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  • Business Loans

How To Write A Successful Business Plan For A Loan

Kiah Treece

Updated: Aug 18, 2022, 12:46pm

A business plan is a document that lays out a company’s strategy and, in some cases, how a business owner plans to use loan funds, investments and capital. It demonstrates that a business is already producing income and has a plan to continue doing so moving forward.

A successful business plan is well-written, realistic, concise and, most importantly, convinces financial institutions that approving your business for a loan is a smart choice.

Here’s what you need to know about each section of a business plan and how to write a plan that will earn a lender’s stamp of approval.

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What Does a Successful Business Plan Include?

A successful business plan outlines your entire business and effectively explains how it makes money and why it’s likely to succeed. This is especially important if you’re trying to get a small business loan .

The content of a business plan should vary from company to company, but there are a few common sections that will help lenders better understand your business and help you qualify for financing.

Executive Summary

An executive summary concisely summarizes your business plan—usually on one page. The goals of this section are to inform the reader about the business as a whole, summarize what is contained in the rest of the document and capture their interest. That said, the best use of this section may depend on the age of your business.

  • Startups. Startup owners typically use the executive summary to discuss the business opportunity, their target market and their planned strategy for building the business. The section also may touch on relevant market competition. Startup companies in particular should use the executive summary to build a lender’s confidence in the business.
  • Established businesses. Companies that have been in business for several years usually orient their executive summaries around past achievements and growth plans. In this case, the section may begin with the company’s mission statement and provide information about business operations and financials before outlining future goals.

Industry Analysis

The industry analysis section of a business plan defines the business’ industry and mentions current trends—with a focus on risks and opportunities. The section also informs the reader about how the industry works and where the business fits in the industry as a whole.

This section should start by defining the industry, as well as what products and services it provides, and what consumer demand it fulfills. Next, identify the most important influences in the industry. In the case of a bank, this may include applicable government regulations; for a clothing boutique, it may be consumer trends and budget.

The industry analysis should also define the company’s intended niche in the industry.

Market Analysis

The market analysis zooms into the specific market niche mentioned in the previous section. Market analysis aims to detail the segment of the broader market the business is intended to fit within. For example, a fashion brand or boutique may target high-income consumers.

Use this section to explain how the segment differs from the wider industry. In the fashion boutique example, a market analysis may reveal that high-income consumers in the fashion industry pay substantially more for brands that are considered exclusive.

Also, describe the size of your business’ niche and how it fits into the wider industry. This should include mention of how many existing businesses operate in this niche and how they target consumers.

Competitor Analysis

A competitor analysis explains what competitors in your niche do and informs the reader of the current market environment. Start with an overall assessment of your competitors. Then, discuss the most relevant competitors for your niche. When conducting a competitor analysis, ask yourself the following questions:

  • Where do your ideal customers currently shop?
  • How do these competitors differentiate themselves?
  • How are competitor products and services priced?
  • Why do customers choose those products or service providers?

Using the example above, many clothing boutiques compete by providing higher quality products or a unique, luxury shopping experience. If your store has a single location, your competitor might be another clothing store with a similar price-point or signature style.

Target Market Segmentation

In the target market segmentation, you’ll identify your business’ target market and describe how you will meet its needs. This section aims to instill confidence in the lender by providing a clear and objective strategy for building revenue.

Begin the section by informing how your products or services meet your shoppers’ needs. Next, explain how consumers can access your products or services—including a brief outline of your marketing strategy and how it is tailored to your target clients. Contrast this to your competitors’ strategy as defined in the previous section. After reading this portion of the business plan, the lender should know exactly how your business intends to compete.

Services or Products Offered

Use this section of the plan to explain what your business offers its ideal customers and to contrast your product and service offering to that of your competitors. Start by defining your product and service offering, including pricing. Also, inform the reader what equipment or materials you need to provide your products and services. For instance, a fashion apparel brand needs access to textile manufacturers.

Marketing Plan and Sales Strategy

Now that the lender understands what you offer, explain how you plan to market it in greater detail. This section outlines how you’ll attract and convince consumers to buy from you. The goal is to provide a flexible and realistic marketing and sales plan that convinces the reader you know how to attract consumers.

The sales strategy section of your business plan also should include the company’s revenue goals and explain how your marketing and sales department will achieve them. Provide in-depth details on the marketing and sales challenges you’ll face and how to overcome them. While this information is always relevant, it’s particularly important to lenders reviewing your loan application as they will want to know how you plan to make money.

Operations Plan

The operations plan details your company’s day-to-day operations. This detail-oriented section should comprehensively explain how your business will operate, beginning with a list of your company’s daily activities.

As a high-end clothing boutique, your daily operations may include:

  • A manager reconciling sales receipts and inventory numbers
  • Stylists researching future trends and sourcing new inventory
  • A marketing team building an online and social media presence

Note: This section is more about your business’s daily processes rather than its organizational structure—which is the next section.

Management Team

Use the management section of your business plan to tell the lender who does what in the company and how they’re compensated. Help the lender better understand the people behind the company by including biographical and background information on the company’s owners and key executives.

The best way to present this information is often with an organizational flowchart. You can also include other information about the company in this section, like your mission statement and values.

Financial Plan

Your financial plan tells a prospective lender two things: how much you plan to spend each year and how much you’ll earn in revenue. This section is the most important for most businesses, as it can make or break a lender’s confidence and willingness to extend credit.

Always include the following documents in the financial section of your business plan:

  • Cash flow statements
  • Income statements
  • Capital expenditure budgets
  • Balance sheets

Most lenders ask established businesses for at least three years of financial data, and some may ask for five. Preferably, include as much financial data as possible. If you’re a startup, include estimated costs and projected revenue, and supplement your data with industry averages or financial data from competitors.

Exit Strategy

Your business plan should always include an exit strategy in case things go wrong or you simply decide to close up shop. This may include everything from taking on new partners to selling your business or even declaring bankruptcy. Having an exit strategy is another way to show lenders that you have thought about the risks involved with your business and are prepared for them.

The appendix of a business plan normally contains financial information and other documents the reader may need to gain a comprehensive understanding of the business. Established businesses typically include financial statements and projections, at a minimum. In contrast, a startup could include the research they conducted to make the business plan.

Also consider including relevant resumes, marketing materials, letters of recommendation or references. For ease, your appendix should have a table of contents directing lenders to the most important documents.

What Lenders Look for In a Business Plan

There are five things that lenders typically look at when making business lending decisions: character, capacity, capital, conditions and collateral. By understanding these key considerations, you can draft a business plan that speaks to a lender’s interests and concerns.

A business’ character includes subjective, intangible qualities like whether its owners are perceived as honest, competent or determined. Stated another way, lenders want to know that you are honest and have integrity. These qualities can be critical for evaluating candidates because most lenders don’t want to lend to someone they don’t feel they can trust.

To evaluate the character of you and your business, lenders look at your personal credit history as well as your business’ financial history. Use your business plan to bolster your character by including ample financial records, letters of recommendation and other relevant documents.

Lenders want to know that you have the ability to repay the loan. They evaluate this by looking at your business’ financial history to see how much revenue you have generated in the past and how much profit you have made.

Lenders might also judge your capacity based on your business’ financial projections as well as your personal credit history and household income. Where relevant, lenders look at your management team to see if they have the experience needed to grow your business or keep it on a path toward success.

When reviewing your loan application, lenders read your business plan to see how much money you need to borrow and how you will repay the loan. They also look at your financial statements to see how much cash you have on hand and how much debt you are carrying.

Likewise, lenders often prefer business owners who have made larger personal financial investments in their enterprises. A personal financial investment reveals your commitment to the business and demonstrates you have the resources to pay off a large loan.

Ultimately, a lender’s biggest concern is whether your business can realistically succeed. So, they judge your company’s chances of success using your business plan as well as current market conditions. A good business plan can improve your lender’s confidence by convincing the lender that market conditions and your business strategy increase your odds of success.

In some cases, lenders want to know that you have something of value that they can use to secure the loan. This can be property, equipment, inventory or even receivables. If you don’t have any collateral, lenders may still approve a loan if you have a good credit history and a solid business plan.

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Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their finances. She has also been featured by Investopedia, Los Angeles Times, Money.com and other financial publications.

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How To Create a Business Plan for a Bank Loan [4 Key Steps]

Posted august 9, 2024 by kody wirth.

A detailed illustration of a locked money bag surrounded by dollar bills and keys, symbolizing securing a bank loan through a well-crafted business plan.

Wondering how to create a business plan that will wow your banker?

You’re not alone.

Aside from your loan application, your business plan is the main supporting document to help you get a business loan . Getting all the details just right is absolutely essential.

So here’s what we recommend: simplify the planning process by breaking the work up into manageable, bite–sized steps. That way, you can focus on one section at a time to ensure that your business plan is accurate and convincing.

Here’s a quick overview of the step–by–step process we guide entrepreneurs through when they sign up for LivePlan.

1. Outline the opportunity

This is the core of your business plan. It should give loan officers a clear understanding of:

  • What problem you’re solving
  • How your product or service fits into the current market
  • What sets your business apart from the competition

There are three key parts to this step:

The problem and your solution

Detail exactly what problem you are solving for your customers. How do their lives improve after you solve that “pain point” for them?

Be sure to describe your solution in vivid detail. For example, if the problem is that parking downtown is expensive and hard to find, your solution might be a bike rental service with designated pickup and dropoff locations.

If you’re just starting, we recommend actually going out and talking with your customers first. That way, you can prove you’re solving a real problem for your intended audience.

how to write up a business plan for a bank loan

Target market

Who exactly are you selling to? And roughly how many of them are there?

This is crucial information for determining whether or not your business will succeed long–term. Never assume that your target market is “everyone.” You need to break down the total market into a realistic number of sales based on your business’s capabilities.

For example, it would be easy for a barber shop to target everyone who needs a haircut. But most likely, it will need to focus on a specific market segment to reach its full business potential. This might include catering to children and families, seniors, or business professionals.

Competition

Who are your direct competitors ? These are companies that provide similar solutions that aim to solve your customers’ pain points.

Then outline what your competitive advantages are. Why should your target market choose you over other products or services?

Do you think you have no competition? Think again. Your customers are likely turning to an indirect competitor who is solving their problem with a different type of solution.

For example, a taco stand might compete directly with another taco stand but indirectly with a nearby hot dog vendor.

2. Show how you’ll execute

This is where the action happens! 

Here you’ll get into the details of how you’ll take advantage of the opportunity you outlined in the previous section. This part demonstrates to banks that you have a strong plan to achieve success.

The three main components of this step include:

Marketing and sales plan

There can be a lot of moving parts to this one, depending on your business model.

But most importantly, you’ll need to fully explain how you plan to reach your target market and convert those people into customers. 

Here are a few examples of what to include:

  • Positioning strategy: What makes your business both unique and highly desirable to your target market?
  • Marketing activities: Will you advertise with billboards, online ads or something else entirely?
  • Pricing: The price you charge must reflect consumer demand. There are several pricing models to choose from, including ‘cost–plus pricing’ and ‘value pricing.’

This is the nuts and bolts of your business. It’s especially important for brick–and–mortar companies that operate a storefront or have a warehouse. You may want to explain why your location is important or how much space you have available. 

Plan to work at home? You can also cover your office space, how this positively impacts your expenses, and if you have any plans to move outside your house.

If you use any specialized software, equipment, or tools be sure to mention them here as well.

Milestones and metrics

Lenders and investors want to be confident that you know how to turn your business plans into financial success. That’s where your milestones come in.

These are planned goals that help you progress your company. For example, if you’re launching a new product your milestones may include completing prototypes and figuring out manufacturing.

Metrics are how you will gauge the success of your business. 

Do you want to generate a certain level of sales? Or keep costs at a certain level? Figuring out which metrics are most important and then tracking them is essential for growth.

3. Detail your financial plan

This is the most crucial – and intimidating – part of any business plan for a bank loan. 

Your prospective lender will look especially close at your financial performance and financial forecasts to determine how likely your business is to succeed.

Ideally, you’re already tracking your finances and have at least dabbled with forecasting. However, if you’re starting from scratch, break your financial planning into the following smaller pieces:

Simply put, these are your projections for your business finances. It gives you (and the bank) an idea of how much profit your company stands to make. Just a few items you’ll need to include:

  • Sales forecast : List all your products, services, and any other ways your business will generate revenue. If you have direct costs, or expenses required to make what you sell, consider adding them as a percentage of your revenue.
  • Personnel forecast : Salaries and expenses related to what you pay yourself, employees, and any contractors.
  • Expense forecast : Things like rent, utilities, marketing costs, and any other regular expenses.

How much and how will you use any investments, loans, or other financing to grow your business? This might include paying for capital expenses like equipment or hiring personnel. 

Explain where the money will go, and if possible, create a forecast scenario showing the use and repayment of the loan. Also detail where all your financing is coming from. Lines of credit, loans, or personal savings should be listed here alongside the loan you’re applying for.

Bankers will be giving this section a lot of attention. Here’s what you’ll need:

  • Profit & Loss : This statement pulls in numbers from your sales forecast and other elements to show whether you’re making or losing money.
  • Balance Sheet : This is likely the first thing a loan officer will look at. It covers your liability, capital, and assets and provides an overview of your business’s financial soundness.
  • Cash Flow Statement : Essentially, this statement tracks how much money you have in the bank at any given point. Loan officers will likely expect realistic monthly cash flow for at least 12 months.

4. Summarize your business information

The executive summary is the first section of your business plan, but we recommend you tackle it last.

It’s an introduction to your company and summarizes the main points of your plan. While lenders will need to review your full business plan, they may use the executive summary as a quick way to determine whether your business is worth their time.

It may be your only chance to get the lender excited about your business. So, keep it to just one or two pages and be as clear and concise as possible. 

What to check before submitting your business plan to the bank

Before you finish your loan application and send in all your paperwork, be sure to review the following in your business plan:

  • Did you complete every section? Business plans have a fairly standard outline that lenders expect to see. It might sound simple, but make sure that you don’t leave a section blank by mistake. If you want to verify that everything is correct, consider using a business plan builder that uses an investor-approved outline.
  • Have you completed your full financial plan? Having detailed financials is expected. Your historical performance and financial forecasts tell the story of your growth path through numbers. Be sure that all of your financial documents are included and accurate. To go above and beyond, be sure to include the assumptions behind your financials and any financial scenarios you’ve been exploring.
  • Is your plan concise? No one has time to read a 50-page business plan, and you probably don’t want to write one. Keep every section of your business plan to-the-point, and be sure to populate your executive summary. If something should be included but adds unnecessary complexity to your plan, go ahead and add it to your appendix.
  • Did you pay attention to spelling, grammar, and punctuation? Small things really do make a difference, so dot those i’s and cross those t’s. If you can, have someone else review your business plan to catch any errors you may have missed. For another review, consider using an AI business plan generator to check your grammar and even rewrite sections to sound more professional.
  • Is your plan realistic? Make sure your calculations, goals, and predictions are practical, and that you back-up your plan with good market research. Also, double-check that sections of your business plan don’t contradict one another.

If you need help writing your plan

Getting a business loan isn’t easy. According to Federal Reserve Data , only 31% of businesses receive the total amount of financing they request.

Having a well-written business plan for your bank loan can go a long way toward you being among the businesses that do get the funding they ask for.

Not everyone feels confident writing a business plan themselves, especially if it’s needed to secure a bank loan. While you don’t need an MBA to write one, getting your business plan right often does require quite a bit of work. 

So if you need help writing your plan, here are a few options to consider:

  • Download a free business plan template : Start with an expert-designed template formatted to meet lender expectations.
  • Check out our guide on writing a detailed business plan : Dig deeper into what to include in every section of your business plan.
  • Hire a professional business plan writer to do it for you: This is typically the most expensive route, but worth it if you’re pursuing $100,000 or more in capital.
  • Sign up for LivePlan : It’s business planning software that provides a step–by–step process for writing any type of plan. It’s an affordable option that also gives you an easy way to track your actuals against your business plan, so you can get the insights you need to grow faster.

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Kody Wirth

Posted in Loans & Funding

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How to Write a Business Plan for a Loan

How to secure business financing

Matt Webber is an experienced personal finance writer, researcher, and editor. He has published widely on personal finance, marketing, and the impact of technology on contemporary arts and culture.

how to write up a business plan for a bank loan

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A business plan is a document that explains what a company’s objectives are and how it will achieve them. It contains a road map for the company from a marketing, financial, and operational standpoint. Some business plans are more detailed than others, but they are used by all types of businesses, from large, established companies to small startups.

If you are applying for a business loan , your lender may want to see your business plan. Your plan can prove that you understand your market and your business model and that you are realistic about your goals. Even if you don’t need a business plan to apply for a loan, writing one can improve your chances of securing finance.

Key Takeaways

  • Many lenders will require you to write a business plan to support your loan application.
  • Though every business plan is different, there are a number of sections that appear in every business plan.
  • A good business plan will define your company’s strategic priorities for the coming years and explain how you will try to achieve growth.
  • Lenders will assess your plan against the “five Cs”: character, capacity, capital, conditions, and collateral.

There are many reasons why all businesses should have a business plan . A business plan can improve the way that your company operates, but a well-written plan is also invaluable for attracting investment.

On an operational level, a well-written business plan has several advantages. A good plan will explain how a company is going to develop over time and will lay out the risks and contingencies that it may encounter along the way.

A business plan can act as a valuable strategic guide, reminding executives of their long-term goals amid the chaos of day-to-day business. It also allows businesses to measure their own success—without a plan, it can be difficult to determine whether a business is moving in the right direction.

A business plan is also valuable when it comes to dealing with external organizations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they’ll provide capital to new businesses.

Even if a business is well-established, lenders may want to see a solid business plan before providing financing. Lenders want to reduce their risk, so they want to see that a business has a serious and realistic plan in place to generate income and repay the loan.

Every business is different, and so is every business plan. Nevertheless, most business plans contain a number of generic sections. Common sections are: executive summary, company overview, products and services, market analysis, marketing and sales plan, operational plan, and management team. If you are applying for a loan, you should also include a funding request and financial statements.

