How to Write a Business Plan for a Loan

Written by Dave Lavinsky

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.

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:

  • term loans
  • lines of credit
  • commercial mortgages
  • SBA loans
  • 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.

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your business plan and financial model in hours.

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.

  1. 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.
  2. 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.
  3. Be sure to keep your tone professional and business-like.
  4. Include detailed financials, market analysis, and other crucial information.
  5. 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.
  6. 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.


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