Dena Shakti Scheme

This scheme is provided by Dena Bank to those women entrepreneurs in the fields of agriculture, manufacturing, micro-credit, retail stores, or small enterprises that require financial assistance. The maximum loan amount is ₹20 lakhs for retail trade, education, and housing.

5. Udyogini Scheme

This scheme is offered by Punjab and Sind Bank to provide women entrepreneurs involved in agriculture, retail, and small business enterprises with loans for business at flexible terms and concessional interest rates. The maximum amount of loan under this scheme for women between the age bracket of 18-45 years is ₹1 lakh.

6. Cent Kalyani Scheme

The scheme is offered by the Central Bank of India to support women in starting a new venture or expanding or modifying an existing enterprise. This loan can be availed by women who are involved in village and cottage industries, micro, small and medium enterprises, self-employed women, agriculture and allied activities, retail trade, and government-sponsored programs. The maximum amount that can be granted under the scheme is ₹100 lakhs.

7. Mahila Udyam Nidhi Scheme

Punjab National Bank launched this scheme to support women entrepreneurs involved in small-scale industries by granting them soft loans that they can repay over 10 years. The maximum amount granted under this scheme is ₹10 lakhs and the interest depends upon the market rates.

8. Mudra Yojana Scheme For Women

This scheme by Govt. of India is for individual women wanting to start small new enterprises and businesses, as well as for a group of women wanting to start a venture together. 

If the loan is granted, a Mudra card will be given to you which functions the same way as a credit card however the funds available are limited to 10% of the loan amount granted to you.

9. Orient Mahila Vikas Yojana Scheme

This scheme provided by the Oriental Bank of Commerce is for those women who hold a 51% share capital individually or jointly in a proprietary concern. Loans of ₹10 lakhs up to ₹25 lakhs for small-scale industries do not require collateral security, and the repayment period is 7 years.

10. Trade Related Entrepreneurship Assistance and Development

The TRADE scheme aims to empower women by providing credit to projects, conducting specific training and counselling, and eliciting information. The scheme provides for a government grant of up to 30% of the total project cost as valued by lending institutions. Even so, these institutions would finance the other 70 %.

Non-Government Funding Scheme For Women Entrepreneurs 

In starting a venture, access to capital is one of the biggest hurdles women entrepreneurs face. Government-initiated women-centric schemes can help bridge the gap between institutional lending and the financial needs of women entrepreneurs. Currently, there are a few non-government platforms in India which are:

1. Saha Fund 

The Securities and Exchange Board of India approved Saha Fund as the first women-focused venture capital fund. They aim not only at investing in startups founded by women but also where women hold senior management roles and the ones that make products and services for women. To discover and leverage the untapped women talent available in the market, Saha Fund invests in companies across e-commerce, social media, mobile, cloud, analytics, education, healthcare, analytics, food tech, and tech platforms.

2. Women Entrepreneurs India 

Women Entrepreneurs India lends a helping hand to women in establishing their businesses with ideas that coincide with their abilities, interests, and skills, and to upscale their existing business. Moreover, they strive to educate, train, support, and motivate women entrepreneurs all over India, through innovative business ideas, startup funding avenues, marketing support, and mentor connections.

3. SonderConnect

SonderConnect aims to create a pipeline of high-potential women entrepreneurs and assist them in scaling by connecting them to investors and providing access to a powerful global network. They support women in their entrepreneurial journey to become self-governing. Also, they guide them to thrive in their endeavours through our comprehensive, expert-led mentoring programs.

4. HerMoneyTalks 

HerMoney Talks is India’s first financial services marketplace for women. They aim to relate women to financial institutions and facilitate credit for women. They also connect women to financial institutions and experts and become financial services and credit facilitators for women in India.

5. Crowdfunding

Though not used that much, crowdfunding is an excellent way to raise capital. However, there are two ways of going about this: rewards-based or through equity. In the first instance, you send a product or service of your company, in exchange for the money they give. As far as equity is concerned, you’re giving the ‘lenders’ a part of your company to own, i.e. they’re buying the stocks of your company.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.

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Methods to Fund Your Business Growth

At some point, this will likely require additional funding to cover expenses and accelerate growth. Most small business owners are constantly looking for ways to improve their business growth. Let’s understand the key methods to fund your business growth. 

The first step is to make sure you have put together a strategic growth plan. Develop a strategic growth plan using your business plan.

Focus on the strategies you need to implement and milestones you need to hit to grow your business. A financial forecast will ensure that you understand how much money you need to fund your growth, based on your projections.

What are the key methods for funding your business?

Identify which funding method you intend to explore. More likely, you’ll be leveraging multiple funding methods but your decision depends on how much funding you need, the level of risk you’re willing to take, and how accessible funding options are for your business. Here are a few common options worth exploring.

1. Bootstrapping

Finance your business with your funds, through your savings, personal loans, business loans, or with credit cards. When you bootstrap, you retain complete control and ownership over your business.

Bootstrapping also means that you will need to start producing revenue for your business as quickly as possible to continue to fund the business on your own.

2. Bank loans

A bank loan provides short or long-term finance. The bank offers loans for a fixed period for a particular rate of interest. In addition to your business plan, the bank will require collateral security for the loan. However, in the case of a startup, this security often comes in the form of personal guarantees provided by the entrepreneur.

3. Get Funding From Business Incubators & Accelerators:

There are a few fundamental differences between the two terms. Incubators are like a parent to a child, who nurture the business by providing shelter tools and training and network to a business. Accelerators do more or less the same thing, but an incubator helps/assists/nurtures a business to walk, while an accelerator helps to run/take a giant leap.

Early-stage businesses can consider incubator and accelerator programs as funding options. These programs assist hundreds of startup businesses every year.

4. Friends and family financing

There is nothing worse than family and friends fighting regarding money and business. But keep in mind, that taking money from friends and family can be tricky and emotional. 

Providing your family with the strategic growth plan of your business plan, so that they can see that you are being thoughtful about your growth can be a great first step. The money can be in the form of a loan, or exchange for equity.

Also Read: How to Pitch Your Business to Your Community, Friends and Family

5. Crowdfunding

Crowdfunding is when you ask a crowd of people to donate a defined amount of money for your project. The three general categories crowdfunding can fall under are equity, donation, and debt.

6. Angel investors

Angel investors are affluent individuals who provide capital for startups. These investors are looking for companies that they can invest in, as a way to get a return on their investment. Angel investors intend to turn the debt into equity at a later date or ownership equity or ownership of assets.

If you do not have an exit strategy for your business, angel investors may not be your best route. If you plan to grow your business and sell it, acquire more businesses, or even potentially go big and IPO, then angel investors might be right for you. But if you plan to grow your business, own it, and run it forever, you may want to think twice about approaching angel investors.

7. Venture capitalists

A venture capitalist, VC are people who invests in business ventures by providing capital for either startup or expansion. VCs are looking for a higher rate of return than would be given by more traditional investments. You need to plan a very high growth strategy to even think about bringing in VCs.

8. Business Bank Loans:

Banks are the first place that entrepreneurs go when thinking about funding. A business loan from the bank would involve the usual process of sharing the business plan and the valuation details, along with the project report, based on which the loan is sanctioned.

The bank provides two kinds of financing for businesses. One is a working capital loan, and the other is funding. Working Capital loan is the loan required to run one complete cycle of revenue-generating operations. 

Almost every bank in India offers SME finance through various programs. For instance, leading Indian banks – SBI, Andhra Bank, PNB,  HDFC, ICICI, Indian Bank and Axis banks have more than 7-8 different options to offer collateral-free business loans. 

9. Microfinance Providers or NBFCs

NBFCs are Non-Banking Financial Corporations are corporations that provide Banking services without meeting the legal requirement/definition of a bank.

Microfinance is the access of financial services to those who do not have access to conventional banking services. It is increasingly becoming popular for those whose requirements are limited and whose credit ratings are not favoured by the bank.

10. Govt Programs That Offer Startup Capital:

Government-backed ‘Pradhan Mantri Micro Units Development and Refinance Agency Limited (MUDRA)‘has started to extend benefits to around 10 lakh SMEs. You are supposed to submit your business plan and once approved, the loan gets sanctioned. You get a MUDRA Card, which is like a credit card, which you can use to purchase raw materials, other expenses, etc. 

Also Know: How to Apply for a MUDRA Loan?

Also, different states have come up with different programs like Kerala State Self Entrepreneur Development Mission (KSSEDM), Maharashtra Centre for Entrepreneurship Development, Rajasthan Startup Fest, etc to encourage small businesses.

SIDBI – Small Industries Development Bank Of India also offers business loans to the MSME sector.

The Indian government has also announced the Atmanirbhar Bharat package to fight the COVID-19 situation.

If you want to grow fast, you probably need outside sources of capital. If you bootstrap and remain without external funding for too long, you may be unable to take advantage of market opportunities.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our project report. Click to create your report.

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How to Pitch Your Business to Your Community, Friends and Family 

Someone who is starting or continuing a business knows the importance of pitching. Sometimes, pitching to friends and family can be more complicated than pitching to strangers. Friends and family should be seen as one of your primary investment possibilities. Those can contribute to important connections, investment, and immediate business.

However, we have plans for entrepreneurs, to talk about your business with your friends, family, and community.
1. Customize your elevator pitch

Entrepreneurs should always have an elevator pitch ready for any event. People have an attention span of about eight seconds. It’s important to explain what your business is, why it’s important, your business model, your market opportunity, and your value proposition. 

For example, when pitching to someone with no business background looks different than pitching to your wealthy uncle, so when talking to friends and family avoid using industry slang or acronyms that they may not understand. 

2. Explore friends and family with relevant experience

Starting with those who understand your business or industry not only helps your pitch conversation but also provides business advice and guidance. Explore well-connected friends, family, and members of your community who have experience relevant to your business. 

3. Evaluate financial availability and ask for support 

Evaluate which of your friends and family could best support you. Don’t waste a difficult conversation on a friend or family member you know isn’t in the best place to support you. Carefully explain how you’ll use the funds and outline different milestones you anticipate reaching.

4. Document the funding                 

These relationships are the most delicate as they’re built on deeper, more personal grounds. Respect the risk and draw up a formal contract that holds everyone accountable. Don’t rely only on a handshake for any deal, particularly one made with friends or family.

5. Keep communication lines open

Stay communicating the status and success of your business to your friends, family, and community. Don’t limit your pitch to a one-time conversation. If they invested funds, keeping them updated is a must.

Consistently reporting about your business is a way to keep you remembered and open to referrals. Consider social media and email blasts as options to pitch your business and update your community.

6. Draft your business clearly

It’s essential to draft and communicate your business goals and potential success. While most friends and family won’t read your entire business plan. You should be prepared to deliver your executive summary regarding your target market, financials, and overall strategy. Having a precise executive summary adds credibility to your idea and showcases forward-thinking on your part.

Sharing your business plan with your friends and family not only increases the chances of gaining business from them but also equips them to be advocates and recommenders of your business.

Why you should pitch your business to friends and family?

Here are a few reasons why important to pitch to and seek the support of friends, family, and the community around you:

  • They know and trust you 
  • They can bring in business 
  • It builds up the community 
  • It provides proof for other investors
How to announce your business to your network? 

Here are ways you can introduce your business to your networks:

1. Make a list of everyone you could reach out to. 

Email contacts, LinkedIn connections, and Facebook contacts. You might send this announcement message over email, in a direct message, or share a variation as a social media post.

2.    Plan your emails. Plan

Reach out to 5-10 (or more) contacts each day

3. Send your emails and track responses.

To track your responses, keep a note of the date you reach out to them, note their response, and track any potential business it could bring your way, and note an appropriate follow-up date based on their response.

4. Meetups and gatherings
Develop a business plan to help your pitch

What’s the best way to develop and share your business plan with friends, family, and your community? 

Sure, your friends and family may not be investors looking to give you millions, but they’re sources of support. It can also bring in new business and connections you would’ve otherwise never had. Bridge the gap, share your business plan, and start pitching your business to those around you. 

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.

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What Investors Want to Learn From Your Business Plan

Throwing your idea to investors, whether they are bankers, VCs, or angels, can be intimidating, so plan by putting yourself in the investor’s shoes. Every investor will have their conditions and be looking for something that matches their interests and pursuits. There are several things you should consider if you want to stand a chance at getting funded. Investors learn a lot of things about your business from your business plan.

Here is a list of important things that an investor wants to learn before dropping money into a company.          
1. Financial performance. 

Potential investors want the numbers so it’s clear that your company has outstanding financial performance. Venture capitalists will look for the potential of high returns and a clear exit opportunity.