Let’s look at each section in more detail.

Executive Summary

The executive summary is a summary of the information in the rest of your business plan, but it’s also where you can create interest in your business.

You should include basic information about your business, including what you do, where you are based, your products, and how long you’ve been in business. You can also mention what inspired you to start your business, your key successes so far, and your growth plans.

Company Overview

In this section, focus on the core strengths of your business, the problem you want to solve, and how you plan to address it.

Here, you should also mention any key advantages that your business has over your competitors, whether this is operating in a new market or a unique approach to an existing one. You should also include key statistics in this section, such as your annual turnover and number of employees.

Products and Services

In this section, provide some details of what you sell. A lender doesn’t need to know all the technical details of your products but will want to see that they are desirable.

You can also include information on how you make your products, or how you provide your services. This information will be useful to a lender if you are looking for financing to grow your business.

Market Analysis

A market analysis is a core section of your business plan. Here, you need to demonstrate that you understand the market you are operating in, and how you are different from your competitors. If you can find statistics on your market, and particularly on how it is projected to grow over the next few years, put them in this section.

Marketing and Sales Plan

Your marketing and sales plan gives details on what kind of new customers you are looking to attract, and how you are going to connect with them. This section should contain your sales goals and link these to marketing or advertising that you are planning.

If you are looking to expand into a new market, or to reach customers that you haven’t before, you should explain the risks and opportunities of doing so.

Operational Plan

This section explains the basic requirements of running your business on a day-to-day basis. Your exact requirements will vary depending on the type of business you run, but be as specific as possible.

If you need to rent office space, for example, you should include the cost in your operational plan. You should also include the cost of staff, equipment, and any raw materials required to run your business.

Management Team

The management team section is one of the most important sections in your business plan if you are applying for a loan. Your lender will want reassurance that you have a skilled, experienced, competent, and reliable senior management team in place.

Even if you have a small team, you should explain what makes each person qualified for their position. If you have a large team, you should include an organizational chart to explain how your team is structured.

Funding Request

If you are applying for a loan, you should add a funding request. This is where you explain how much money you are looking to borrow, and explain in detail how you are going to use it.

The most important part of the funding-request section is to explain how the loan you are asking for would improve the profitability of your business, and therefore allow you to repay your loan.

Financial Statements

Most lenders will also ask you to provide evidence of your business finances as part of your application. Graphs and charts are often a useful addition to this section, because they allow your lender to understand your finances at a glance.

The overall goal of providing financial statements is to show that your business is profitable and stable. Include three to five years of income statements, cash flow statements, and balance sheets. It can also be useful to provide further analysis, as well as projections of how your business will grow in the coming years.

What Do Lenders Look for in a Business Plan?

Lenders want to see that your business is stable, that you understand the market you are operating in, and that you have realistic plans for growth.

Your lender will base their decision on what are known as the “five Cs.” These are:

  • Character : You can stress your good character in your executive summary, company overview, and your management team section.
  • Capacity : This is, essentially, your ability to repay the loan. Your lender will look at your growth plans, your funding request, and your financial statements in order to assess this.
  • Capital : This is the amount of money you already have in your business. The larger and more established your business is, the more likely you are to be approved for finance, so highlight your capital throughout your business plan.
  • Conditions : Conditions refer to market conditions. In your market analysis, you should be able to prove that your business is well-positioned in relation to your target market and competitors.
  • Collateral : Depending on your loan, you may be asked to provide collateral , so you should provide information on the assets you own in your operational plan.

How Long Does It Take to Write a Business Plan?

The length of time it takes to write a business plan depends on your business, but you should take your time to ensure it is thorough and correct. A business plan has advantages beyond applying for a loan, providing a strategic focus for your business.

What Should You Avoid When Writing a Business Plan?

The most common mistake that business owners make when writing a business plan is to be unrealistic about their growth potential. Your lender is likely to spot overly optimistic growth projections, so try to keep it reasonable.

Should I Hire Someone to Write a Business Plan for My Business?

You can hire someone to write a business plan for your business, but it can often be better to write it yourself. You are likely to understand your business better than an external consultant.

Writing a business plan can benefit your business, whether you are applying for a loan or not. A good business plan can help you develop strategic priorities and stick to them. It describes how you are going to grow your business, which can be valuable to lenders, who will want to see that you are able to repay a loan that you are applying for.

U.S. Small Business Administration. “ Write Your Business Plan .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Fund Your Business .”

Navy Federal Credit Union. “ The 5 Cs of Credit .”

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  • Mar 30, 2023

The Ultimate Guide to Writing a Business Plan for a Loan: A Step-by-Step Walk-Through

how to write up a business plan for a bank loan

The Ultimate Guide to Writing a Business Plan for a Loan: A Step-by-Step Walkthrough

As a business plan specialist and expert business planner, I'm here to guide you through the process of writing a comprehensive business plan for securing a loan. Whether you're a start-up or an established business looking to expand, a well-crafted business plan is essential for impressing potential lenders and securing the funding you need.

In this extensive, 5,000-word article, I'll cover everything you need to know about creating a top-notch business plan that will boost your chances of loan approval. We'll go through each section in detail, providing you with practical examples and tips to optimize your plan for success. So, let's get started!

Executive Summary

The executive summary is the first and most critical section of your business plan. It's a brief overview of your entire plan, highlighting the key points and giving readers an insight into your business.

Key elements to include in your executive summary:

Business concept: Briefly explain your business idea, the products or services you plan to offer, and the target market.

Company overview: Provide essential information about your company, including its legal structure, location, and mission statement.

Management team: Showcase the expertise and experience of your management team, emphasizing their ability to lead the business.

Market opportunity: Describe the market demand, trends, and target audience, highlighting the opportunity for your business to succeed.

Financial highlights: Summarize your financial projections, including sales, profits, and cash flow.

Loan purpose: Clearly state the purpose of the loan and the amount you're seeking.

Remember, the executive summary is often the first thing lenders read, so make it engaging and informative to grab their attention.

Company Description

The company description section is where you provide a more in-depth look at your business. It should give readers a clear understanding of your company's purpose, goals, and competitive advantages.

Key elements to include in your company description:

Business history: If your company has an existing history, briefly describe its origins and milestones achieved.

Mission statement: Articulate the purpose of your company and the value you aim to provide to customers.

Objectives: Outline the specific goals you want to achieve with your business, both short-term and long-term.

Products and services: Provide a detailed description of the products or services you plan to offer, emphasizing the benefits they provide to customers.

Target market: Identify your target audience, specifying their demographics, psychographics, and buying habits.

Competitive advantage: Explain what sets your business apart from the competition and how you plan to maintain this edge.

Market Analysis

The market analysis section demonstrates your understanding of the industry, market, and competition. It's crucial to show lenders that you've done your homework and have a comprehensive understanding of the market landscape.

Key elements to include in your market analysis:

Industry overview: Provide a high-level view of your industry, including its size, growth trends, and key players.

Market segmentation: Break down your target market into smaller segments, identifying their unique needs and preferences.

Target market characteristics: Describe the specific characteristics of your target market, such as demographics, psychographics, and geographic location.

Market demand: Present evidence of market demand, using data on customer needs, market trends, and buying behaviors.

Competitor analysis: Evaluate your main competitors, analyzing their strengths, weaknesses, and market share.

SWOT analysis: Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to assess your business's position in the market.

Marketing and Sales Strategy

In this section, outline your marketing and sales strategy to show lenders how you plan to attract and retain customers, as well as generate revenue. A well-defined marketing and sales strategy is crucial to demonstrate that you have a clear plan for growth and profitability.

Key elements to include in your marketing and sales strategy:

Marketing objectives: Define your marketing goals, such as brand awareness, lead generation, or customer retention.

Target audience: Reiterate your target market, emphasizing their needs and preferences.

Unique selling proposition (USP): Highlight your USP, the main reason customers should choose your products or services over the competition.

Marketing channels: Identify the marketing channels you plan to use, such as social media, email, content marketing, or paid advertising. Explain the rationale behind your choice of channels and how they align with your target audience.

Sales process: Describe your sales process, from lead generation to closing deals. Include details on your sales team structure, training, and compensation plans.

Key performance indicators (KPIs): List the KPIs you'll use to measure the success of your marketing and sales efforts, such as conversion rates, average deal size, or customer lifetime value.

Operations Plan

The operations plan section details the day-to-day activities required to run your business. It shows lenders that you have a clear understanding of the operational aspects of your company and the resources needed to support your growth.

Key elements to include in your operations plan:

Facilities: Describe your business's physical location, including its size, layout, and any equipment or machinery required.

Production process: If applicable, detail your production process, including the steps involved, quality control measures, and production capacity.

Supply chain: Outline your supply chain, identifying key suppliers, procurement processes, and inventory management practices.

Staffing: Explain your staffing requirements, including the roles, responsibilities, and qualifications of each team member.

Management structure: Provide an organizational chart, showcasing your company's management structure and reporting lines.

Legal and regulatory requirements: Identify any relevant legal or regulatory requirements, such as licenses, permits, or certifications needed to operate your business.

Financial Plan

The financial plan is arguably the most crucial section of your business plan when applying for a loan. It demonstrates your ability to manage finances, make informed decisions, and, ultimately, repay the loan.

Key elements to include in your financial plan:

Revenue projections: Estimate your future sales, breaking them down by product or service category and showing growth rates over time.

Expense projections: Forecast your expenses, including fixed costs (e.g., rent, utilities) and variable costs (e.g., marketing, salaries).

Cash flow statement: Provide a detailed cash flow statement, showing how cash will flow in and out of your business over a specified period (typically 12 months).

Profit and loss statement: Create a profit and loss statement that projects your business's profitability over time.

Balance sheet: Prepare a balance sheet that showcases your business's assets, liabilities, and equity.

Break-even analysis: Calculate the point at which your business will break even, meaning your revenues equal your expenses.

Loan repayment schedule: Detail your proposed loan repayment schedule, including the loan amount, interest rate, repayment terms, and projected date of full repayment.

The appendices section is where you can include any additional documents or supporting materials that are relevant to your business plan. These documents may provide further evidence of your company's viability and help strengthen your case for securing a loan.

Examples of items to include in the appendices:

Resumes of key team members

Product samples or prototypes

Market research data or surveys

Letters of intent or contracts with suppliers, partners, or customers

Intellectual property documentation, such as patents, trademarks, or copyrights

Relevant licenses, permits, or certifications

Writing a comprehensive business plan for a loan can seem like a daunting task, but with the right approach and guidance, it's an achievable goal. By following the step-by-step instructions outlined in this article, you can create a well-structured, persuasive business plan that will greatly improve your chances of securing the funding you need. Remember to:

Pay close attention to your executive summary, as it sets the tone for the entire plan.

Be thorough and detailed in your market analysis, showing a deep understanding of your industry and target audience.

Develop a solid marketing and sales strategy to demonstrate your ability to attract and retain customers.

Address the operational aspects of your business, including staffing, facilities, and supply chain management.

Present a robust financial plan, complete with projections and a loan repayment schedule.

By doing so, you'll showcase your expertise, commitment, and preparedness to potential lenders, significantly increasing the likelihood of obtaining the loan your business needs to grow and succeed.

In addition to following the steps outlined in this guide, consider seeking professional assistance from a business plan consultant or specialist to review and refine your plan. Their expertise can help you identify any areas that may need improvement and ensure that your business plan is optimized for success.

Finally, remember to continuously update your business plan as your business evolves. Regular updates will ensure that your plan remains relevant and accurate, providing you with a valuable roadmap for your business's future growth and development.

With dedication, persistence, and a well-crafted business plan, you can secure the funding you need to bring your business vision to life. Good luck, and here's to your success!

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How to Write a Professional Business Plan for a Loan

Business Plan Template

Business Plan Template

  • March 27, 2024

11 Min Read

how to make business plan for loan

So, are you thinking of getting a loan or funding to start an exciting business journey?

That’s great! But before you go any further, it’s very important to have a solid business plan in place.

Well, we understand that creating a successful plan for a loan can be a daunting task. That’s why we’re here to help you!

This investment-ready business plan template for loans will help you include all the essential elements in your plan, from summarizing your business concept to projecting the financial data. It not only impresses business loan lenders but also sets the stage for success.

Ready to get started? Let’s first understand how business plans will help you with loan proposals.

How business plans help in loan applications?

A business plan is a professional document that serves as a written loan proposal if you want to secure a loan for capital investment. It details every aspect of your business, including its concept, goals, market opportunity, and financial data.

Whether you’re a new entrepreneur or a small business owner, you’ll need a well-prepared business plan. It helps you persuade potential investors or lenders of its viability and potential for success.

Here are a few primary reasons why business plans are necessary in loan applications:

It helps you showcase your vision

A well-written business plan communicates your business vision effectively and allows you to demonstrate your clarity of purpose and strategic direction. It offers lenders a compelling narrative of what your business is aimed for and how it will achieve its goals.

It helps you prove your financial feasibility

Well, lenders need assurance that they’re making a wise investment. A detailed business plan presents them with realistic financial projections, along with how your business will earn money and repay the loan. This infuses confidence in lenders and convinces them that your business is a safe bet.

It helps you mitigate potential risks

Once you start your business, it naturally involves fair enough risks. However, a good business plan clarifies that you’re aware of those challenges and have backup plans or strategies to mitigate them. This shows lenders that you’ve considered different situations and keep contingency plans in place.

It helps you demonstrate your preparedness

A business plan shows lenders that you’ve carefully outlined every aspect of your business—from conducting market analysis to predicting finances. It assures that you’re serious about your business and well-prepared to manage the ups and downs of starting a business.

In short, having a solid business plan can be the cornerstone of a successful loan application that explains your business idea and how you plan to utilize the loan money to get started.

Now that you know how business plans help in a loan application, it’s time to check out and understand the key elements of a business plan for a loan template.

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how to write up a business plan for a bank loan

Key components of a successful business plan for a loan

1. executive summary.

An executive summary is the first section of the plan, providing a concise overview of the entire business plan.

Generally, it is written in the last, as it summarizes the most important components you mentioned in your plan.

Since the potential investors or lenders would read this section first, make sure that you keep it simple, crisp, and compelling to build their confidence in your business. Also, it should not be more than 1 or 2 pages.

You may write your executive summary with a precise explanation of your business concept, the type of business you operate, and its status.

Here are a few primary elements you must add to your summary:

  • Your company’s mission statement
  • The product or service you intend to offer
  • Market Opportunity
  • Management team’s background and experience
  • Growth plans or long-term objectives
  • Financial projections and funding needs

2. Company Overview

As you’ll give a brief introduction in the executive summary, this chapter will expand on it, providing an in-depth understanding of your business.

Company description includes all the business-related facts, such as the startup concept, vision-mission statements, company location, etc. Also, it explains the problems or challenges you aim to solve.

In addition to that, consider answering a few questions that would help lenders to grasp the significance of your business:

  • What is the legal structure of your business?
  • Who is the business owner?
  • Do you have any business partners?
  • Why did you start this business, and when it was founded?
  • What are your business accomplishments to date?
  • Who will get benefits from your company’s product or service?

Note that the company overview section can be regarded as your extended elevator pitch.

So, it’s a good opportunity to present your business’s specific details and structural aspects that the financing partner needs to know.

3. Market Analysis

The market analysis section provides readers with a deep understanding of the specific industry or market in which you plan to serve.

This seems unnecessary but serves different purposes. Those who are looking to fund a franchise business should do some serious work for this section, as lenders will review it very closely.

To carefully draft this section, you should conduct thorough market research and industry analysis to define your target customers, industry trends, market demand, and competitors.

This will demonstrate that you understand the market dynamics and validate the demand for your products or services.

Here are a few elements you should include in your market analysis section:

  • Ideal target market
  • Market size and growth potential
  • Customer segments
  • Competitive analysis
  • Emerging trends
  • Applicable government regulations

4. Product or Service Offerings

In this section, you may provide a detailed description of your products and service offerings, along with their features, benefits, and pricing structure.

It helps you highlight what your business offers to its ideal customers, how your offerings will satisfy their needs and explains the value proposition of your products or services.

You may consider including these points in the product or service section:

  • A brief description of your product & service
  • Pricing details
  • Intellectual property, copyright, and patent filings
  • Quality measures
  • Any additional offerings

5. Sales and Marketing Strategies

Your marketing and sales plan elucidates how you intend to market your products or services in greater detail. It helps you outline the marketing and sales strategies you’ll use to attract and retain potential customers.

The primary goal is to give a flexible and practical marketing and sales strategy that persuades the lenders you know how to advertise or develop a public relations campaign to reach the company’s revenue goals.

For a well-crafted marketing plan, you might consider adding the following details in your plan:

  • Your target audience and brand positioning
  • Detailed marketing strategy
  • Sales and marketing goals and KPIs
  • Sales and marketing budgets
  • Customer retention plan

While reviewing your loan application, lenders would like to know how you plan to make money and how you overcome marketing and sales challenges, so ensure that this strategy is always relevant.

6. Operations Plan

The operations plan section provides a clear picture of your company’s day-to-day operations and activities. It is a detailed-oriented section that outlines how you’ll manage to run your business smoothly.

Also, operational excellence is necessary to achieve your goals, satisfy client commitments, and maximize results. So, try to mention your operational intricacies and showcase efficient systems and processes.

Here are a list of details you must include in your operations plan:

  • Staffing & training
  • Operational processes
  • Inventory needs and supplies
  • facilities & technology
  • Regulatory compliance

By offering insights into these operational aspects, this section helps you instill confidence in lenders about your ability to effectively handle and grow your company.

7. Management Team

Your management team section introduces the key individuals who are responsible for driving your business ahead.

It helps lenders easily understand your team’s roles & responsibilities, educational qualifications, industry experience, and how you plan to compensate your leadership team.

Even this will assure lenders that your team is capable enough to navigate challenges, make informed decisions, and reach strategic objectives. Also, they feel confident giving you a loan—even if it’s your startup.

