A business plan is a crucial piece of any SBA loan application. It’s what lenders will look at most closely when approving a loan, so it should be organized, well planned and persuasive. Set yourself up business plan loan success by learning how business plans impact loan approval and which critical elements to include.
Many entrepreneurs talk about their business plan — whether it’s stored only in their minds or scratched on napkin — but truly savvy business owners take the time author a well-written one. So what exactly is a business plan? It should provide an overall summary of where the business is headed, plans for growth and projected revenue. Business plans take time, research and due diligence, but the reward is organized and actionable steps to grow your business.
How does a business plan help you get an SBA loan? Having a solid business plan with clear ideas makes it easier it is for banks to see that your business will be successful, and therefore that you’ll be able to repay the loan. Writing a business plan can sound intimidating, but even a thorough plan only needs to be seven to ten pages. The 10 Elements of a Business Plan Whether you’re writing a business plan as a part of your SBA loan application package or not, there are 10 essential elements to include.
Here’s a look at what those sections are as well what’s included in a complete plan. Cover Page and Table of Contents The cover page and table of contents of your business plan is a great way to show your lenders that you’re a professional and organized businessperson. What’s included in the cover page and table of contents? Your contact information as the owner. A standard table of contents with page numbers. Executive Summary As the first thing that lenders will read in your business plan, the executive summary is the most important section. Here, you will introduce yourself to potential lenders or investors, so the overall tone should be professional, but it should also paint a positive picture about the business.
What’s included in the executive summary? An overview of the business idea, what problem it solves for consumers and how it fits into the market. How much the business will cost and how much funding you’re seeking. Plans for growth and why the business will be successful. Company Description The company description is a closer look at how the business will function. This information is a good opportunity to show lenders you’ve thought through the day-to-day details and have a solid strategy in place.