Be prepared to answer questions about the financial steadiness of your company. You’ll be addressing an investor with a business plan that has your financials worked through. The cash flow plan—how much money is coming into your business and how much money is going out. Prove your business is competent in handling its financial commitments.

Give them an idea of how long it will take for you to make a profit and for them to recover their investment. This is one area that you can expect investors to seriously evaluate 

2. Background and experience in the industry.  

Passion and commitment should be evident to inspire confidence in investors and stakeholders. Investors look for experienced entrepreneurs and management teams with a track record of high performance and leadership. Also, most investors will research your business experience and your background in the industry. 

“Investor fit” is particularly important to angel investors compared to venture capital fund managers. Angel investors place great importance on “chemistry” between themselves and the entrepreneur because they generally take a more hands-on approach to the businesses they invest in.

3. Company uniqueness. 

Prove to your investors, with solid evidence, that your market potential is big enough to make investing valuable. Convince the uniqueness of the product or services.                        

Venture capitalists look for product characteristics such as proprietary features and competitive advantage. Investors look for features that differentiate them from potential competitors, exclusive licenses, and exclusive marketing and distribution relationships.                                                                                            

 4. Effective business model. 

 Present the business model that you are currently using and prove that it will help your company become more profitable.

For example, venture capital fund managers and angel investors put more emphasis on both market and finance issues. Different types of investors seek different characteristics from a business plan. It’s important to customize your business plan and pitch to each investor.            

5. Large market size. 

Market size is one of those things that will attract an investor’s attention. Angel investors ideally invest in solutions that discuss major problems for significantly large target markets. On the other hand, venture capitalists look at market characteristics such as significant growth and limited competition when investing.

What will make it hard for others to rise above you? What is your “unfair advantage” or the thing that no one can compete with? Therefore, investors look for companies that can grow fast and generate notable profits beyond the initial product idea. 

A larger and more stable customer base will serve as proof that, the stronger competitive advantage you will have when pitching to investors. 

What should go into your investor-ready business plan?

Here’s what you need to include in your Business Plan:

  1. The problem or need that you’re solving for your customers
  2.  Your product or service—how you’re solving the problem
  3. ·The target market size and demographics
  4.  Your sales channels
  5.  A basic marketing plan 
  6. ·Competitor analysis and your competitive advantage
  7. Real financial projections including a full cash flow forecast
  8. Key milestones in your business to date and a timeline of expected milestones to come
  9. Key team members, business owners, and advisers 
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.

       

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Importance of Business Forecasting for Business Growth and Success

A forecast can play a major role in driving a company’s success or failure. But how do you figure out the best time to invest in growth? Should you strive to anticipate market trends? For that, you need to know about the importance of business forecasting.

Forecasting is valuable to businesses because it gives them the capability to make informed business decisions and develop data-driven strategies. Financial and operational decisions are made based on current market conditions and predictions of how the future looks. It helps reduce risk and anticipate change in the market. Past data is aggregated and analyzed to find patterns, used to predict future trends and changes. Forecasting enables your company to be proactive instead of reactive. 

What is Business Forecasting?

Business forecasting consists of tools and techniques used to predict changes in business, such as sales, expenditures, profits, and losses. Business forecasting intends to develop better strategies based on these informed predictions; helping to eliminate potential failure or losses before they happen.

How do business owners know when to invest in growth?

Whether or not it’s a good time to grow comes down to strategic, lean business planning. This requires you to take the time to understand what opportunities you have for your business, and which areas of your business you should focus on. As part of that strategic lean planning process, you are going to have to design a financial forecast or sales forecast and cash flow forecasts in particular. 

Who Needs a Forecast?

For a business to operate efficiently, it needs some idea of what the future will look like. A forecast provides this look as a foundation upon which to plan. Therefore, every functional group within a business benefits from a forecast.

For salespeople, forecast numbers influence how the sales function is managed. Forecasts also help to understand customer engagement and therefore shape marketing efforts. Marketers can use forecasts to gauge the effectiveness of their campaigns, decide which markets to enter and exit and determine the life cycle of their products. Because forecasts estimate an expected sales volume over a specified period, salespeople can utilize them to establish their activity goals, and they can subsequently make adjustments to achieve sales goals.