So, you may consider including the below information:

  • Company owner profile
  • Resume-styled summary of key executives
  • Organizational chart
  • Compensation plan
  • Details of advisory board members(if any)

8. Financial Plan

A well-written and comprehensive financial plan is one of the most crucial sections of your plan, as it helps you prove to lenders your business’s financial health, growth potential, and ability to repay the business loan.

So, your financial analysis must include the projected financial statements for three years or more. The following are the key financial projections that you should add:

  • Income statements
  • Cash flow statements
  • Capital expenditure budgets
  • Balance sheet
  • Break-even analysis
  • Funding requirements

As well as you should also list hard or soft collateral if you possess it so that you can put it up to get a loan. Even lenders may request to add more granular data(such as cost of sales or cost per product/service).

Note that if you’re a startup and don’t carry enough data to highlight, consider including estimated costs, revenue streams, and other strategic future projections you may have.

9. Appendix

The appendix is the last section of a professional business plan that typically provides supplementary information and other supporting documents the lender may need for better understanding.

You may include the following details in an appendix:

  • Business licenses and permits
  • Contractual agreements or other legal documents
  • Letters of reference
  • Credit histories and tax returns
  • Key managers’ resumes and certificates
  • Product photos

By adding these details, you offer more detailed explanations or validation for your business plan, strengthening your discussions and claims.

What factors do lenders look for in a business plan

When you submit a business plan to secure funding, lenders will analyze it to evaluate the viability and creditworthiness of your loan application. Here are several key factors they look for:

Character of your management team

Lenders will assess a business’ character that includes subjective or intangible qualities like whether its owners or key executives are perceived as honest, competent, or committed. Also, they consider educational background, industry experience, skills, leadership capabilities, and credit histories. This can be critical for evaluating prospects as most lenders don’t wish to lend to whom they don’t feel trustworthy.

Your capability to repay loans

Loan officers also spend a lot of time analyzing the borrower’s ability to repay the loan. They will thoroughly examine the financial statements such as projected revenue, expenses, cash flows, growth plans, and loan payments. Further, lenders analyze the financial history to see how much revenue you have generated or how much profit you have made in the past.

The capital amount you’re seeking

While reviewing loan applications, lenders will go through your financial information that highlights how much funding you’re seeking, how much cash you carry on hand, and how much debt you have. Also, they assess your personal financial investments as a sign of commitment and seriousness. So, make sure your business plan clearly outlines your investment amount and funding needs.

Collateral or personal guarantees

In some cases, lenders may request collateral or personal guarantees to secure the loan. Thus, you should document any assets or valuable items you can offer as collateral or additional security. Even lenders may still approve your loan without collateral if you have a good credit history and a reliable business plan.

By understanding these key considerations, you can prepare a business plan that resonates with the lender’s interests and concerns. Now, let’s move to a few business plan examples for a loan.

Business plan examples for a loan

When you’re just venturing into your entrepreneurship journey, crafting a comprehensive business plan for a loan application can be overwhelming.

So, try to consider some sample business plan templates or resources to get started on the first draft of your plan. Here are a few business plan examples that you may find helpful:

  • Sample business plan outline
  • Small business plan template
  • Comprehensive business plan writing
  • Business Plan Workbook for Loan Applications

Start preparing your business plan

Finally, you understand the importance and key elements of drafting a business plan for securing a loan or funding. But it requires some extra effort to find success down the road.

If you’re still confused about where to start, Upmetrics could be a great choice. It’s a modern business plan app that helps entrepreneurs or small business owners create an actionable plan quickly.

With Upmetrics, you’ll get easy-to-follow guides, a library of business plan templates , AI support, a financial forecasting tool, and other valuable resources to streamline your entire business planning approach.

So, don’t wait and start preparing your business plan for a loan!

Build your Business Plan Faster

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Frequently Asked Questions

Do i need a business plan to get a loan.

Of course, most lenders or financial institutes require a solid business plan, even if you are a well-established business. A well-crafted business plan helps you highlight every essential information about your business and demonstrate to lenders that you have a realistic plan in place to generate income and repay the loan.

Can I write a business plan myself?

Definitely, you can write a business plan by yourself. Also, you can get help from various resources available, including business plan templates and guides, to create a comprehensive plan. But, if you’re unsure or need assistance, you may consider having a business plan software or hiring a professional writer.

How long should my business plan be?

The length of your business plan should be concise and focused, typically depending on its purpose. A one-page business plan is a single-page document, a lean or mini business plan comprises 1–10 pages, while a comprehensive business plan can range from 15 to 35 pages and beyond.

What's the most important element of a loan-seeking business plan?

The financial plan is the most crucial element of a loan-seeking business plan, as lenders want to check realistic and well-structured financial forecasts that present your ability to repay the loan. Also, this section can make or break a lender’s confidence and willingness to raise capital.

What format should I use?

It’s essential to select a format that can effectively convey your business idea, strategy, and financial projections to the lenders. Following are a few common options to consider:

  • Traditional text-based document
  • PowerPoint or Keynote presentation deck
  • Executive summary or a pitch deck

So, whatever format you choose, it should align with your preferences, the lender requirements, and the complexity of your business.

About the Author

how to write up a business plan for a bank loan

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

Reach Your Goals with Accurate Planning

How to Write a Business Plan For a Loan

Securing a business loan is a critical step for many entrepreneurs aiming to start or expand their operations. Lenders and investors require a business plan before they will consider financing a business. A well-written business plan can improve your chances of getting funding and give you a competitive edge in a sea of entrepreneurs. 

In this guide, we will explore the steps involved in crafting an effective business plan tailored to secure a loan, offering essential tools, resources, and practical examples to help you succeed.

What is a Loan Business Plan?

A loan business plan is a comprehensive document that details your business’s objectives, strategies, financial health, and future projections. This type of business plan differs from others in that it specifically caters to the interests of financial lenders. 

Key elements such as profitability forecasts, risk management, and financial stability are emphasized to assure lenders of your ability to manage and repay the loan. Essentially, this plan serves as both a roadmap for your business’s future and a persuasive tool for securing financial backing.

Do You Need a Business Plan to Get a Loan?

Whether or not you need a business plan for financing depends on several factors, including the type of loan, the lender, and the amount of money you’re requesting. However, in many cases, having a well-prepared business plan is essential, particularly for small businesses and startups seeking significant funding. Here’s a closer look at when and why writing a business plan for a loan may be required for securing financing.

Importance of a Business Plan in Securing a Loan

Risk Assessment: Lenders use business plans to assess the risk involved in lending to a business. A comprehensive business plan to get a loan provides a detailed overview of your business’s structure, strategy, market, and financial health, which helps lenders make informed decisions.

Demonstrating Commitment and Preparation: A business plan for bank loan shows that you have put significant thought and effort into planning your business. This commitment is often viewed favorably by lenders, as it suggests that you are serious about your business’s success and are likely to be diligent in repaying the loan.

Clarifying Loan Utilization: Lenders require business owners to identify the purpose of the loan. A business plan that clearly outlines how the loan will be utilized (for expansion, equipment, inventory, etc.) can help assure lenders that the funds will be used responsibly and will contribute to the business’s growth.

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Essential Components of a Loan Business Plan

To effectively communicate your business’s potential and stability to lenders, it’s crucial to know how to make a business plan for a loan. Your business plan should include the following critical components:

Executive Summary

The executive summary acts as the introduction in creating business plan for a loan, providing a concise overview of the most important aspects. It should include your business name, location, a brief description of your business operations, and your mission statement. Crucially, this section should also detail the loan amount you are requesting and its purpose. This part sets the stage for the detailed explanation that follows in the rest of the document.

Company Description

In this section, dive into what your business does, the market needs it meets, and the customers it serves. Include details about your company’s legal structure, ownership, significant achievements, and the competitive edge your business possesses. This background information is essential to establishing the context for your business plan funding request.

Market Analysis

Conducting a thorough market analysis is a key component of business loan analysis. It shows lenders your deep understanding of the industry and your business’s positioning. Include details like demographic and psychographic data, market size, expected growth, and how your offerings meet market needs. Additionally, a competitive analysis of your rivals’ strengths and weaknesses highlights your business’s advantages in the marketplace.

Organization and Management

This section should outline your business’s organizational structure and introduce your management team, detailing their roles, backgrounds, and unique qualifications. Demonstrating the strength and expertise of your management team can reassure lenders that your business is under competent leadership.

Service or Product Line

Describe in detail the products or services your business offers. Explain how these offerings are produced, their benefits to customers, and their life cycle. Discuss any new products or services you plan to introduce and how they will contribute to your business’s growth.

Marketing and Sales Strategy

Articulate your strategies for attracting and retaining customers. This section should detail your marketing plans, sales tactics, and the channels you intend to use to reach your target audience. Clearly outlining how you will generate customer demand and convert it into sales is crucial for convincing lenders of your business’s revenue potential.

Funding Request

In your funding request, clearly state the amount you need and provide a brief explanation of why you are asking for the loan and what you plan to do with the money. Specify the type of loan you are seeking, the desired terms, and your preferred repayment plan. This detail helps lenders assess the feasibility of your request and understand how the funds will be used, enhancing the transparency and credibility of your business plan.

Financial Projections

Provide comprehensive financial projections to support your business plan funding request. Describe how you plan to use these funds, including projected income statements, balance sheets, cash flow statements, and capital expenditure budgets for the next three to five years. Ensure these projections are realistic and data-driven to demonstrate your business’s ability to repay the loan effectively.

What Lenders Look for in a Business Plan?

When writing a business proposal for funding, it’s crucial to understand the criteria lenders use to evaluate your application. Often referred to as the “Five Cs of Credit,” these criteria help lenders assess the risk associated with your business and determine your ability to repay the loan. Addressing each of these factors thoroughly in your bank loan proposal can greatly improve your chances of securing funding.

Character refers to the trustworthiness and reliability of the business owner and management team. Lenders assess character by looking at your personal credit history, industry experience, and references. This aspect of your business plan should highlight your professional background, achievements, and the expertise of your management team, underscoring your commitment to the business’s success.

Capacity is your business’s ability to repay the loan, which is primarily evaluated through your cash flow. Lenders will examine your past financial statements and your projected financials to ensure that your business generates enough cash flow to cover your existing expenses plus the new loan payments. This section should include detailed, realistic financial forecasts and a solid explanation of how these projections align with your business’s operational plans.

Capital pertains to the money you have invested in your business. Lenders want to see that you have skin in the game. The more of your own money that is invested in the business, the less likely you are to walk away from it. Include information about your personal investment and the equity within the business. This demonstrates your commitment to the business and reduces the risk for the lender.

Conditions refer to both the internal and external factors that might affect your business. Internally, this could include your business’s organization, product line, and marketing strategy. Externally, it encompasses market conditions, industry trends, and the economic environment. Your business plan should discuss how these conditions impact your business and what steps you will take to mitigate risks associated with unfavorable conditions.

Collateral is any asset that you can offer to secure the loan, which the lender can seize if you fail to repay the debt. While not all business loans require collateral, providing it can help secure better terms or a larger loan amount. Detail any assets that could serve as collateral in your business plan, including real estate, equipment, or inventory.

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How to Present a Business Plan to a Bank?

Presentation is key when approaching a bank with your business plan for loan application. Prepare thoroughly, understanding every detail of your plan and being ready to answer in-depth questions. Present your business loan proposal neatly and professionally, and maintain a confident, concise delivery. This professionalism shows that you are serious and well-prepared, which can be just as important as the content of your business plan.

Tools and Resources for Crafting a Business Plan

Creating a compelling bank loan business plan is essential, especially when applying for startup loans or presenting to a lender. To streamline the process and enhance the quality of your business plan, consider leveraging the following tools and resources:

Software Solutions

Software solutions like LivePlan , Bizplan , and Enloop are designed to simplify the process of creating a detailed business plan. These tools offer:

  • Guided Instructions: Step-by-step guides that help you build each section of your business plan, ensuring all critical elements are covered.
  • Financial Projections Tools: Automated tools to help calculate financial forecasts, which are crucial for start up loans and bank loans.
  • Customizable Templates: Specific templates that can be tailored to the needs of different industries and funding scenarios, such as a business plan for a bank loan example or a startup loan application.

These software options are especially beneficial for those who are new to writing business plans, as they help draft a business plan, structure your thoughts, and ensure your document meets lender expectations.

Websites like SCORE , GrowThink and Bplans provide a wealth of free resources that can be particularly useful when crafting your business plan for loan:

  • Sample Business Plan For Bank Loan PDF : This PDF is designed to cater to the unique requirements of different sectors, providing a solid starting point that you can adapt to your specific business scenario.
  • Business Plan for Bank Loan Example: Access to sample business plans that succeeded in securing bank loans can give you insights into what banks are particularly attentive to.
  • Business Plan Template for Bank Loan: Specific templates designed to meet the criteria and expectations of banks, which can be incredibly helpful in structuring your document properly.

Utilizing these templates can save time and ensure your plan aligns with industry standards, enhancing your credibility with potential lenders.

Professional Consultants

For those who prefer a more personalized approach or need expert advice, hiring a professional business plan writer or consultant can be a wise investment:

  • Tailored Expertise: Consultants bring specific knowledge of what lenders look for in a business plan, especially important when applying for startup loans where there is no business history to leverage.
  • Critical Review and Feedback: An experienced consultant can provide critical feedback, helping refine your plan’s messaging to ensure it resonates with bank officers and loan committees.
  • Industry Insights: Consultants often bring deep industry insights that can enrich your market analysis and competitive landscape sections, strengthening the overall persuasive power of your business plan for a bank loan. 

Whether you’re drafting your first funding business plan or refining one for a crucial bank loan, these tools and resources can dramatically increase your efficiency and effectiveness. By carefully selecting the right aids, you ensure your business plan is not only comprehensive but also compelling enough to secure the needed funding.

A well-crafted business plan is crucial for securing a business loan. It not only demonstrates your commitment and understanding of the market but also reassures lenders of your ability to manage financial responsibilities. Incorporating essential components like a detailed executive summary, comprehensive market analysis, and robust financial projections, alongside addressing the “Five Cs of Credit,” significantly strengthens your loan application.

Presenting your business plan with confidence and professionalism is equally important. Leveraging tools such as business plan software, templates, or engaging professional consultants can enhance your plan’s effectiveness. With thorough preparation and a strategic approach, you can increase your chances of obtaining the necessary funding to advance your business goals.

Crafting Winning Business Plans for Your Loan Success

To enhance your prospects of successfully securing a business loan , consider utilizing the professional business plan services offered by BSBCON . Our skilled consultants are adept at asking the right questions to ensure that the information collected from you is consistently represented throughout your plan. We conduct thorough external research to substantiate your assumptions and financial projections. 

Our team is committed to ensuring that your business plan for funding adheres to all the criteria set forth by banks. Moreover, we deliver your tailored business plan in a professional and visually appealing format, reinforcing the strong and successful image you wish to portray for your business.

For a detailed quote on a professionally crafted, winning business plan that can help you secure your bank loan, contact us today.

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how to write up a business plan for a bank loan

How to Write a Business Plan for a Loan

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Business plan 101.

Introduction

Securing a loan for your business can be a game-changer, providing the capital needed to start, expand, or stabilize operations. But to get that loan, you’ll need a compelling business plan that convinces lenders of your business’s potential and reliability. In this comprehensive guide, we’ll walk you through the process of crafting a winning business plan tailored for loan approval. Whether you’re a startup seeking initial fund raising or an established business in need of financial support, these steps will help you create a roadmap for success.

Understanding Your Business Needs

Determining the Purpose of the Loan

Before diving into the intricacies of your business plan, you must first understand the purpose of the loan. Be specific about why you need financing. Is it for startup capital, expansion, working capital, or a particular project? Identifying the exact purpose sets the foundation for the rest of your plan.

Assessing How Much Capital Is Required

Once you’ve pinpointed the purpose, assess how much capital is needed to achieve your goals. This calculation should include both the immediate requirements and any contingencies. Accurate financial projections play a crucial role in this step.

Identifying the Specific Uses of the Loan Funds

In your business plan, clearly outline how the loan funds will be used. Break down the allocation of funds, whether it’s for equipment purchase, hiring staff, marketing efforts, or debt consolidation. Providing this level of detail demonstrates your financial prudence.

Executive Summary

The executive summary is your opportunity to make a powerful first impression on lenders. This concise section should encapsulate your business’s essence and your loan request.

Crafting a Concise Overview

Begin with a succinct overview of your business, including its mission and a brief description. Clearly state the loan amount you’re seeking and the purpose of the loan. Remember, lenders often use the executive summary as a screening tool, so make it engaging and compelling.

Key Components of an Effective Executive Summary

A well-crafted executive summary includes vital information, such as your business’s history, its growth potential, financial highlights, and the qualifications of your management team. Each sentence should serve the purpose of convincing lenders to read further.

Capturing the Lender’s Attention

Your executive summary should be compelling enough to make lenders want to learn more about your business. Craft it carefully, as it’s the first thing they’ll see. Make sure it hooks them right from the start.

Business Description

In this section, provide an in-depth look at your business.

Providing an In-Depth Look at Your Business

Start by offering insights into your business’s history, its legal structure, location, and ownership. Highlight any unique achievements, milestones, or recognition your business has received.

Discussing Your Industry, Market, and Target Audience

Delve into your industry and market. Share your market research findings, including industry trends, market size, and demographics of your target audience. Showcase your understanding of the competitive landscape.

Explaining Your Business’s Unique Value Proposition

Clearly articulate what sets your business apart from competitors. Explain how your products or services fulfill a specific need or solve a problem for your target customers. Emphasize your unique value proposition.

Market Analysis

This section requires thorough market research and analysis.

Conducting Thorough Market Research

Explain the methods and sources you used to gather market data. This could include surveys, industry reports, or competitor analysis. Cite relevant statistics and sources to support your claims.

Analyzing Industry Trends and Competition

Interpret the data you’ve collected. Identify opportunities, threats, and gaps in the market. Discuss how your business plans to capitalize on these insights. Provide a detailed analysis of your competitors, highlighting their strengths and weaknesses.

