How to Prepare a Business Plan for Small Business Loan
Are you looking for a business loan to start or expand your enterprise? If yes, you need a business plan to convince your lender to give you the loan you want. Banks and financial institutions demand a business plan before they can issue you a line of credit.
This plan will help them understand if the business idea is sustainable or not. So, you must draft one in the right manner. We will discuss some core aspects of the business plan. Let’s get right into it.
Vital Components of a Business Plan
Below are some crucial components that you must include in your business plan. You can choose to add anything else which you believe can help sway the lender’s decision in your favor.
Cover Page
The business plan is a document that should show your professionalism. Banks and lenders consider this document seriously if it has a cover page and table of content. The cover page should include your:
- Company Name
- Logo
- Contact Details
If you are sending your business plan digitally, make sure the table of content has the link to the right sections. It will make it easy for banks and lenders to navigate through the document.
Summary
Before you move on to the main content, there should be a summary to tell the reader what is in the business plan. It should highlight the key takeaways from your entire report.
Company Description
You need to add the relevant details about your company, such as the mission and vision. Also, you need to mention the key members of your company and the legal structure.
Plan and Analysis
The plan should have the relevant gaps in the market that you look forward to capturing. It should tell more about the market you are operating in with a proper analysis.
Leadership
The next part is about the company’s top management and their role in the company. It should tell about their experience and the department they are managing.
Goods/Services
This part of the business plan is where you tell the lenders about what product or service you are offering. It should tell about your customer base, how you have acquired them, and what ways you use to retain them.
Financial Details
You need to add the financial projections regarding the company’s current and forecasted financial situation. It should convince the lender to approve the loan for your business.
Funding Request
The funding request is the most imperative part of the business plan. You need to tell:
- The amount you need
- Use of the money
- Ways to pay back the lender
- Strategic plans for the future
There should be a proper request for the funds for the lender to know the exact amount of money you require for your business.
Prepare a Business Plan for Yourself
Writing a business plan is one of the first steps in the long journey ahead of getting your business loan. You should address all the points mentioned in this article to ensure you have a comprehensive business plan that makes the loan process easy.