What this form is for
This is the comprehensive business plan document that SBA-approved lenders and commercial banks require when you apply for startup capital or expansion loans exceeding $50,000. You will use this to demonstrate market viability, management competence, and realistic financial projections that prove you can repay the loan.
Before you start
- Three years of personal and business tax returns if your company is already operating, or personal returns only for startups
- Current balance sheet and profit-and-loss statement dated within 90 days
- Detailed list of how you will spend the loan proceeds, broken down by category such as equipment, inventory, working capital, or real estate
- Market research showing your target customer demographics, competitor pricing, and realistic sales estimates
- Resumes for all owners and key managers highlighting industry experience and relevant credentials
Step-by-step
1. Complete the executive summary last, even though it appears first. This one-page overview distills your entire plan and should be written only after all other sections are finalized.
2. Draft your company description including legal structure, ownership percentages, location, and a brief history if you are an existing business.
3. Write the products and services section explaining exactly what you sell, your pricing strategy, and what makes your offerings competitive or unique.
4. Develop your market analysis by identifying your target customer profile, total addressable market size, and direct competitors. Include data sources for all claims.
5. Outline your marketing and sales strategy showing how you will attract customers, your advertising budget, sales channels, and customer acquisition cost estimates.
6. Describe your management team with specific roles, compensation, and gaps you plan to fill. Attach full resumes in an appendix.
7. Complete the use of funds table showing exactly how much you need and the specific allocation for each expense category. This must match your loan request amount precisely.
8. Build your three-year financial projections including monthly cash flow for year one, then quarterly for years two and three. Include income statements, balance sheets, and cash flow statements with footnotes explaining major assumptions like growth rates and gross margins.
9. Add supporting documents in appendices including lease agreements, supplier quotes, letters of intent from customers, licenses, and insurance certificates.
10. Select your governing state now, as certain projections and legal structure details will need to reflect that state's regulations and tax environment.
What lenders look for
- Banks reject plans with unrealistic revenue growth, so keep year-one projections conservative and base all estimates on verifiable industry benchmarks or actual historical performance.
- Your debt service coverage ratio, calculated from your projections, must exceed 1.25, meaning your projected operating income should be at least 125% of your annual loan payments.
- Avoid rounding all numbers to neat thousands; precise figures with supporting documentation signal thoroughness and credibility to underwriters.