Demonstrating a Solid Understanding of Your Market

Summarize your market analysis by showcasing key insights. Discuss the growth potential of your industry, significant challenges, and your business’s positioning within this landscape. Use data and statistics to support your arguments.

Organization and Management

This section introduces your business’s structure and team.

Detailing Your Company’s Structure

Provide an organizational chart or a description of how your business is structured. Explain the hierarchy, roles, and reporting relationships within your organization.

Introducing Key Team Members and Their Roles

Highlight the qualifications, experiences, and contributions of your management team. Explain why they are well-equipped to drive the business forward. Include resumes or profiles as appendices.

Highlighting Your Team’s Qualifications

Emphasize the educational backgrounds, relevant industry experience, and any notable achievements of your team members. This builds credibility and trust with lenders.

Products or Services

This section focuses on what your business offers.

Describing Your Offerings

Provide a detailed description of your products or services. Explain their features, benefits, and pricing structures. Use clear and concise language to ensure lenders understand what you offer.

Emphasizing the Benefits to Customers

Articulate how your offerings solve problems or fulfill needs for your customers. Highlight the unique selling points that make your products or services attractive.

Discussing Product/Service Development and Innovation

If applicable, discuss your plans for product or service development and innovation. Show that you’re forward-thinking and prepared to adapt to changing market demands.

Marketing and Sales Strategy

This section outlines your approach to reaching and retaining customers.

Outlining Your Marketing Plan

Explain your marketing strategies, including digital marketing, traditional advertising, public relations, and social media. Discuss how you plan to raise brand awareness and attract potential customers.

Defining Your Sales Strategy and Channels

Detail your sales strategy. Describe the channels you’ll use to reach your target audience. Discuss your sales team’s role if you have one. Explain how you intend to convert leads into customers.

Demonstrating How You’ll Attract and Retain Customers

Elaborate on your customer acquisition strategies and retention efforts. Discuss loyalty programs, customer relationship management, or any other initiatives aimed at ensuring customer satisfaction and repeat business.

Funding Request

In this section, specify the loan amount you’re seeking and how you plan to use it.

Specifying the Loan Amount You’re Seeking

Clearly state the exact amount of funding you’re requesting. Explain why this amount is necessary to achieve your business objectives.

Explaining How the Funds Will Be Used

Provide a breakdown of how the loan funds will be allocated. Be specific about which aspects of your business will benefit from this investment. This level of transparency demonstrates responsible financial planning.

Providing a Clear Repayment Plan

Discuss the terms of loan repayment, including interest rates, repayment periods, and any collateral you’re offering as security. Lenders want assurance that their investment will be repaid on schedule.

Financial Projections

This section focuses on creating realistic financial forecasts.

Creating Realistic Financial Forecasts

Explain the process of developing financial projections. This includes sales forecasts, income statements, balance sheets, and cash flow projections. Stress the importance of basing these projections on thorough research and realistic assumptions.

Including Income Statements, Balance Sheets, and Cash Flow Projections

Provide samples of these financial statements, highlighting key metrics such as revenue, expenses, assets, liabilities, and cash flow. Explain the significance of each statement in assessing your business’s financial health.

Discussing Your Assumptions and Methodology

Transparently present the assumptions that underlie your financial projections. Discuss the methodology you used to arrive at these numbers. Lenders need to trust the accuracy and reliability of your financial data.

Risk Assessment

Identify potential risks and demonstrate your strategies for mitigating them.

Identifying Potential Risks and Challenges

Discuss the major risks your business may face, whether they’re industry-specific, economic, or internal. Lenders appreciate your candid assessment of potential pitfalls.

Demonstrating Your Risk Mitigation Strategies

Outline concrete steps you’ll take to mitigate the identified risks. This reassures lenders that their investment is protected and that you have contingency plans in place.

Reassuring Lenders of Your Ability to Handle Adversity

Emphasize your business’s resilience by sharing past experiences of successfully navigating challenges. Highlight your ability to adapt and thrive even in adverse conditions.

Include supplementary documents and data to support your business plan.

Including Supplementary Documents and Data

List the additional documents that support your business plan. These might include resumes of key team members, market research data, legal documents, or letters of recommendation. Provide context for why each document is included.

Examples Might Include Resumes, Market Research, or Additional Financial Information

Offer examples of what these supplementary documents might look like and how they strengthen your case. Show that you’ve done your due diligence in preparing a comprehensive plan.

Tips for a Successful Loan Application

In this section, offer practical advice on presenting your plan.

Offering Practical Advice on Presenting Your Plan

Share tips on creating a visually appealing and well-organized document. Discuss formatting and design considerations, ensuring that your business plan is easy to navigate.

Discussing Common Mistakes to Avoid

Highlight common pitfalls that applicants should steer clear of, such as overestimating sales projections or downplaying risks. Addressing these mistakes proactively can enhance your credibility.

Highlighting the Importance of Preparation

Stress the value of meticulous preparation. Encourage applicants to double-check financial data, rehearse their presentations, and seek feedback from mentors or advisors.

In conclusion, crafting a business plan for a loan is a strategic endeavor that can significantly impact your business’s future. It’s not merely a document; it’s your roadmap to success and a testament to your commitment to financial prudence. By following the steps outlined in this guide, backed by thorough research, realistic financial projections, and a clear vision, you can present a compelling case to lenders. Remember, a well-structured business plan not only increases your chances of securing a loan but also sets the stage for your business’s growth and prosperity.

At Stellar Business , we understand the importance of a strong business plan in obtaining financing. Our team of experts can provide personalized guidance and support to help you create a business plan that stands out to lenders. Contact us today to learn more about how we can assist you in achieving your business goals.

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How To Write a Business Plan for a Loan: A Guide

A business plan written on a notepad, next to a cup of coffee

This article contains general information and is not intended to provide information that is specific to American Express, or its products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.

Many small business owners know that it can take money to grow. But what does it take to secure that funding? A strong business plan is often a part of the answer. That’s why learning how to write a business plan for a loan may be an important part of setting up a small business for success.

A good business plan helps a lender assess a business’ prospects. There is a standard format that owners may wish to follow. Keep in mind that applying for a loan is an important step that has legal consequences. As you put together your business plan, consult your professional advisers to make sure that you understand the importance of providing accurate information.

Here are some pointers on writing a business plan for a loan to help grow your business .

Why is a business plan important when you’re applying for a loan?

The Small Business Administration (SBA) describes a business plan as a “roadmap to small business success.” Given all the challenges of keeping a small business thriving, a roadmap is a handy thing to have. A business plan helps an owner visualize the future, take the actions needed to get there, and understand when to change strategies.

A business plan is also often required when applying for a business loan. Lenders often use an applicant’s business plan as part of the loan application and approval process. It helps the lender evaluate the likelihood of the small business being profitable.

Knowing how to write a business plan can also be helpful for other purposes. Commercial real estate landlords may ask for a business plan before leasing a space. A thorough business plan may also help with finding investors.

What lenders look for in a business plan

A lender typically evaluates several factors to decide if a small business is likely to repay requested financing. The various sections of the plan will help the lender decide if a market opportunity for the company exists, if the business has access to the organizational and managerial resources it needs, if the product or service appears viable, if a marketing plan exists, and if the small business’ finances are healthy. Simply put, the plan helps the lender review all aspects of the business on paper, so that the lender can make a more informed decision about making a loan.

In addition to the business plan, the lender will likely assess the company’s accompanying business credit reports and business credit scores to determine its creditworthiness.

What does a formal business plan include?

Many business owners have informal business plans from when their small business was just a side hustle. Business ideas written on the back of a napkin are a cliche for a reason: it’s a common way for a small business to take shape.

A formal business plan, however, can’t fit on a napkin. When a growing small business needs a sizable business loan or line of credit , they will likely need to provide something quite detailed to a lender. The need for a formal document doesn’t necessarily mean it will be difficult to secure the loan , however. It just means the lender needs a clear picture of the business.

Small business owners can think of a business plan for a loan application like a resumé when seeking a job. It helps a lender decide if the small business is a good candidate for a loan in an easy-to-read document. Similar to a resumé, the business plan should be professional looking and free of spelling, grammatical, and typographical errors.

The list below follows the naming conventions and structure of how to write a business plan for a loan application according to the SBA . It includes:

  • Executive summary
  • Company profile
  • Market analysis
  • Organization and management
  • Service or product line
  • Marketing and sales
  • Funding request
  • Financial projections

1. Executive summary: Spark interest in your business

The executive summary may be the first thing a lender will read, but small business owners may be best served by writing it last. Learning how to write a business plan for a loan may help owners understand their own business better. The executive summary will likely be most accurate after the owner has thought through, and learned from, all the sections to follow.

What is the executive summary?

The executive summary is a brief overview of the business plan. It should give readers a high-level description of the business, as well as the high points of the business plan.

What to include in an executive summary

An executive summary should include the following:

  • Business name, contact information, and social media profiles : This will help the reader find the business in the real world.
  • Mission statement : A mission statement should directly reflect the values of the business to help readers understand why the business exists.
  • Product or service description : This highlights what customers can expect from the business.
  • Demographic, economic, and financial factors affecting the business : Readers should understand the general environment in which the business operates.
  • An analysis of competitors and the primary market : This previews the market analysis section and clarifies the business’ market position.
  • Marketing, public relations, and sales plan : Readers should understand how the business plans to attract and retain customers.
  • Future revenue and cash flow projections : Financial forecasts help readers understand the business’ potential for growth and profitability.
  • Any current assets or capital : Lenders will want to know what potential collateral the business has.

2. Company profile: Define the business

A company profile is a business owner’s opportunity to briefly explain what their business is all about and why it exists. The profile should be heavy on facts, including what the products and services are, the target audience, and what needs the business fulfills. It should be written in a formal tone and explain what, if anything, makes the business unique.

3. Market analysis: Competitors and customers

A market analysis explains the business environment in which the company will operate. Lenders may look at this section to determine if the business has a good understanding of its competition and potential customers. You may want to consider hiring a market research firm to help you prepare a market analysis.

Market analysis elements include:

  • An industry analysis : This describes the outlook for the industry to which the business belongs.
  • Knowing your competition : A competitor analysis highlights the strengths and weaknesses of similar businesses in the same market to identify challenges and opportunities.
  • Know your niche : Explain how the product or service addresses an unmet If your business has a significant social media following, that may help to show how your business is reaching your customers.

4. Organization and management: Talent and experience

Who will run the business? This section is meant to help lenders understand the experience and skills of those operating the business. It’s not uncommon for lenders to ask if the talent that has made a business successful so far will stay with the business as it grows. Including a description of the current and future business structure over the next three to five years may demonstrate room for growth for valuable staff members.

5. Service or product line: What makes the business special?

A description of the small business’ service or products helps highlight what makes the business unique. The nuts and bolts of these offerings are critical, but their intangible qualities are valuable as well. This could include the recent hiring of an up-and-coming chef, the development of a new, patented product, or an innovative production method. This section is an opportunity to drill down on what makes the business unique.

6. Marketing and sales: How do you get the word out?

A great product or service is only valuable if enough potential customers hear about it. A lender will want to know how the business plans to get the word out about its offerings and increase its share of the target market. The plan might include social media platforms, established business partners, and how the company will generate and nurture sales leads.

7. Funding request: How much does the business need?

A business plan is all about clarity. Small business owners may use this opportunity to clarify how much money they need and why they need it. Lenders value a detailed explanation of how the business will use the loan and why it will increase their revenue or net profits.

8. Financial projections: Dollars and cents

Naturally, lenders will want to know about a business loan applicant’s finances. When learning how to write a business plan for a bank loan, business owners should understand the critical role of financial reports.

When preparing financial projections, it may be wise to consult a professional to best help your business prepare your documents accurately. Financial projections may include the following documentation:

  • Startup expenses
  • Payroll costs
  • Sales forecast
  • Operating expenses
  • Cash flow statements
  • Income statements for the first three years of business
  • Balance sheet
  • Break-even analysis
  • Financial ratios
  • Cost of goods sold (COGS)
  • Amortization and depreciation for your business

9. Appendix: Show instead of tell

The appendix is where a business owner can show their work. The appendix includes supporting documentation, including resumés, financial statements, media clips indicating buzz around a product or brand, or anything else that verifies the information shared in the previous eight sections.

A formal business plan can be important when applying for a business loan

Seeking financing for business growth is a great opportunity to move from an informal business plan to something more structured. Having a business plan ready for lenders is a great first step in securing the funding your business may need to grow or sustain operations.

The material made available for you on this website is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.

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What Is an SBA Loan?

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How to Write an SBA Business Plan + Template

Author: Noah Parsons

Noah Parsons

10 min. read

Updated August 1, 2024

Download Now: Free Business Plan Template →

Applying for a Small Business Administration loan typically requires a business plan.

Unfortunately, there’s no SBA loan business plan format that guarantees approval. The SBA even states you should “pick a business plan format that works for you.” 

While I agree with this sentiment, I’ve found that entrepreneurs who explain how funds will be used and how they will repay the loan tend to be more successful. 

Luckily, these details can be covered using our SBA-lender-approved business plan format . I’ll go over that structure in this article, and focus on the sections that the SBA prioritizes, so you can maximize your chances of getting funded .

You can even download a free SBA-lender-approved business plan template to fill out as you read. 

Let’s get started.

  • Why you need a business plan for SBA loans

SBA loans require good documentation of your business and personal finances. You’ll need to pull together your past tax returns, bank statements, and various application forms depending on the type of SBA loan you apply for.

The bank issuing the loan will also want to know about the future of your business. 

They’ll want to see how the loan will be used and if future cash flow projections are realistic and indicate you can afford loan payments.

That’s where writing an SBA business plan comes in. 

Not only will your business plan describe your business to the lender, but it will include the financial projections the bank will use to determine if you qualify for the loan .

  • What your business plan should include, according to the SBA

Business plans for SBA loans follow a fairly standard structure, but that doesn’t mean you need to follow it exactly. 

The SBA even recommends adjusting the plan outline to serve your needs. If a section does not apply to your business, it’s fine just to remove it.

Here’s the successful business plan structure I recommend for SBA loans:

how to write up a business plan for a bank loan

1. Executive summary

A great executive summary is a short, simple overview of your business. It should be easy for a loan officer to read and clearly understand what your business does. 

When applying for an SBA loan, highlight your: 

  • Business opportunity
  • Financial forecast
  • How much money you want to borrow and how it will be used

Remember, an executive summary should be short and to the point. The rest of your business plan will provide additional details.

[Dig deeper: How to write an executive summary ]

2. Company description

Some people call this section “Products and Services.” Either option is fine. The important thing is that you use this section to explain what your business opportunity is. 

You need to cover: 

  • The problem you solve
  • Who you’re solving it for
  • What your solution is and why it’s better

Be specific and tell the story of your business and your customers. Focus on your strengths and what sets you apart from competitors. 

If your company is developing a product, include information on:

  • What the product life cycle looks like
  • Intellectual property filings
  • Current research and development

If these topics don’t apply to your product, that’s fine. Just be sure that the description of what you sell is clear.

3. Market analysis

The market analysis chapter explains who your customers are. It provides an overview of your target market, competition, and industry.

Your target market is essentially a description of your ideal customers. Be sure to include specific demographic information (like age, gender, location, income) and psychographic information (hobbies, purchasing behaviors). 

This data should reinforce that your target market needs your solution .

It’s helpful to also include information on the size of your target market . Lenders will want to see evidence of enough potential customers to drive growth. 

While your target market information describes your customers, an industry overview discusses the type of business you’re in and its potential for growth. 

For example: If you’re starting a fast-casual restaurant, your industry overview might discuss the increased interest in fast-casual dining and how more people are eating in these types of restaurants every year. 

Finally, you’ll need to include a competitive analysis . This is a list of current competitors and alternatives, with explanations of why your business is a better option. 

Your goal is to show how your business is unique, what opportunities and threats there are, and how you plan to address the competition.

4. Organization and management

Also known as your company overview, this section is where you describe your legal structure, history, and team .

For your SBA loan application, you should focus on describing who is managing the business as clearly as possible. 

You may want to include an organizational chart. You should provide detailed resumes for everyone in leadership positions. Each team member’s experience, skills and professional qualifications can mitigate risk in the eyes of a lender .

To show you’re thinking ahead, it’s also helpful to include key positions you plan to fill as you grow. 

5. Sales and marketing plan

Your goal in this section is to summarize how you will attract, retain, and sell to your customers.

The marketing strategies and sales methods you describe should always have the customer top of mind, and demonstrate that you know how to connect with them. 

To help a loan officer visualize this, you can provide examples of marketing messaging, visuals, and promotions. If you have any research or results to show that your strategy has merit, include those as well. 

6. Financial projections

SBA lenders typically require 5 years of financial projections — including profit and loss statements , balance sheets , and cash flow statements . 

Be sure to include the SBA loan in your projections in the following areas: 

  • A liability on your balance sheet.
  • Payments on your cash flow.
  • Interest expenses on your profit and loss statement. 

I’ll dive into specific details of what you should focus on in the “how to improve your chances” section.

Your first year of financial projections should include monthly details. After that, annual summaries are usually sufficient for most SBA lenders. Occasionally, a lender might require 24 months of monthly projections, so check with your bank before submitting your business plan. 

If your business is up and running, you must also provide historical financial reports for the past 12-24 months of operations—including income statements and a current balance sheet.

Typically, you will also need to provide reports on your personal finances , including any assets you have, such as a home or car. 

Finally, include a section explaining your use of funds—what exactly you plan to use the loan for.

7. Appendix

The appendix is your chance to provide additional documents that support sections of your business plan. 

When applying for a loan, these may include:

  • Employee resumes
  • Licenses and permits
  • Patents and other legal documents
  • Historical financial statements
  • Credit histories

Don’t worry about stuffing your appendix full of additional documentation. Only include information if you believe it will strengthen your approval chances, or if your lender specifically asks for it.

  • How to improve your chances of being approved for an SBA loan

Your SBA business plan needs to focus on the loan you are applying for and how that will impact your business financially. 

