Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Law, Transactions, & Risk Management
  • Business Transactions, Antitrust, & Securities Law

Business Plans for Loans - Explained

How to Write a Business Plan for a Business Loan

Written by Jason Gordon

Updated at April 15th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

Using a Business PlanCrafting a Business Plan to Obtain a Loan

Using a Business Plan

The business plan describes the current activities, aims and objectives, and how they are going to be achieved over a set period of time. The primary sections of the business plan are:

  • Concept
  • Marketing
  • Management and Operations
  • Financials

The basic premise is to show:

  • Who you are.
  • What do you make or what service you provide (what is the value proposition?)
  • How you make it.
  • How you sell it.
  • The value exchanges that take place. (What money goes where.)
Back to: Business Transactions

Crafting a Business Plan to Obtain a Loan

To craft an effective business plan, you have to focus on the audience. Appealing to a commercial lender is far different from appeal to an equity investor. A lender is going to be concerned with the ability to service loan payments, risk of default, and securing the loan with business collateral (taking a security interest in business assets).

  • Break down the loan request into its essential elements
    • Show how much is required for inventory, supplies, signage, prepaid expenses, working capital, etc.
    • Demonstrate the availability of capital and other security for the loan.
  • Cash Flow
    • Your financials should demonstrate that you will have enough cash flow to repay the loan amount.
  • Amount of Loan
    • You will need to lay out in detail the requested loan amount and the use of the capital.
    • As previously discussed, lenders prefer for loans to be used to purchase collateral, such as equipment or real estate.
    • Think strategically, as some loan amounts are difficult to obtain:
      • Because of internal bank structuring, loans in the range of $20-50K are the most difficult to get.
      • The consumer division generally services personal credit or consumer loans up to $20K.
      • The commercial division is most focused on loans of $100K or more, so you have to work harder to peak their interest in a smaller loan or line of credit.
    • Try to break down your debt needs into smaller phases until you can secure the money from personal credit sources.

Back to: Entrepreneurship

buisness plan loan loan proposal

Was this article helpful?

Yes
No

Related Articles

  • Tender Offer - Explained
  • White Knight - Explained
  • Management and Information Rights - Term Sheet
  • Liquidation Preference in Subsequent Financing Rounds - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand