As a solopreneur, I know the difficulties we face when attempting to raise capital. We are often overlooked as real small business owners. Although I own a corporation that I want to grow into a thriving small business, some financing sources just don’t see it that way since I am currently the sole employee. Earlier this year, I approached an organization in my current home town to apply for their business accelerator grant. The organization is Ann Arbor Spark, a popular organization for companies in Michigan that need startup help. I sent in a great executive summary and I just knew in my heart that I would be an awesome candidate for the program and they would be impressed with my progress in business thus far. Boy was I wrong. I was shot down immediately.
I was told “we don’t help solopreneurs – we only provide assistance to businesses that are going to reach $10 million in revenues by year 5.” This was a shock to me for several reasons. The first reason was this criteria was not mentioned on the webpage where information about the business accelerator grant was located. Secondly, I know of many multi-million dollar business owners who started out as a solopreneur so the fact that they don’t help solopreneurs is simply mind-boggling to me. Unfortunately this is the attitude that too many of these “incubator” like organizations possess. They just don’t care about the little guy. They only want to help when the little guy begins making big money.
Fortunately, I have found a good source of funding for solopreneurs so all is not lost. According to the SBA (Small Business Administration), if you’re a startup, applying for a microloan before anything else is the right thing to do. As a solopreneur, you most likely would fall into the startup category. The SBA microloan provides up to $50,000 in funding (with the average loan being $13,000) to small business owners in need of capital to start or expand. Although anyone can apply, the program is often geared towards people who are:
- Low income
- Undeserved & Disadvantaged (i.e. women, minorities, and veterans)
- Sub-prime borrowers (aka bad credit borrowers)
obtaining a microloan maybe your only chance at raising capital. A microloan could pay for the things that solopreneurs often need to compete with larger companies. This includes branding, marketing and advertising, website hosting, and website development, etc.
If you’re interested in applying, the SBA provides a list of microloan lenders in each state. You can find that list here. Keep in mind that you will need a business plan along with marketing plan and at least 3 years of financial projections to apply for a microloan. Therefore if you don’t have one, you will want to get that in order before you apply (so you can be prepared).