Make sure to include the following information in your financial plan to increase your chances of success with your lender:

Funding request 

In your executive summary, document how much money you are asking for. It’s best to put your number where it can be clearly read, instead of trying to bury it deep within your business plan.

Remember, there are limitations to how much you can borrow through SBA-backed loans.  Most have a maximum loan amount of $5 million, while SBA Express loans have a maximum loan amount of $350,000. 

Use of funds

You should also describe how you plan to use the loan and which aspects of the business you want to invest in. 

Some SBA loans are designed specifically for expanding export businesses or funding real estate transactions. So, make sure your use of funds description is appropriate for the loan you are applying for.

Cash flow forecast

Be sure to include the loan in your cash flow statements and projections . You want to demonstrate that you’ve planned how you will use and repay the loan.

You need to show:

  • When you anticipate receiving the loan.
  • How the loan will impact your finances. 
  • Loan payments for the life of the loan. 

Having this prepared won’t just increase the chances of your application being approved—It  will make it much easier to manage the loan after you receive funding . 

Balance sheet 

You’ll also want to put the loan on your projected balance sheet , and show how the loan will get paid down over time. 

The money you owe will show up on your balance sheet as a liability, while the cash you receive from the loan will be an asset. Over time, your forecasted balance sheet will show that the loan is getting paid back. 

Your lender will want to see that you have forecasted this repayment properly.

Profit & Loss forecast

Your P&L should include the interest expenses for the loan, and show how the interest will impact your profitability in the coming months and years.

  • How long does an SBA business plan need to be?

The SBA doesn’t have an official recommended or required business plan length . As a general rule of thumb, you should make your business plan as short and concise as possible. 

Your business plan is going to be reviewed by a bank loan officer, and they will be less than excited about the prospect of reading a 50-page business plan.

If possible, keep the written portion of your business plan between 10-15 pages. Your financial forecasts will take up several additional pages. 

If you’re struggling to keep it short, try a one-page plan

A great way to start your business plan is with a simple, one-page business plan that provides a brief and compelling overview of your business. 

A good one-page plan is easy to read and visually appealing. Once you have your one-page plan, you can expand on the ideas to develop your complete written business plan, and use the one-page plan as your executive summary. 

Loan officers will appreciate a concise overview of your business that provides the summary they need before they start looking at your complete business plan and financial plan .

  • Resources and tools for writing an SBA business plan

Remember, you can download a free SBA-lender-approved business plan template . It includes detailed instructions to help you write each section, expert guidance and tips, and is formatted as lenders and investors expect.

If you’re looking for a more powerful plan writing tool, one that can also help you create financial forecasts for the use of your loan, I recommend you check out LivePlan . 

With LivePlan, you get:

  • AI-powered recommendations: Generate and rewrite sections of your plan to be more professional and persuasive.
  • Step-by-step instructions: In-app examples, tutorials, and tips to help you write an impressive business plan.
  • Automatic financials: Skip the spreadsheets and complex formulas, and quickly create accurate financial forecasts with everything a lender needs.
  • A built-in pitch presentation: Print or share your full business plan, one-page pitch, and financial reports—all with a professional and polished look.

Whether you use the template, LivePlan, or try writing a business plan yourself, following the structure and tips from this article will improve your chances of getting an SBA-backed loan. 

And for additional SBA-focused resources, check out our guide on how to get an SBA loan .   

Not sure how much money you need to raise?

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Check out LivePlan

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How to Write a Business Plan for a Loan

writing a business plan for small business loans

Business plans are often required when applying for funds from venture capitalists or other private investors, but even if you are seeking a bank loan for your company it is very helpful to prepare one since the lender wants to be confident that he is taking on an investment with growth potential so that you can repay the loan.

In this article, you will learn about the types of business loans, the importance of the business plan in your application for a loan, and how to write a business plan that will help you get the funding you need for your company.

Download our Ultimate Business Plan Template here

What Is a Business Loan?

A business loan is funding that is provided by a financial institution to a company for it to carry out its day-to-day operational activities. It also supports the purchase of equipment, refinancing of debt, and other purposes. Small businesses might need these loans because they may not have enough funds to buy equipment, refinance debt, or because they encounter financial difficulties.  

Your Loan Application

You can apply for a commercial loan with your local bank, credit union, Small Business Administration (SBA) lender, or community development financial institution like Capital Impact. You should expect that the lender will ask you detailed questions about all aspects of your business to ensure that he or she is lending you money that will be repaid.

In addition, if you are looking to purchase a business or commercial real estate, the lender may ask for additional information and documentation to assess your qualifications and ability to repay the loan.

Before applying for a business loan it can be helpful to research different types of loans so you understand what is available and what you will need to pay attention to in your loan proposal.

Common Types of Business Loans

There are many types of loans for small businesses, including:

  • lines of credit
  • commercial mortgages
  • equipment financing

Contact different lenders in your area to see what kind of loan terms they offer and if their interest rates are within your budget.

What is a Business Plan?

A traditional business plan is a document that provides an analysis of the present situation and future financial projections for a company. It includes details about the owners, management team, customers, location of the business, finances, marketing plan, and other information.

A comprehensive and well-researched business plan will help lenders make informed decisions about providing a loan for your business.

To help you get started, you can download our sample business plan for bank loan pdf .

Why Do You Need a Business Plan to Get a Business Loan?

A loan proposal business plan is your opportunity to show the lender you understand your business, its capabilities, and how it operates within the industry in which it competes. By putting together a clear and concise document that outlines all of this information, the lender should have a much easier time understanding how you have arrived at your numbers and where you are going in the future.

A business plan is also helpful to the lender because it provides an opportunity for him or her to ask you questions, further clarifying details that might not be clear from your application materials alone. This way the lender can walk away from the meeting with a good understanding of what he or she is loaning money to and how likely it is he or she will see the loan repaid.

How to Write a Business Plan to Get Approved for a Loan

Different lenders may ask for different sections of your business plan, but most require some combination of the following key elements.

1. Executive Summary

The Executive Summary is the first section of your business plan that a lender will read, but typically the last section written. It is very important because it acts as a snapshot of your business plan and allows the person reading to get an overview of what you are proposing.

The summary should include:

  • A statement about why you need the business loan
  • Details on how much money you want to borrow, when you will repay it, and interest rates
  • A description of how the proceeds from the loan will be used
  • Your business’s historical and projected financial information (again)
  • The expected impact on your company and the industry as a whole if you are successful.

2. Company Description

In the Company Description, you should include basic facts about your company such as:

  • What is the business structure (corporation, partnership, limited liability company (LLC), etc.)?
  • How long has your company been in operation?
  • What is the size of your workforce?
  • What accomplishments or milestones have you achieved within the last year?

This section should also include information about your future business plans.

  • How do you plan to expand, if at all?
  • Who are your main competitors and how is your company different from them?
  • What changes will you make to excel against these competitors?

3. Industry Analysis

In the Industry or Market Analysis, you should include information about your industry in general.

  • What are the strengths and weaknesses of your industry?
  • How will your company compete in it?
  • What trends within the industry affect its future success or potential struggles?

You may also include information about your specific niche in the market. If your company operates in a very specific area of the industry, be sure to highlight it.

4. Customer Analysis

The Customer Analysis section of your business plan helps a lender understand who your customers are and why they will buy from you.

In this section, you should include information on the following:

  • Your target audience and the individual customer segments
  • How many potential customers you have within your target market
  • How much your customers typically spend, and how much you expect them to spend in the future
  • What has caused these changes or trends to occur and how they will impact your business

5. Competitive Analysis

This section should show the competitive landscape and how you plan to compete against your competitors.

  • What are their strengths?
  • Where do they fall short?
  • What changes will you implement to get ahead of them?
  • What are your company’s competitive advantages over these competitors?

6. Marketing Plan

This section should include a detailed description of the marketing strategy you plan to implement.

  • What is your customer acquisition cost? How much will it cost you to bring in one new customer?
  • How will you reach these potential customers? Be specific about your marketing strategy, advertising methods and costs.
  • Who is responsible for implementing each part of the marketing plan and how much it is expected to cost?

7. Operations Plan

Your Operations Analysis should describe the way your company currently operates and how it will operate with the help of the loan.

  • What are your company’s strengths? Weaknesses?
  • What have you implemented in the past 12 months that has led to increased revenue, decreased costs, or improved efficiency?
  • How will you continue to operate efficiently with the proceeds?

8. Management Team

In the management section, you should describe your business in terms of its personnel structure.

  • What are the responsibilities of each person on your team?
  • Who are they? What are their qualifications?
  • How will their roles change when you receive the loan proceeds?

9. Financial Plan

This section should include your company’s financial statements include the projected income statements, projected balance sheet, and cash flow statements for the next 3 – 5 years.

You can assume that you will receive loan proceeds in 20XX, so plan accordingly.

Include a five-year break-even analysis and an explanation of how you arrived at your income statement and cash flow projections. Don’t forget to include interest and loan payments in your financial projections.

10. Appendix

In this section, you will include the supporting documents for the claims within your business plan. This section should include:

  • A loan agreement
  • A list of all applicable business licenses, permits, etc. that your company holds or has applied for

You may also include:

  • An organizational chart for your company
  • The resumes of the members of your management team
  • The resumes of any employees who will be making a significant impact on your business with the loan money
  • Copies of contracts, leases, and other agreements that are relevant to your business plan
  • Complete financial statements and projections if you only include a summary in the Financial Plan section

These documents should be attached to your business plan in a separate file if they are not included and may need to be submitted with the final small business loan application.

Tips for Writing a Business Plan for a Loan

To have a successful business plan and loan application, you need to know exactly what information your loan officer is looking for and how to find it.

  • Before you submit your application, be sure to carefully edit and proofread it for errors. Errors in a business plan may lead a lender to question your attention to detail, so make sure it is polished and error-free.
  • Always be sure to include an executive summary of the main points of your plan at the beginning, as some loan officers may not read all of the details.
  • Be sure to keep your tone professional and business-like.
  • Include detailed financials, market analysis, and other crucial information.
  • Remember that any omission or inaccuracies will be carefully scrutinized by a lending officer, so be sure you have all of the necessary documents before submission.
  • Finally, remember that lenders often appreciate creativity and outside-the-box thinking when it comes to business plans, but don’t let it distract from the necessary information for your application.

Writing a good business plan is one of the most important and necessary steps toward securing a loan or other source of capital.

Use our proven business plan template provided below, and you’ll be able to give your lender all of the information they need to make an informed decision.

The key is to do it right. By following the steps outlined above and including all of the necessary documents (and editing/proofing your application), you should significantly improve your chance of securing a loan for your business.

How to Finish Your Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

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How to Write a Business Plan for Loan with Free Template

A business plan for bank loan is instrumental in getting a loan and funding for your business. When you approach the lenders or investors with a proper business plan , you increase your chances of getting a loan for your business plan. 

Wondering how to write a business plan for a loan that could get you approved? Read our guide on the topic, check the business plan sample for bank loan, and use our business plan for loan template to make a killer business plan.

Get our affordable business plan writing services now!

Why do you need business plan for bank loan.

A business plan clears your mind about business, helps you prepare for it, and makes you a good candidate for loans, funding, and investments. In short, writing a business plan for a loan is worth it. 

For Later: To learn more about how to write a business plan specifically for a bank loan, check out our bank ready business plan .

A Business Plan Helps You Get Loans and Funding 

When you present your business idea before investors and lenders (or anyone else you are looking to for funding), you look serious with a business plan. 

You may not need a book in the name of a business plan but you need to present your business idea in a convincing way.

When they know your business idea is sound and you can return the loan, they will be inclined to give you a loan. 

A Business Plan Increases Your Chances of Business Success

A research on the impact of business planning shows that the businesses that start with proper planning have more chances of success. 

A business plan helps both the new firms and the established firms. 

A Business Plan Helps you Grow Strategically 

A business plan is a road-map for your business growth, whether you use it as a roadmap or not. When you put effort into making a business plan, you set priorities, establish goals, create a strategy for achieving those goals, and set a time frame for achieving those goals. 

A Business Plan Helps You Measure Business Growth 

The market conditions will never be exactly the same as you had expected in the business plan. 

Here, your business plan will help you compare planning against actual developments. You can see if you are going in the right direction as you planned or you need to change course.

Maybe you need to make a new business plan as your business might take a different shape than you expected.

What is included business plan for bank loan?

A business plan starts with an executive summary that briefly describes the business idea and ends with the appendix that includes lengthy financial documents or other reference materials. 

These are the parts of a business plan. 

  • Executive Summary
  • Business Overview 
  • Business Objectives and Goals
  • Competitor Analysis 
  • Market Analysis  
  • Product and Services
  • Operational Plan 
  • Business Structure and Management
  • Financial Analysis
  • Marketing and Sales

Process of Writing a Business Plan for a Bank Loan

Writing a Business Plan for bank Loan

Let’s see what you will write in each of the above-listed sections of the business plan for loan.

Executive Summary: Write this section after you have completed the business plan. Briefly discuss your business idea and its parts. 

Business Overview: Include basic details about your business like business name, address, year established, etc. 

Business Objectives and Goals: Discuss what are the short-term and long-term business goals and how do you plan to achieve them. 

Competitor Analysis: Conduct an analysis of your direct and indirect competitors. A SWOT analysis of your competitors can help you identify opportunities for creating your competitive advantage. 

Market Analysis: Discuss market conditions in your industry. Is your target industry seeing a growth trend or a decline? What are the driving factors for growth in your industry?

Product and Services: Introduce the products and services of your business, how your product or service works, how you will price them, and what is your sales and distribution strategy for your products or services. 

Operational Plan: Explain your operation plan and discuss how you plan to run your business. The operation plan will discuss organizational structure, team working, and almost all aspects of business operations. 

Business Structure and Management: Introduce business managers and key employees here. Also briefly discuss the legal structure of your business like if you are C-corp, S-corp, LLC , etc. 

Financial Analysis: Discuss initial business costs, running cost, business break even cost, the amount of funding you need and how you will spend that funding. Also create a financial forecast for your business. 

Marketing and Sales: This section will include the marketing and sales plan for your products or services.

Try to make it detailed so that the bank or your lender can understand how you will make your business profitable and if you will have solid capacity to pay back the loans. 

Appendix: Anything you didn’t or couldn’t mention in the previous business plan sections will go here. For example, you can include extended financial reports, research about your industry, detailed CVs of your team and management, etc. 

Download Free Example Business Plan for Loan

Make business plan for loan quick and easy, use this business plan template for loan. 

How to create a business plan for a loan with a Free Template?

A template is an easy and straightforward way to write a business plan. A template gives you step by step instructions on what each business section is about and how to write it. 

Wisebusinessplans offers business plan for bank loan template that guides you with questions in every section of the business. Simply answer the questions in each section and your business plan will be ready in no time. 

These are the steps to writing a business plan for small business loan with a template: 

Collection Business Information : Make business information available, keep business documentation at hand as you will need to use data from these documents. 

Write Business Plan : Proceed with writing the business plan. You will not stop until you reach financial analysis. 

Prepare Financial Projections : When you are applying for a debt, the lender will most closely look at your financial projections. Take your time to write financial projections. Make sure you sound convincing.

Also, don’t bury information in the spreadsheets or too much data. State inference you draw from the data first, include necessary financial projections in the business plan and put the rest of them into the business plan appendix. 

Proofread and Revise : Business plan is a thorough document. It is highly likely to leave some holes in the first draft. Proofread your business plan at least once to check for language and factual mistakes. You also come up with a new and better way of saying something. 

Get Second Opinion : Engage a trusted friend, or family member, or an advisor and get their opinion on your business plan. Their unique perspective will force you to improve it,

Sample Of Business Plan For Loan And Funding 

Want to see a sample on the quest of ‘how to make a business plan for a loan’, check the link below.This  business plan for bank loan example will help you see how an actual business plan for a bank looks like and what is the end-product you are working towards. 

Business Plan for Loan

Get this simple business plan template and make better business plan

 A business plan is essential when applying for a loan as it provides lenders with a comprehensive understanding of your business, including its objectives, financial projections, market analysis, and operational strategies. It demonstrates your preparedness and increases the likelihood of securing funding.

To write a business plan for a loan, start by outlining your executive summary, company description, market analysis, products or services, marketing and sales strategies, organizational structure, financial projections, and appendices. Utilizing a free business plan template can help guide you through the process.

 Free business plan templates are widely available online. You can search for reputable websites or organizations that offer templates specifically designed for writing business plans for loans. These templates typically provide a structured format and guidance to ensure you include all the necessary components.

The financial projections section of your business plan should include a sales forecast, cash flow statement, profit and loss statement, and balance sheet. It is important to provide realistic estimates based on thorough market research and a detailed understanding of your business’s financial performance.

Absolutely. Seeking assistance or feedback when writing your business plan for a loan is highly recommended. You can consult with business advisors, mentors, or industry experts who can provide valuable insights and help ensure your business plan is comprehensive, well-structured, and compelling to potential lenders.

Want to write a business plan?

Hire our professional business plan writers now!

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How to write an effective business plan in 11 steps (with workbook)

February 02, 2023 | 14 minute read

Writing a business plan is a powerful way to position your small business for success as you set out to meet your goals. Landmark studies suggest that business founders who write one are 16% more likely to build viable businesses than those who don’t and that entrepreneurs focused on high growth are 7% more likely to have written a business plan. 1 Even better, other research shows that owners who complete business plans are twice as likely to grow their business successfully or obtain capital compared with those who don’t. 2

The best time to write a business plan is typically after you have vetted and researched your business idea. (See How to start a business in 15 steps. ) If conditions change later, you can rewrite the plan, much like how your GPS reroutes you if there is traffic ahead. When you update your plan regularly, everyone on your team, including outside stakeholders such as investors, will know where you are headed.

What is a business plan?

Typically 15-20 pages long, a business plan is a document that explains what your business does, what you want to achieve in the business and the strategy you plan to use to get there. It details the opportunities you are going after, what resources you will need to achieve your goals and how you will define success.

Why are business plans important?

