All start-up businesses face funding issues. But some fledgling business owners encounter other barriers that may have to do with the viability of their business plan, their readiness to take on the challenge, and the Big B word: Bankability.

When it comes to bringing a product or service to the market, Northern Nevada bankers want fledgling business people to be a going concern, and that often means a turndown if you have a poor credit background, no business history, and no assets to collateralize the loan. Some bypass this route by bootstrapping their way into business with family loans, home equity lines of credit, or using a credit card as the bank of last resort.

Even then, business success can be a crapshoot. Indeed, the bankruptcy courts are testimony to the ill-prepared, underfunded and overconfident.

Helping low- to moderate-income folks with entrepreneurial training, technical assistance and access to loans for the past 15 years has been the goal of the Nevada Microenterprise Initiative. The organization “combines small business lending and social justice,” says Deborah Prout, executive director of the statewide, nonprofit business development corporation.

While NMI’s corporate office is in Reno, it services other clients in Carson City and Las Vegas. “There’s $1 million on the street right now in loans, over $3 million in the history of the organization,” says Prout, who has an extensive background in health care public policy, small business consulting, organizational development and fundraising.

Through training, technical assistance and lending programs, entrepreneurs are lent the tools of business management and given access to capital necessary to succeed, Prout says. Small businesses that demonstrate the ability to be successful, but cannot access bank financing, may qualify for a microloan for startup, expansion or working capital needs. These include:

• Startup business loans up to $10,000

• Existing business loans up to $35,000

• Maximum interest rate of 13.5 percent

• Maximum terms of six years

Typically, loans are paid back in a 3- to 5- year period. “Microenterprise” refers to a small business that has five or fewer employees and lacks access to conventional loans, equity or other banking services.

Key to the fledgling entrepreneur’s future success is taking part in a business feasibility workshop. This 12-session course helps the starry-eyed look at the hard-edged realities of starting and maintaining a business, Prout says. “They may have a ‘great idea,’ but we ask them if it will generate enough customers for a livelihood.” Often, a person may find that it’s not viable given the larger business landscape where there are more established, competitive players.

In this course, participants project a revenue stream, assess personal readiness, the validity of the business plan, the role of marketing, and pricing strategies. “At the 12-week mark, some decide there’s more work to do,” Prout says. “They thought it was going to be easy … and it’s clearly not as fun as they thought it would be.”

For others, the prospect of self-employment also is a challenge. “They look in the mirror and they [potentially] see the boss from hell — themselves,” she says, talking about the importance of a positive attitude and confidence in making an enterprise work.

“If someone decides not to, that’s one less business failure out there and we’ll count this [self-realization] as a success,” Prout says. However, many participants skillfully determine that future client base, put together a solid business plan and get over the hurdle of financial projections. That’s when they meet with a four-person loan review committee that assesses their readiness. “They are asking, ‘Is this a person who has the resiliency to pull it off … and who also takes the process seriously?’” Prout says. “At the end of the day, they are character loans,” Prout says, adding the organization doesn’t credit score, but does look at credit and bill paying history.

Indeed, the organization takes its loan payments very seriously. “This is not a grant program,” Prout says. “Outside of the warm fuzzies, we don’t want to be the payment of last resort.” In the current portfolio, Prout estimates 12-13 percent of the loans are at the 30-day delinquent stage.

Last year, NMI made about 30 loans, totaling $300,000. The categories of businesses are all over the map. Hairdressers. Dog walkers. Florists. Pest management. Janitorial services. A sole proprietor who takes down and resets mobile homes.

To a business owner, they all concur that the NMI was the only lender willing to help them fulfill their goals.

“I have passion, I have commitment and a good work ethic, but without business knowledge and skills, my dream would have remained a dream,” said Chef Michelle Palmer, owner of Absolutely Michelle’s Catering. “NMI helped me to turn my dream into a real business,” says Palmer, who enrolled in NMI classes 10 years ago, completed her business plan and received financing. Today, the award-winning, “first chef for hire” in the area has a clientele that reads like a Northern Nevada Who’s Who.

Palmer loves the variety of work, is constantly looking for new opportunities, and likes being able to call her own shots.

So does Jan Shedeger of Road Rider of Reno. Located on Market Street, the company sells accessories, apparel and parts for street motorcycles. “The business has been received well and grown nicely,” Shedeger says. Launching the enterprise — from idea stage with a partner to securing the loan — took two months, she added.