Importance of Business Forecasting

Now we know, the importance of business forecasting. Let see what are the ways forecasting can help your organization:

1. Helps set goals and plan

Forecasting allows businesses to set reasonable and measurable goals based on current and historical data. Having accurate data and statistics to analyze helps businesses decide what amount of change, growth, or improvement will be determined as a success. There are certain tools such as CRM which will be discussed later in this blog that help to visualize forecasting and give insight into things like the sales pipeline, opportunities, and more. Having these goals helps to evaluate progress, and adapt business processes needed to proceed on the desired path. 

2. Helps budget

Having perceptibility into potential trends and changes helps businesses to know where to allocate their budget and adjust strategy accordingly. Gaining insights into current business functionality, along with later predicted trends and combining this information into meaningful insights, leads to an improved allocation and estimation of the budget. Budgeting quantifies the expectation of revenues that a business wants to achieve for a future period. Whereas, financial forecasting estimates the amount of revenue or income that will be achieved in a future period.

3. Helps anticipate change within the market

Having insight into previous data not only changes the current data but projections of what could happen in the future help businesses to make adjustments to business strategy and alter current operations to change their outcome.

Senior managers and finance teams use forecasts to prepare and evaluate financial plans, capitalize on production, and assess needs and logistics. A forecast can help inform critical decisions on how to allocate resources and set overhead levels within a business: personnel, rent, utilities, and other overhead.

Business Forecasting helps position businesses to become active instead of reactive. If there is a trend that is predicted to take over the market, or data is showing changes in consumer behavior it is important to readjust to the market overall and optimize resources to stand out from the competition.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our reports. Click to create your report.

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Citibank Business Loans

Citibank Business Loan offers you business loans for efficient working capital management. CitiBusiness services provide financing solutions to micro-to-small enterprises. Various MSME Loan Products such as Working Capital Loans, Overdrafts, Short and Long Term Loans, and Import and Export Finance are specially designed to meet all your financing requirements and fuel your business growth.

 Citibank is rated the best in this industry if you require a fast-track loan approval or a secured term loan. You need to pay a 2% processing fee pre-closure charges (2%) and renewal fees (2%) associated with the business loan. 

Citibank Business Loan Details
Minimum Loan Amount ₹ 1,000,000
Maximum Loan Amount ₹ 15,000,000
Minimum Tenure 12 months
Maximum Tenure 120 months
Interest Rates 13.49% – 20.75%.
Processing Fee Up to 2% + GST as applicable
Foreclosure Charges Allowed after 12 EMIs plus 4% prepayment
What are the Features of a Citibank Business Loan?
  • The minimum and maximum amounts for a business loan are ₹ 1,000,000 to ₹ 15,000,000.
  •  Get a loan within 48 hours.
  • Requires minimum documentation & has simple free processing.
  • The flexible loan tenure is up to 10 years.
  • Pre-payment charges are 4%.
  • No guarantor is required.
  • Conditional pre-closure and part payment options are available after 12 months.
  • Doorstep service is offered.
  • The top-up loan availability option is made available.
  • E-approval and balance transfer are add-ons.
  • Comparatively low Business Loan Interest Rates
What are the Documents required for a Citibank Business Loan?
  • Application Form: Complete the loan application form with one passport-size photograph
  • Valid Proof of Applicant’s Identity: Passport, Photo PAN card, Voter’s identity card, Driving license, and MAPIN card
  • Proof of Residence: Ration card Tel/ Lease agreement/ Electricity Bill/ Passport/Trade license /Sales Tax certificate
  • Proof of Age: Passport, Photo PAN card, Voter’s identity card
  • Financial Documents: Copies of IT returns for the last two years along with the latest Bank statements for 6 months and P & L and balance sheet for the last two years
  • Business plan/project report
  • Self Employed (Private Ltd. Co. and Partnership Firms): Copies of IT returns for the last two years and P & L and balance sheet for the last two years audited by a chartered accountant
  • Self-Employed Individuals: Copies of IT returns for the last two years and Bank statements for the last 6 months – Professionals: P & L and balance sheet for the last two years audited by a chartered accountant
  • Self-Employed Individuals – Non-Professionals: P & L and balance sheet for last two years audited by a chartered accountant and Copies of IT returns for the last two years and Bank statements 
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.