Business plans help you think through barriers and discover opportunities you may have recognized subconsciously but have not yet articulated. A business plan can also help you to attract potential lenders, investors and partners by providing them with evidence that your business has all of the ingredients necessary for success.

What questions should a business plan answer?

Your business plan should explain how your business will grow and succeed. A great plan will provide detailed answers to questions that a banker or investor will have before putting money into the business, such as:

  • What products or services do you provide?
  • Who is your target customer?
  • What are the benefits of your product and service for customers?
  • How much will you charge?
  • What is the size of the market?
  • What are your marketing plans?
  • How much competition does the business face in penetrating that market?
  • How much experience does the management team have in running businesses like it?
  • How do you plan to measure success?
  • What do you expect the business’s revenue, costs and profit to be for the first few years?
  • How much will it cost to achieve the goals stated in the business plan?
  • What is the long-term growth potential of the business? Is the business scalable?
  • How will you enable investors to reap the rewards of backing the business? Do you plan to sell the business to a bigger company eventually or take it public as your “exit strategy”?

How to write a business plan in 11 steps

This step-by-step outline will make it easier to write an effective business plan, even if you’re managing the day-to-day demands of starting a new business. Creating a table of contents that lists key sections of the plan with page numbers will make it easy for readers to flip to the sections that interest them most.

  • Use our editable workbook to capture notes and organize your thoughts as you review these critical steps. Note: To avoid losing your work, please remember to save this PDF to your desktop before you begin.

1. Executive summary

The executive summary is your opportunity to make a great first impression on investors and bankers. It should be just as engaging as the enthusiastic elevator pitch you might give if you bumped into a potential backer in an elevator.

In three to five paragraphs, you’ll want to explain what your business does, why it will succeed and where it will be in five years. The executive summary should include short descriptions of the following:

  • Business concept. What will your business do?
  • Goals and vision. What do you expect the business to achieve, both financially and for other key stakeholders, such as the community?
  • Product or service. What does your product or service do — and how is it different from those of competitors?
  • Target market. Who do you expect to buy your product or service?
  • Marketing strategy. How will you tell people about your product or service?
  • Current revenue and profits. If your business is pre-revenue, offer sales projections.
  • Projected revenue and profits. Provide a realistic look at the next year, as well as the next three years, ideally.
  • Financial resources needed. How much money do you need to borrow or raise to fund your plan?
  • Management team. Who are the company’s leaders and what relevant experience will they contribute?

2. Business overview

Here is where you provide a brief history of the business and describe the product(s) or service(s) it offers. Make sure you describe the problem you are attempting to solve, for whom you will solve it (your customers) and how you will solve it. Be sure to describe your business model (such as direct-to-consumer sales through an online store) so readers can envision how you will make sales. Also mention your business structure (such as a sole proprietorship , general partnership, limited partnership or corporation) and why it is advantageous for the business. And be sure to provide context on the state of your industry and where your business will fit into it.

3. Business goals and vision

Explain what you hope to achieve in the business (your vision) as well as its mission and value proposition. Most founders judge success by the size to which they grow the business using measures such as revenue or number of employees. Your goals may not be solely financial. You may also wish to provide jobs or solve a societal problem. If that’s the case, mention those goals as well.

If you are seeking outside funding, explain why you need the money, how you will put it to work to grow the business and how you expect to achieve the goals you have set for the business. Also explain your exit strategy—that is, how you would enable investors to cash out, whether that means selling the business or taking it public.

4. Management and organization

Many investors say they bet on the team behind a business more than the business idea, trusting that talented and experienced people will be capable of bringing sound business concepts to life. With that in mind, make sure to provide short bios of the key members of your management team (including yourself) that emphasize the relevant experience each individual brings, along with their special talents and industry recognition. Many business plans include headshots of the management team with the bios.

Also describe more about how your organization will be structured. Your company may be a sole proprietorship, a limited liability company (LLC) or a corporation in one or more states.

If you will need to hire people for specific roles, this is the place to mention those plans. And if you will rely on outside consultants for certain roles — such as an outsourced CFO — be sure to make a note of it here. Outside backers want to know if you’ve anticipated the staffing you need.

5. Service or product line

A business will only succeed if it sells something people want or need to buy. As you describe the products or services you will offer, make sure to explain what benefits they will provide to your target customers, how they will differ from competing offerings and what the buying cycle will likely be so it is clear that you can actually sell what you are offering. If you have plans to protect your intellectual property through a copyright or patent filing, be sure to mention that. Also explain any research and development work that is underway to show investors the potential for additional revenue streams.

6. Market/industry analysis

Anyone interested in providing financial backing to your business will want to know how big your company can potentially grow so they have an idea of what kind of returns they can expect. In this section, you’ll be able to convey that by explaining to whom you will be selling and how much opportunity there is to reach them. Key details to include are market size; a strengths, weaknesses, opportunities and threats (SWOT) analysis ; a competitive analysis; and customer segmentation. Make it clear how you developed any projections you’ve made by citing interviews or research.

Also describe the current state of the industry. Where is there room for improvement? Are most companies using antiquated processes and technology? If your business is a local one, what is the market in your area like? Do most of the restaurants where you plan to open your café serve mediocre food? What will you do better?

In this section, also list competitors, including their names, websites and social media handles. Describe each source of competition and how your business will address it.

7. Sales and marketing

Explain how you will spread the word to potential customers about what you sell. Will you be using paid online search advertising, social media promotions, traditional direct mail, print advertising in local publications, sponsorship of a local radio or TV show, your own YouTube content or some other method entirely? List all of the methods you will use.

Make sure readers know exactly what the path to a sale will be and why that approach will resonate with customers in your ideal target markets as well as existing customer segments. If you have already begun using the methods you’ve outlined, include data on the results so readers know whether they have been effective.

8. Financials

In a new business, you may not have any past financial data or financial statements to include, but that doesn’t mean you have nothing to share. Preparing a budget and financial plan will help show investors or bankers that you have developed a clear understanding of the financial aspects of running your business. (The U.S. Small Business Administration (SBA) has prepared a guide you can use; SCORE , a nonprofit organization that partners with the SBA, offers a financial projections template to help you look ahead.) For an existing business, you will want to include income statements, profit and loss statements, cash flow statements and balance sheets, ideally going back three years.

Make a list of the specific steps you plan to take to achieve the financial results you have outlined. The steps are generally the most detailed for the first year, given that you may need to revise your plan later as you gather feedback from the marketplace.

Include interactive spreadsheets that contain a detailed financial analysis showing how much it costs your business to produce the goods and services you provide, the profits you will generate, any planned investments and the taxes you will pay. See our startup costs calculator to get started.

9. Financial projections

Creating a detailed sales forecast can help you get outside backers excited about supporting you. A sales forecast is typically a table or simple line graph that shows the projected sales of the company over time with monthly or quarterly details for the next 12 months and a broader projection as much as five years into the future. If you haven’t yet launched the company, turn to your market research to develop estimates. For more information, see “ How to create a sales forecast for your small business. ”

10. Funding request

If you are seeking outside financing such as a loan or equity investment, your potential backers will want to know how much money you need and how you will spend it. Describe the amount you are trying to raise, how you arrived at that number and what type of funding you are seeking (such as debt, equity or a combination of both). If you are contributing some of your own funds, it is worth noting this, as it shows that you have skin in the game.

11. Appendix

This should include any information and supporting documents that will help investors and bankers gain a greater understanding of the potential of your business. Depending on your industry, you might include local permits, licenses, deeds and other legal documents; professional certifications and licenses; media clips; information on patents and other intellectual property; key customer contracts and purchase orders; and other relevant documents.

Some business owners find it helpful to develop a list of key concepts, such as the names of the company’s products and industry terms. This can be helpful if you do business in an industry that may not be familiar to the readers of the business plan.

Tips for creating an effective business plan

Use clear, simple language. It’ll be easier to win people over if your plan is easy to read. Steer clear of industry jargon, and if you must use any phrases the average adult won’t know, be sure to define them.

Emphasize what makes your business unique. Investors and bankers want to know how you will solve a problem or gap in the marketplace differently from anyone else. Make sure you’re conveying your differentiating factors.

Nail the details. An ideal business plan will be detailed and accurate. Make sure that any financial projections you make are realistic and grounded in solid market research. (If you need help in making your calculations, you can get free advice at SCORE.) Seasoned bankers and investors will quickly spot numbers that are overly optimistic.

Take time to polish it. Your final version of the plan should be neat and professional with an attractive layout and copy that has been carefully proofread.

Include professional photos. High-quality shots of your product or place of business can help make it clear why your business stands out.

Updating an existing business plan

Some business owners in rapidly growing businesses update their business plan quarterly. Others do so every six months or every year. When you update your plan make sure you consider these three things:

  • Are your goals still current? As you’ve tested your concept, your goals may have changed. The plan should reflect this.
  • Have you revised any strategies in response to feedback from the marketplace? You may have found that your offerings resonated with a different customer segment than you expected or that your advertising plan didn’t work and you need to try a different approach. Given that investors will want to see a marketing and advertising plan that works, keeping this section current will ensure you are always ready to meet with one who shows interest.
  • Have your staffing needs changed? If you set ambitious goals, you may need help from team members or outside consultants you did not anticipate when you first started the business. Take stock now so you can plan accordingly.

Final thoughts

Most business owners don’t follow their business plans exactly. But writing one will get you off to a much better start than simply opening your doors and hoping for the best, and it will be easier to analyze any aspects of your business that aren’t working later so you can course-correct. Ultimately, it may be one of the best investments you can make in the future of your business.

Business plan FAQs

What are common mistakes when writing a business plan.

The biggest mistake you can make when writing a business plan is creating one before the idea has been properly researched and tested. Not every idea is meant to become a business. Other common mistakes include:

  • Not describing your management team in a way that is appealing to investors. Simply cutting and pasting someone’s professional bio into the management section won’t do the trick. You’ll want to highlight the credentials of each team member in a way that is relevant to this business.
  • Failing to include financial projections — or including overly optimistic ones. Investors look at a lot of business plans and can tell quickly whether your numbers are accurate or pie in the sky. Have a good small business accountant review your numbers to make sure they are realistic.
  • Lack of a clear exit strategy for investors. Investors may want the option to cash out eventually and would want to know how they can go about doing that.
  • Slapdash presentation. Make sure to fact-check any industry statistics you cite and that any charts, graphs or images are carefully prepared and easy to read.

What are the different types of business plans?

There are a variety of styles of business plans. Here are three major types:

Traditional business plan. This is a formal document for pitching to investors based on the outline in this article. If your business is a complicated one, the plan may exceed the typical length and stretch to as many as 50 pages.

One-page business plan. This is a simplified version of a formal business plan designed to fit on one page. Typically, each section will be described in bullet points or in a chart format rather than in the narrative style of an executive summary. It can be helpful as a summary document to give to investors — or for internal use. Another variation on the one-page theme is the business model canvas .

Lean plan. This methodology for creating a business plan is ideal for a business that is evolving quickly. It is designed in a way that makes it easy to update on a regular basis. Lean business plans are usually about one page long. The SBA has provided an example of what this type of plan includes on its website.

Is the business plan for a nonprofit different from the plan for other business types?

Many elements of a business plan for a nonprofit are similar to those of a for-profit business. However, because the goal of a nonprofit is achieving its mission — rather than turning a profit — the business plan should emphasize its specific goals on that front and how it will achieve them. Many nonprofits set key performance indicators (KPIs) — numbers that they track to show they are moving the needle on their goals.

Nonprofits will generally emphasize their fundraising strategies in their business plans rather than sales strategies. The funds they raise are the lifeblood of the programs they run.

What is the difference between a business plan, a strategic plan and a marketing plan?

A strategic plan is different from the type of business plan you’ve read about here in that it emphasizes the long-term goals of the business and how your business will achieve them over the long run. A strong business plan can function as both a business plan and a strategic plan.

A marketing plan is different from a business plan in that it is focused on four main areas of the business: product (what you are selling and how you will differentiate it), price (how much your products or services will cost and why), promotion (how you will get your ideal customer to notice and buy what you are selling) and place (where you will sell your products). A thorough business plan may cover these topics, doing double duty as both a business plan and a marketing plan.

Explore more

Editable business plan workbook

how to write up a business plan for a bank loan

Starting a new business

1 . Francis J. Green and Christian Hopp. “Research: Writing a Business Plan Makes Your Startup More Likely to Succeed.” HBR. July 14, 2017. Available online at https://hbr.org/2017/07/research-writing-a-business-plan-makes-your-startup-more-likely-to-succeed.

2 . CorpNet, “The Startup Business Plan: Why It’s Important and How You Can Create One,” June 29, 2022.

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How to Write a Business Plan Banks Can't Resist Here's what your business plan needs if you want startup capital from a bank.

By Teresa Ciulla Nov 13, 2014

Opinions expressed by Entrepreneur contributors are their own.

In the book, Write Your Business Plan , the staff of Entrepreneur Media offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture and what it takes to ensure success. In this edited excerpt, the authors discuss the ABCs of getting a bank loan for your business.

Many of the most successful businesses are financed by banks, which can provide small to moderate amounts of capital at market costs. They don't want control—at least beyond the control exerted in the covenants of a loan document. And they don't want ownership. Bankers make loans, not investments, and as a general rule, they don't want to wind up owning your company.

Bankers primarily provide debt financing. You take out a loan and pay it back, perhaps in installments consisting of principal and interest, perhaps in payments of interest only, followed by a balloon payment of the principal. One of the nice things about debt financing is that the entrepreneur doesn't have to give up ownership of his company to get it.

Bankers can usually be counted on to want minimal, if any, input into how the business is run. Get behind on the payment schedule, however, and you're likely to find a host of covenants buried in your loan documentation. Loan covenants may require you to do all sorts of things, from setting a minimum amount of working capital you must maintain to prohibiting you from making certain purchases or signing leases without bank approval. Be sure to have your accountant, financial advisor or attorney review your loan documents and spell out everything for you very carefully before you sign.

A banker's first concern is getting the bank's money back plus a reasonable return. To increase their odds, bankers look for certain things, including everything from a solid explanation of why you need the money and what you're going to use it for to details about other borrowing or leasing deals you've entered into.

Bank loan applications can be almost as long and complete as a full-fledged business plan. Plans and loan applications aren't interchangeable, however. A banker may not be interested in your rosy projections of future growth. In fact, when confronted with the kind of growth projection required to interest a venture capitalist, a banker may be turned off. On the other hand, a banker is likely to be quite interested in seeing a contingency plan that will let you pay back the loan, even in the event of a worst-case scenario.

The five things a banker will look for you to address are:

1. Cash flow. One of the most convincing things you can show a banker is the existence of a strong, well-documented flow of cash that will be more than adequate to repay a loan's scheduled principal and interest. You'll need more than a projection of future cash flow, by the way. Most bankers will want to see cash flow statements as well as balance sheets and income statements for the past three or so years. And don't forget your tax returns for the same period.

2. Collateral. If you're just starting out in business or dealing with a banker you don't know well, you're unlikely to be able to borrow from a bank without collateral. Collateral is just something the bank can seize and sell to get back some or all of the money you've borrowed in the event that everything goes wrong and you can't pay it back with profits from operations. It may consist of machinery, equipment, inventory or, all too often, the equity you own in your home.

Why do bankers seek collateral? They have no desire to own second-hand equipment or your house. Experience has taught them that entrepreneurs who have their own assets at risk are more likely to stick to a business than those who have none of their own assets at risk.

3. Co-signers. They provide an added layer of protection for lenders. If your own capacity for taking on additional debt is shaky, a co-signer (who's essentially lending you their creditworthiness) may make the difference.

4. Marketing plans. More than ever before, bankers are taking a closer look at the marketing plans embedded in business plans. Strong competitors, price wars, me-too products, the fickle habits of the buying public and other market-related risks must be addressed. Your banker (and most other investors) have to know that you recognize these risks and have well-thought-out ways to deal with them. Besides, it's the cash flow from operations that pays off bank loans.

5. Management. Bankers like to stress the personal aspect of their services. Many state that they're interested in making loans based on a borrower's character as well as their financial strength. In fact, the borrower's track record and management ability are concerns for bankers evaluating a loan application. If you can show you've run one or more other companies successfully, it will increase your chances of landing a loan to get a startup going.

Bank financing is most appropriate for up-and-running enterprises that can show adequate cash flow and collateral to service and secure the loan. Bankers are less likely to provide startup money to turn a concept into a business, and they're even less likely to put up seed money to prove a concept unless you have a track record of launching previous businesses with successful results.

The old saying about bankers lending only to people who don't need to borrow is almost true. Bankers prefer to lend to companies that are almost, but not quite, financially robust enough to pursue their objective without the loan. Their natural tendency is to be conservative.

This is important to understand because it affects how and when you will borrow. You should try to foresee times you'll need to borrow money and arrange a line of credit or other loan before you need it. That will make it easier and, in many cases, cheaper in terms of interest rates than if you wait until you're a needier and, in bankers' eyes, less-attractive borrower.

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Every business owner can benefit from writing a business plan, including those in the early stages of launching a business . A well-crafted business plan communicates the business’s strategy for growth to key leaders and investors. It’s also an important step to getting a business loan since many lenders require it.

Let’s walk through the steps and elements of writing your ideal business plan.

Key takeaways

  • A business plan outlines how you plan to bring products or services to market
  • Many lenders require a business plan be included with a loan application
  • You can choose to write a lean or traditional business plan
  • It covers everything from market research to your marketing and financial plan.

What is a business plan?

A business plan is a document that outlines a business’s strategy for bringing a product or service to market. It describes the company, product idea and goals or steps that the business will take to achieve growth. The document includes multiple sections that provide insight into each part of the strategy.

The business plan can be a simple document called a lean business plan or a more detailed traditional business plan. The lean business plan covers the basics of the company, product, target customers and how it will get revenue. It may only be one page with short descriptions for each part.

The traditional business plan includes more depth on the goals, measurements, research and marketing strategies to get the business where it’s going. Here are key differences in the information written for each type of business plan:

Lean business plan Traditional business plan
Short company description Executive summary
Value proposition Company description and management structure
Target customers Value proposition
Revenue streams Market and competitor research
Funding and resources Goals and performance metrics
Milestones to achieve Marketing strategy
Financial forecast and budget Funding sources
Financial forecast and budget

Although there’s no one-size-fits-all approach, follow these steps to create a strong business plan.

Write an executive summary

An executive summary is the introduction to a business plan, giving the key details about your business model and the product or service you’re offering. While there’s no strict formula for writing this section, you should include all the relevant details that you’d want a key partner or investor to know.

It should describe your product or service idea, target market and key objectives for growth within the next few years. It may also summarize your marketing and sources of revenue or funding.

You can adjust what to include based on the exact business you’re starting and its business model. Most business plans keep the executive summary to one to two pages.

Create a company description

The company description should overview important details about your company. It can state your company’s name, location and type of entity as well as describe its history. It should also clearly define the vision that you have for your company’s future in the form of a mission or vision statement.

You may also outline the structure for managing the business, listing key roles and responsibilities and the people filling those roles. Depending on the details you included in the executive summary, you might include information about your product or service.

Describe your value proposition

The value proposition is your chance to pitch what makes your business stand out. It identifies the customer’s problem or gap in the market for the product or service you’re offering. It then goes into detail about how your business will solve the problem.

The value proposition can also explain major barriers that customers have before making a decision and what your business will do to break through those barriers. It shows leaders and investors that you have a thoughtful purpose behind the business you’re creating.

State your business goals

The path to achieving success starts with knowing what success looks like. Many business plans state its main objectives in the company description. Others describe those goals in a separate part of the business plan to dive deeper into the specific goals.

You can also include key measurements you’ll use to gauge whether your business is achieving its goals. You would then use these goals in other business planning documents, further breaking them down into defined short-term steps that ladder up to the larger goals.

Outline your product and service

Next, you want to dive into the main product or service that your business is offering. Explain what the product is, how it works and the benefits that it brings to customers. If you’re planning to make multiple products, you can include a description of each product line. Show how this product or service is set apart from similar products from competitors.

You can also use this section to show how the product or service is produced, including cost of supplies and the price at which you plan to sell. Let the investors and stakeholders know if you have a trademark or patent for the products you’re creating.

Give a summary of market research

Next comes market research, the part of the plan where you do your due diligence to gather information and understand your target customers and competitors. First, you want to understand your target customers’ needs and any barriers they might have to buying your product.

You want to look for information about their demographics and how they might respond to the product you’re offering. This information will help you when designing your product and marketing it in a way that resonates with customers.

Then, you can look at the economy around your product, such as average pricing and sales revenue. This also includes research about your competitors, the market share that they hold and the barriers to entering your market. This section may include data from data research companies, surveys, focus groups and interviews.

According to the U.S. Small Business Administration , the questions you’re trying to answer include:

  • Market size, or how many people may want to buy your product
  • What people are willing to pay for your product
  • Similar products already available
  • Who your competitors are
  • How your industry is doing
  • Typical revenue gained by small businesses in your industry

Summarize a marketing strategy

Once you’ve clearly defined your product and who you’re selling to, you can come up with a strategy for how you’ll reach and sell to customers. In this section, you’ll include the different marketing channels you’ll use to promote your products and services.

These may include direct mailers, social media, traditional or online advertising or media events. The exact channels you use will depend on where you can easily find your target customers.

You can also describe the key messaging that you plan to use during marketing, which will pinpoint the value that it offers to customers. The marketing plan should also include the cost of marketing to different channels and your marketing budget. You can then outline the marketing goals and measurements you’ll use to see if you’re meeting those goals.

Create a logistics and operations plan

The logistics and operations section of your business plan is a detailed description of how your business will bring products and services to market. It explains how the business will run on a day-to-day basis. It should highlight your company’s management structure, give an overview of processes and describe the workflow from end to end. It can also include data on how many products you can make or how long it will take to make products or offer services.

Create a financial plan

Now that you’ve laid out the research, goals and planning, you can use that information to forecast revenue and build a financial plan. Use any past revenue or sales history as a starting point. Then, refer to your company’s recent growth and goals to calculate future financial growth.

If you’re a startup , you can use market research to estimate revenue for a startup in your industry. You can either forecast revenue manually or find software that projects revenue for you.

In your financial plan, you also want to create and track your business budget . You’ll track your estimated and actual revenue, updating regularly to keep the revenue forecast accurate and realistic. Next, you’ll list all expenses and their amounts, including one-time, variable, fixed or seasonal expenses. Here are some examples of different business expenses:

  • One-time or capital expenses: Equipment, real estate, furniture, commercial vehicles, business licenses
  • Variable expenses: Inventory, utilities, fuel, office supplies, shipping services, card processing fees
  • Fixed expenses: Employee salaries and benefits, software, web hosting, office or equipment leases, business loan repayments

Business plan resources

Writing your business plan will take more than putting pen to paper. Try these resources to help you gather data, set up your finances and more:

  • Business plan templates. Creating a business plan for the first time? Learn by looking up examples of other business plans or templates like these from Smartsheet .
  • Software for accounting and financial planning. Many small businesses use Quickbooks, Xero or Netsuite to track revenue and expenses. These may also forecast revenue based on sales history.
  • Business loan resources. To cover your funding needs, think through the types of business loans that would best serve your business. Once you’ve landed on a loan, compare features and interest rates to help you make a decision.
  • Survey tools. For in-depth market research, you can build a survey and send to your target customers through a data research company like GWI.

Small business mentoring

Experienced mentors can guide you to making effective business decisions and unlock new potential for growth. Where to find small business mentors:

  • SBA. You can find resources and free or low-cost mentors through the SBA’s local assistance tool .
  • Small Business Development Centers. SBDCs provide specialized training programs in your local area covering specialized topics like marketing, data research and business management.
  • Community Development Financial Institutions. CDFIs   are financial organizations like banks and credit unions that are built to develop the community. Alongside banking and lending services, CDFIs offer training programs and resources.
  • SCORE. SCORE is an organization that partners with the SBA to bring resources to small business owners. Mentorship is at the core of what the organization does, and it can match you with a local mentor through its online locator tool.
  • Local Chamber of Commerce. These local organizations are known for supporting business networking. They may help you find a mentorship program, or you may build a relationship with another successful entrepreneur through networking events.
  • Nonprofit organizations. Some nonprofit organizations are dedicated to supporting small business owners with funding, trainings and mentorship programs. These are typically local programs. For example, NYPACE is a nonprofit that offers free consulting to underserved entrepreneurs in New York.

Bottom line

Your business plan should outline key information about your company, products and the strategy for getting those products in the hands of your customers. Every business plan looks different, but there is essential information to include in every plan, such as who your target customer is and your expected revenue. The business plan serves to help you get business funding and outline exact goals and steps to growing your company.

Frequently asked questions

Do i need a business plan to apply for a business loan, how do i write a simple business plan, what basic items should be included in a business plan, related articles.

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How To Write A Business Loan Proposal

Some banks might require a business loan proposal before considering your small business for a loan. Learn how to write one with our complete guide.

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  • A business loan proposal is an opportunity to persuade lenders by showcasing your business’s viability and ability to repay the loan.
  • Your proposal should include business information, financials, and a clear explanation of why you need the loan and how you’ll repay it.
  • Demonstrate your business's potential for growth by including your team's experience and your marketing strategy.

As a small business owner, you know the need for external funding.

It’s important to familiarize yourself with all the most promising ways to gain extra capital for your business — from crowdsourcing, to grants, to the best business loans . And when it comes to loans, we have a guide to walk you through the process of writing a business loan proposal.

In this article, we’ll go over the specifics of a business loan proposal, what you need to include, and when you would need to write one.

Table of Contents

What Is A Business Loan Proposal?

What do i need for a business loan proposal, what to do if you don’t get approved for a loan.

A business loan proposal is your opportunity to explain to a potential lender why they should take on the risk of lending to you. Think of it as a persuasive essay to convince the bank you are a viable business that will not default — you will paint that picture both with a narrative about your business and your profit/loss metrics.

Any face-to-face or phone meetings you have with your lender are most likely going to be brief. You may not have an opportunity to present your business in a more personal or nuanced manner, and that is where the proposal comes in.

Business loan proposals are a way to share the human side of your business, and they act as a brief overview of your business’s financial and performance history.

But how do you actually write a business loan proposal? Let’s go over the steps below.

Before we get into the actual writing, let’s first go over what kind of information/materials you will need in order to write your business loan proposal.

Business Information

Any lender is going to need to know:

  • The name of your business
  • The structure of your business (Corporation, LLC, Sole Proprietorship, etc.)
  • The amount of time you’ve been in business
  • Your current annual revenue
  • Your current number of employees (if any)

Some extra information that you’ll want to be sure to provide is your basic business model.

  • Who is your typical customer?
  • How does your business serve these customers?
  • What’s your ideal market?
  • How healthy is your industry? Where do you fall in that growth?
  • Who is your competition?

All of these questions are things you have probably included or considered in your process of writing a business plan or starting your business. Include your business plan in your application materials.

Cash Flow Projections

These projections will be based on last year’s cash flow reports, profit and loss (P&L) statements, and your most current balance (statement of your business’s assets, liabilities, and owner’s equity).

You’ll need to have all of this information ready to properly write your business loan proposal.

Make sure you also have your tax returns, bank statements, and credit reports from the past two years or more.

Information About Existing Debt

If you have any other loans, traditional long-term or otherwise, you’ll need to collect their information to include in your proposal.

For any lenders you currently have a loan with, you’ll need to give your new potential lender its:

  • Individual/company name
  • Mailing/business address
  • Contact information
  • The amount of the debt (principal and whatever is remaining)

Team Background Information

You will need to share financial information for yourself, any other owners/business partners, and/or your management team. While this one may seem a little personal, it’s just another way lenders will assess your risk as a customer.

  • Mailing addresses

Online Presence

This one is a very 21st-century addition. A common theme in this list is that lenders want to make sure they’re going to get paid. Just about everything in a business proposal is designed to show a lender that you can and will pay back your loan in a timely manner.

One way you can prove that your business is a good investment is to show that you are actively marketing yourself.

Lenders may want to know that you’re proactively trying to find new customers. You can prove this by listing your social media handles and website URL. If you use other methods of advertising (posters, emails, industry-specific groups, etc.) make a list of these as well.

With all of your information in hand, you’re ready to write your proposal.

Keep in mind that you’ll want to write this proposal like an essay, not a list. Tell the story of your business while still meeting all of the requirements.

Step 1: Introduce Your Business

  • Start The Proposal With A Formal Introduction: Who are you? What business do you own? How much of a loan are you requesting? Keep this to one sentence.
  • Explain The History Of Your Business: Be sure to include the details we listed above under “Basic Information.”
  • Describe Your Business Model:  Even if it’s obvious to you, a lender might not understand what your business does. Answer the questions we discussed earlier and explain how your business makes money.

Step 2: Explain Why You Need A Loan

For SBA loans specifically, your lender will need to know exactly what the funds you are receiving are going toward. Include a description of what you’ll be using the funds for, your expected costs, any variable expenses you expect, and how the work done as a result of the loan funding will change your business for the better.

  • Example: If you plan on using the loan to purchase a large piece of equipment, a lender is going to want to know more about it and the company you’re planning on purchasing it from.

Step 3: Prove That You Can Pay Back The Loan

While a lot of this is written in a more narrative form, this section of the business loan proposal is very focused on the numbers. Begin this section by repeating the loan amount you’re applying for.

  • How Will You Pay For Your New Debt: Refer to your cash flow projections and make sure you reference your previous year’s cash flow reports, P&L statements, and current balance sheets.
  • How Will You Fit Your New Debt Into Your Current Budget:  Make the case that you can add this loan payment to your business’s monthly budget without major hardship. You can also show how the increased revenue from the changes made by this loan will help you make payments in the future.
  • How Will Your Current Debt Impact Your Ability To Make Payments:  SBA loans will require you to provide detailed information about your current lender, including the individual/company name, address, contact information, and the size of the loan.

Step 4: Introduce Your Partners

Now that your potential lender knows more about your business, it’s time to introduce them to the people behind the operation.

Expect to have to produce names, addresses, contact information, tax returns, bank statements, and credit reports for yourself and any business partners or management team you have.

It’s also important to include in this section any management or industry experience that applies to your business. Lenders will also need to know how much of your own money you’ve invested in your business.

SBA-backed lenders will be especially interested in ensuring that your business doesn’t loan money, involve passive investments, pyramid sales, or gambling.

Step 5: Share Your Marketing Strategy

Another way to prove that you’ll continue to have the revenue required to make your monthly payments is to show your marketing strategy. You can do that by sharing your social media accounts, your website, email campaigns, and other promotional activities.

Sometimes, after all that work, your loan might still be denied. Don’t lose hope!

Some common reasons why a loan might be denied include:

  • A bad credit history
  • The bank is overextended with loans
  • You don’t meet the criteria
  • There is incorrect information in your application

You can also ask a loan officer for the reasons why your loan was denied to help you further understand if there is any other information you can include next time.

However, a stellar business loan proposal can decrease your chances of being denied , so take your time and present as much positive information about your business as you are able — paint a picture of how your small business is thriving and how you intend to pay back the loan.

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How To Write a Business Proposal for a Small Business

September 3, 2024.

Businessman Shaking Hands With Builder

A great business proposal is like having an ace salesperson who never sleeps. It works around the clock, convincing clients why they should choose you over the competition.

A business proposal outlines your plan to solve a client’s problem or meet their needs. It explains what you can do, how you’ll do it, and why you’re the best choice.

Here’s how to write a business proposal that works. Learn everything from understanding your client’s needs to presenting your solution clearly—and creating proposals that turn potential clients into paying customers.

RELATED ARTICLE — What Is Customer Relations? Everything You Need To Know for Your Business

What Is a Business Proposal?

A business proposal is a written proposal that explains how you can solve a problem or meet a need for another company or person. It’s a powerful tool companies use to win new clients and projects. Think of it as a mix between a sales pitch and a project plan.

Because it focuses on a specific business opportunity, learning how to write a solid business proposal is very different from learning how to write a grant proposal for a small business. It’s also different from learning how to write a business proposal for funding—more commonly referred to as a business plan—which is a broader document aimed at securing investment in your company.

In a business proposal, you lay out all the details of what you’re offering. This includes what you’ll do, how you’ll do it, when you’ll get it done, and how much it’ll cost. But it’s more than just a list of facts and figures. A good proposal tells a story about why your solution is the best one out there.

RELATED ARTICLE — How To Write a Business Plan: A Step-By-Step Guide

Types of Business Proposals

Business proposals come in different shapes and sizes. Some are short and sweet, while others are long and detailed. The length and style often depend on what you’re proposing and who it’s for. But no matter the size, the goal is always the same: to convince the reader that your company is the right choice for the job.

Let’s look at the main types of business proposals you may write:

  • Solicited Proposals . These are proposals a client asks for. It’s like when a teacher gives you an assignment. They tell you exactly what they want, which makes it easier to follow.
  • Unsolicited Proposals . These are proposals you send without being asked. You’re putting out the feelers to see if the client is interested in working with you.
  • Formal Proposals . These are detailed professional documents. You need to follow specific rules and include lots of information.
  • Informal Proposals . These are shorter and more casual. Think of them like a quick email to a friend explaining an idea. 

RELATED ARTICLE — Communication Methods Within a Business and How To Improve Your Skills

What Should Your Business Proposal Outline Include?

Happy clothing store owners working

A great business proposal is like a well-organized toolbox. Each part has its place and purpose, working together to get the job done. Let’s look at the key sections you should include in your proposal to make it clear, convincing, and complete:

  • Title Page and Table of Contents . Start with a professional-looking front page and a list of what’s inside.
  • Proposal Snapshot . Give a quick overview of your main ideas and why they’re a great fit for the client’s needs.
  • Client’s Challenge . Show you understand the problem the prospective client needs to solve.
  • Your Game Plan . Explain how you’ll fix the client’s problem step by step.
  • Cost Breakdown . Be clear about pricing and how payment works.
  • Why Choose You . Share your (or your team’s) skills and past successes.
  • Next Steps and Wrap-up . Tell the client what to do next and remind them why your idea is the best.

RELATED ARTICLE — How To Register a Business in the US: A Comprehensive Guide

10 Steps To Writing a Business Proposal

Crafting a winning business proposal requires following some key steps to build a solid foundation. Here’s a guide to help you write a proposal that stands out and gets results:

  • Pick an Eye-Catching Name . Choose a title that clearly explains your proposal and grabs attention.
  • Make a Roadmap . Create a table of contents to help readers find information.
  • Write a Summary . Briefly explain your main ideas and why they’ll work.
  • Describe the Challenge . Show you understand the client’s problem in detail.
  • Offer Your Solutions . Explain how you’ll solve the problem, being specific about your approach.
  • Highlight Your Strengths . Show off your company’s skills and past successes.
  • Plan the Project Timeline . Develop a realistic schedule for completing the work.
  • Explain the Costs . Be clear about prices and what’s included in different options.
  • Set the Ground Rules . Outline important terms and conditions to prevent misunderstandings.
  • Prepare for the Answer . Explain what happens next and how the client can move forward.

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A Business Proposal Example

The best way to learn is by seeing real examples. Here’s one for a small landscaping company. It’ll show you how to put all the pieces together in a way that works. You can also use it as a business proposal template for your own proposals.

Landscaping Company Proposal

“Green Thumb Landscaping: Transforming Your Backyard into a Personal Oasis”

Prepared for: The Johnson Family

Date: July 1, 2024

By: Green Thumb Landscaping

Table of Contents

Executive summary, your landscaping needs, our proposed solution, project timeline, cost breakdown, about green thumb, terms and conditions, next steps and closing remarks.

Green Thumb Landscaping will turn your ordinary backyard into a stunning outdoor living space. Our plan includes a custom patio, flower gardens, and a water feature, all designed to fit your family’s lifestyle and budget. With our expertise and your vision, we’ll create a backyard oasis for you to enjoy for years to come.

The Johnson family has a large but unused backyard. They want a beautiful outdoor space for relaxing and entertaining, but they’re not sure how to make the most of the area. The current space lacks visual appeal, functional areas for gathering, and proper landscaping to provide privacy and shade.

  • Design a 500 sq ft patio using eco-friendly materials
  • Create colorful flower beds along the property line
  • Install a small pond with a fountain as a centerpiece
  • Plant shade trees for privacy and comfort
  • Set up an efficient irrigation system

Week 1–2 : Design finalization and material ordering

Week 3–4 : Site preparation and patio installation

Week 5–6 : Landscaping and planting

Week 7 : Water feature installation

Week 8 : Irrigation system setup and final touches

Patio Installation : $8,000

Landscaping and Planting : $5,000

Water Feature : $3,000

Irrigation System : $2,000

_______________________

Total Project Cost : $18,000

Green Thumb has 15 years of experience creating award-winning landscapes. Our team includes certified horticulturists and eco-friendly design experts. We’ve completed over 500 projects, with a 98% customer satisfaction rate.

  • 50% deposit required to begin work
  • Balance due upon project completion
  • Any changes to the agreed plan may result in additional costs
  • Green Thumb provides a 1-year warranty on all plantings and installations

To transform your backyard, simply sign the attached agreement. We’ll schedule a final design meeting within a week and can start work within 14 days.

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5 Tips for Writing a Great Professional Business Proposal

Male small business owner working on laptop

Now that you know the basics of writing a business proposal, let’s look at some tips to make yours stand out from the crowd. Remember, a good proposal isn’t just about what you say, but how you say it.

  • Make It Look Good . Use a clean, professional design with plenty of white space. Choose easy-to-read fonts and use colors that match your brand. This is extra important for unsolicited proposals because a document that looks great is more likely to get read.
  • Keep It Short and Sweet . Aim for clear, simple language that gets to the point quickly. Break up long paragraphs into shorter ones.
  • Show, Don’t Tell . If possible, include charts, graphs, or images to make your points clearer. For example, if you’re talking about saving money, show a graph of how much the client will save compared to a competitor.
  • Tailor It . Don’t use the same proposal for everyone. Show that you understand each client’s specific needs and how your solution fits them perfectly.
  • Proofread (Then Proofread Again) . Spelling mistakes and typos can make you look careless. Read through your proposal several times, and consider asking someone else to look it over for you.

Stay on Brand and Look Professional With Invoice Simple

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More landlords are selling up in London, with the number of buy-to-let properties up for sale hitting a 10-year-high. 

Analytics company TwentyCi found 22% of all newly listed homes in July had been available to rent in the last 10 years. 

This compares with 15.6% in July 2023. 

Across the rest of the UK, the number of landlords selling their properties was significantly lower at 9%. 

Chief executive of TwentyCi, Colin Bradshaw, said fears of a capital gains tax increase was one of the reasons for the landlord exodus. 

Capital gains tax is a levy on any profit you make when you sell or "dispose of" an asset, such as shares or a second home.

The amount you can earn in profit before paying capital gains tax is currently £3,000. 

Mr Bradshaw said another factor was expected measures such as the requirement for a minimum emissions rating for rented properties by 2030.

HM Revenue and Customs Data shows private landlords' income fell by 4% from £49.4bn in 2020-21 to £47.44bn in 2022-23. 

One of the biggest falls in income was in London at 12.5%, followed by Scotland at 6.9%. 

Oasis have announced two extra Wembley Stadium shows after their tour sold out over the weekend.

Both Liam and Noel Gallagher, as well as Ticketmaster, came under fire over the initial release - as fans spent hours in virtual queues, and some tickets ended up costing more than three times as much due to surge ticket pricing. The government has launched a review into the practice after the backlash.

Announcing two further dates at Wembley Stadium in September next year, Oasis said there would be a staggered "special invitation-only ballot ticket sale strategy", devised "as a small step towards making amends for the situation".

They said it needed "to be made clear" that the band "leave decisions on ticketing and pricing entirely to their promoters and management, and at no time had any awareness that dynamic pricing was going to be used".

Applications to join the ballot for the September shows will be opened first to fans who were unsuccessful in the initial sale.

The band added: "Inevitably interest in this tour is so overwhelming that it's impossible to schedule enough shows to fulfil public demand," the band's statement continued. "But this ticket sale strategy will make the process far smoother for fans by reducing the stress and time it takes to obtain one of the hottest tickets of our time."

Read more on this story here:

Councils have called on the government to end the Right to Buy scheme for new council homes. 

One hundred local councils have warned the financial model for council housing finances is "broken", with a £2.2bn "black hole" in councils' dedicated budgets expected by 2028.

The councils have called for a complete overhaul of the Right to Buy scheme introduced by Margaret Thatcher in 1980 that allows council tenants to buy their council homes at reduced rates.

Deputy Prime Minister Angela Rayner, who  bought her council house through Right to Buy in 2007 , announced at the end of July the government had started to review increased discounts introduced by the former Conservative government in 2012 and will begin a consultation into the whole scheme this autumn.

Only 4% of homes bought under Right to Buy have been replaced, according to charity Shelter, while an estimated 43% of households living in private rented accommodation and receiving housing benefits are in homes bought under Right to Buy.

Read the full story here ...

Boohoo has caused upset among its loyal customers after cancelling accounts and charging them for returns. 

The online retailer has reportedly started closing some premier accounts due to "unusually high returns activity". 

Earlier this year, it started charging premier customers £1.99 for returns - but many shoppers have complained that they were not informed. 

At the moment, a premier subscription costs £7.99 a year, but it usually costs £12.99. 

Subscribers get unlimited next day delivery, paperless returns and access to exclusive discounts. 

Up until the changes, they were also able to return their items free of charge. 

One X user said she was "disgusted" after Boohoo deactivated her account. 

"Because I order multiple outfits for holidays and night outs or (because your sizes are all over the place) I order two sizes of most things... and because I don't keep everything and send them back, you deactivate my account," she said. 

"I've been a customer for 12 years. Disgusting." 

She wasn't the only one feeling that way... 

Others said they would stop shopping at the retailer altogether. 

The Money team looked through the Premier T&Cs - and it does not mention a limit on the number of returns that can be made, or returns at all. 

But, it does state that the company can terminate accounts at its discretion. 

"We may decide to terminate your Boohoo Premier account and you will be given a prorated refund based on the number of whole months remaining in your membership," it states.

"We will not give any refund for termination related to conduct that we determine, in our discretion, violates these terms or any applicable law, involves fraud or misuse, or is harmful to Boohoo's interests or another user." 

Boohoo isn't the online retailer to make this move. 

Earlier this year, PrettyLittleThing, which is owned by Boohoo, introduced a returns fee and started cancelling accounts that sent back several items. 

Consumer expert Helen Dewdney from The Complaining Cow said there was a growing trend of companies doing this, explaining that returns can be costly for those with small profit margins. 

"If a customer is costing a company more by returning more than they are keeping, then it is perhaps understandable why they are having their account closed," she said. 

But, she noted that where a company has offered unlimited free returns for a fee, without detailing any limits, then this could be considered as "very unfair and misleading".

"Under the Consumer Protection from Unfair Trading Regulations 2008 there is a fairness test," she added. 

"For a practice to be unfair under these rules, they must harm, or be likely to harm, the economic interests of the average consumer. 

"It could be considered that paying to have unlimited returns was part of the purchasing decision. Boohoo should be clearer in their terms and conditions as regards what the limit is, and should certainly be refunding the fee to anyone who has had their account closed." 

A spokesperson for Boohoo told Money: "We are committed to providing our customers with easy access to our products and upholding a fair return policy.

"However, like many other online fashion brands, it is important that we balance this with our responsibility to discourage repeat returners, which incur a cost for both the business and the environment."

The Co-op is experiencing its highest-ever levels of crime and abuse, with some staff members losing an eye or miscarrying as a result, one of its directors has told the House of Lords. 

Speaking to the Justice and Home Affairs Committee, Paul Gerrard said crime had risen by 44% across its stores and violence had increased by 35%. 

"That level of crime in our stores is 1,000 incidents every single day," he said.

"That is the highest level we have ever seen, levels of abuse are at the highest level we have ever seen and violence has dipped slightly in 2024, but it still a very high level." 

He suggested that organised criminals are behind the surge in shoplifting, saying people are "stealing to order huge volumes". 

In some cases, he said people had entered with wheelie bins and building bags to load up with stolen goods. 

"If one of my colleagues gets in the way, there will be a violent threat," Mr Gerrard added. 

"There might be a knife, there might be a syringe. I've had colleagues attacked with a medieval mace, we've had colleagues lose their eye, we've had colleagues miscarry.

"We spend money to keep the colleagues safe in the store. If an incident happens, then we take a number of measures."

Co-op has been a leading voice in campaigns against shopworker violence and is one of the funders of Project Pegasus. 

The group supports police forces in identifying the organised crime groups operating in their area. 

English football clubs are being warned they will face "enormous opposition" if they try to introduce dynamic pricing for match tickets - after two top sides in Spain confirmed they were adopting the controversial practice.

Valencia and Celta Vigo are believed to be the only European clubs to have embraced the system for this season's matches.

Although there are no suggestions dynamic pricing will be introduced into the English game, there has been growing concern clubs are vastly hiking prices, depending on the level of opposition.

It also comes after the huge controversy surrounding the sale of tickets for  next year's reunion shows by Oasis  - where dynamic pricing saw tickets worth £148 being sold for £355 within hours of release.

The Football Supporters Association (FSA) warned against "greedy owners in football" trying to "exploit supporter loyalty" in the English leagues.

In a statement, the FSA said: "With impeccable timing after the Oasis fiasco, voices in football have started to float the idea of infecting football with dynamic pricing.

"Never underestimate the potential for the most greedy owners in football to try and import terrible ideas from other industries to exploit supporter loyalty.

"Match-goers are already mobilising against the recent wave of price rises and attacks on concessions. Any underhand increases will be met with enormous opposition."

When you've forked out hard-earned money for a holiday abroad, the last thing you want is to be landed with an expensive phone bill at the end of it.

Brexit brought an end to the guarantee of free roaming for UK residents who visit countries inside the EU – but the good news is some providers still offer free services up to a certain point for travellers in Europe.

Here, we take a look at the UK's major phone providers and what they're offering customers when it comes to roaming across the globe...

Vodafone splits its roaming charges into four different "zones".

For pay monthly customers who took out their contract on or after 11 August 2021, how much you pay depends on which zone you're headed to:

Zone A - Ireland, the Isle of Man, Iceland and Norway - no extra charge

Zone B - Europe and EU member states (49 destinations) - £2.42 a day for customers without the Xtra Euro Roam plan

Zone C - 32 destinations including the US, Australia, Barbados and South Africa - £7.39 a day for customers without the Xtra Global Roam plan

Zone D - 75 destinations from Argentina to Uzbekistan and Vietnam - £7.39 a day

All charges are dependent on customers adhering to the 25GB fair usage limit.

Countries outside zones A-D are deemed "rest of world zones" by Vodafone - these include destinations such as Belize, Nepal and Angola. Data is charged for each megabyte (MB) used, with charges typically £1.20 per MB. 

Those with contracts before 11 August 2021 pay nothing for Zones A and B, and £6 a day for Zones C and D.

Unlike some other major providers, O2 hasn't brought back EU roaming charges for customers using up to 25GB data abroad.

That means both pay monthly and pay-as-you-go customers heading to its Europe Zone (more than 40 destinations) are free to call, text and use data as they would in the UK.

For anyone travelling further afield, the charges depend on what plan you're on.

Customers whose contract includes the O2 Travel Inclusive Zone can roam in 27 destinations outside Europe, including Australia, New Zealand, the US and southern American countries.

If it's not part of your plan, you can purchase a travel bolt-on for £6 a day which allows for data roaming in 63 destinations.

Contract holders with O2 Travel Inclusive Zone Ultimate can roam freely in 75 destinations outside Europe.

Three's Go Roam Europe service lets pay monthly customers use their data allowance in 49 destinations at a cost of £2 a day.

Those using the Go Roam Global service (22 destinations outside Europe) pay £5 a day while Go Roam Global Extra (92 destinations outside Europe) comes at a cost of £7 a day.

The charges apply to customers who took their contracts out on or after 1 October 2021 - there are no charges for customers who were with Three before that.

Three imposes a 12GB fair usage cap for all customers on a monthly contract when roaming abroad and 9GB for those on pay-as-you-go.

Anyone with an EE plan that began before 7 July 2021 will have EU data roaming included.

For newer customers, it costs £2.47 a day to use data roaming while travelling in its European zone, up to the 50GB fair usage limit.

For customers heading abroad to Europe for 11 days or more, it's cheaper to add on EE's Roam Abroad Pass which costs £25 a month (it can be cancelled at anytime, meaning you can scrap it after your holiday if you want to).

Customers heading to Australia, New Zealand, Canada or the US and wanting to use their data can select the Roam Abroad Pass as an add-on.

Alternatively, they can pay £6.74 a day for 500MB of data only in Canada and the US, £8.45 a day for 500MB in nine countries including Australia, India and China, or use 150MB of data for £8.45 a day in 45 other destinations including Brazil, Japan and Jamaica. 

Customers can use their phones abroad in 47 destinations without paying extra roaming charges with BT Mobile's Roam Like Home scheme.

If travelling outside Europe, BT mobile customers can use still use their phones but will need to buy a Mobile Travel Data Pass to access their data.

It costs £6 for 500MB that must be used within 24 hours. It covers 12 countries, including the UAE, US, Australia and Canada.

Giffgaff lets customers roam for no extra charge within the EU and other selected locations, with a 5GB fair usage cap. If this is exceeded, roaming is charged at 10p per MB.

Anyone travelling outside the 37 locations in the EU and beyond will have to add credit to their account to use their phones as normal.

They'll also be charged a rate per minute, text or MB, which varies depending on where you go.

Tesco Mobile

Until 2026, anyone travelling to one of Tesco's 48 Home from Home destinations can use their phone as normal with no extra charge.

Roaming charges apply for travel outside these countries - but Tesco will cap data usage at £40 for anyone who hasn't already put in a safety buffer, to avoid anyone coming home to a shockingly high bill.

Generally, data costs around £5 per MB and texts 40p, but costs for calls can vary.

Sky's Roaming Passport Plus lets customers access their UK allowances for £2 a day in more than 55 popular holiday destinations, including EU countries, the US, Australia and more.

The pass is valid for 24 hours. Unused data can be carried over but the £2 charge still applies.

Anyone heading to other far-away destinations will see out-of-tariff roaming charges apply.

If you've got a phone or SIM-only contract with iD Mobile you can use your UK monthly allowances in 50 destinations worldwide, up to 30GB.

Roaming has to be activated beforehand through your online account or the iD Mobile app.

Lyca Mobile

Anyone with a Lyca Mobile SIM can roam in the EU or use data in India as normal up to the 12GB fair usage limit.

What about e-SIMS?

Standing for "embedded SIM", e-SIMS are virtual SIMS that have been built into most newer devices like phones, tablets and smartwatches.

While perhaps not so useful inside the UK and for short EU trips, they could be a way to avoid those hefty out-of-tariff fees for travel further afield.

As they can be activated without a physical card, it makes them particularly useful for overseas trips as you can easily switch between several different carriers if you need to. 

To use one, you'll need to purchase an e-SIM for the country you're heading to and adjust the settings on your phone to allow it to be used.

There are many different providers offering e-SIM services at varying prices for different destinations, making them difficult to compare.

On a similar theme to our last post... The pension pot needed for basic retirement has risen more than 60% in the last three years, two thinktanks have found. 

This means the average pension pot required has risen from £68,300 in 2020-21 to £107,800 in 2023-24. 

Rising housing, energy, food and transport prices have all contributed to the increase, a study by the Resolution Foundation and Living Wage Foundation suggests. 

Researchers say a person requires an average income of £19,300 a year in retirement to sustain a "basic" standard of living. 

However, this figure differs depending on whether a person owns or rents their home, and if they live alone. 

For example, single home-owning pensioners need  £13,500 annually while pensioner couples that own their home need £20,600. 

At the moment, the full rate of the state pension is £221.20 a week, or £11,502 a year.

The rest of the "basic retirement" fund would need to come from other sources such as a private pension with a balance of £107,800. 

To reach the amount needed in retirement, the research found a person working full-time on the Living Wage (£11.44 an hour) would need to contribute 9% of their earnings a year from the age of 25 to 68. 

State pensions could rise by more than £400 next year, according to reports.

The triple lock means pensions rise each April by whatever is highest out of inflation, average wage growth and 2.5%

This year that looks set to be wage growth, with figures set to be released next week.

The Treasury's internal working calculations, seen by the BBC, show this would lead to a £400 annual increase for anyone on the full state pension.

That would take the full state pension to around £12,000.

Pre-2016 retirees who may be eligible for the secondary state pension could see a £300 per year increase.

None of this has yet been confirmed but the Office for Budget Responsibility's spring forecast of earnings growth was 3.7% for the triple lock reference period - which all ties in with the suggested hikes above.

Any decision on a pension increase will be made by Pensions Minister Liz Kendall ahead of October's budget.

Yesterday, Chancellor Rachel Reeves reiterated the government's backing of the triple lock - which this year resulted in a £900 rise.

The Treasury has been contacted for comment.

Keep scrolling for news of a popular European country clamping down on Airbnb and this week's Cheap Eats

By James Sillars , business news reporter

A US-led stock market sell-off is hitting values on this side of the Atlantic for a second day.

The main worry, which was first seen a month ago, continues to be the performance of the world's largest economy.

Weaker than expected US manufacturing data sparked drops in oil and commodity costs, which bled into share prices.

The big losers, however, were tech shares.

Analysts said a decline of almost 10% in AI chipmaker Nvidia's stock was down to some profit-taking on fears the best news for the company's outlook was in the rearview mirror.

Brent crude dropped almost 5% to $73 a barrel.

The FTSE 100 largely mirrored Tuesday's declines at Wednesday's open, falling 0.8%.

Energy and mining stocks were among those worst affected again.

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