Business Plan Development
Business Plans to Secure Bank Loans
Business Plan Development – How We Help
You may be launching a new business or expanding an existing one. One thing is certain, you will need to finance the business. Often this means asking a bank or finance company for a business loan or perhaps a line of credit.
When seeking a personal loan or a new credit card the bank can refer to your personal credit history and credit score. However, for a business loan, the bank will be looking for a lot more detail in order to identify the potential of your business venture – and the risks. This is especially true if you are a new customer to the bank.
The bank or finance company will ask you to submit a business plan to back-up your application for a loan. Your plan has to include some key elements to secure approval for the business loan.
8 Key Elements of a Business Plan for a Bank Loan
Executive Summary
This section is key to a successful business loan application. This is what the loan officer or bank official will read first. It has to be concise but at the same time compelling – making a strong case – so that people will read on and consider your full application.
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Market Analysis
It may seem obvious, but the bank needs to know the name of your company and its legal setup. A bank will have different requirements and considerations depending on if you are a sole trader, partnership or you have incorporated your business.
The bank also wants to know how you will make a profit. If your business is new the bank wants to know what you intend to do. If you have been trading for a while, how has your business performed and how exactly will expansion, financed by a loan, enhance your business and profitability?
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Products and Services
This is where you explain to the bank just what you will be offering and how it will differ from competitors. You will include any regulatory environment (specific laws, regulations or licensing requirements) and how you intend to meet them.
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The Market
How do you define the market where you will operate, by geography, by customer type by product category – perhaps a combination of the three? Your business plan should include an estimate of the size of this market is (in dollars) and what you forecast your share to be. Be sure to quote market figures from reputable (and credited) sources.
Who is your competition in your chosen market? How will you differentiate your offering from theirs? The bank wants to know your pricing strategy – higher or lower than competitors? Do you intend to take market share from competitors or will you be expanding the overall market?
The bank will be interested to know of any important trends in the market, is it steady or growing? Do you have reliable statistics to support your view? Why is now the right time to enter the market? Include these key points in your bank loan business plan.
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Your Marketing Plan
This needn’t be a detailed implementation plan, but you do have to set out your marketing budget and strategy. You will clearly explain how you will earn revenue from selling your product or service. What channels will you use to promote your business (and at what cost)? What is your plan to facilitate transactions – a website with e-commerce or wholesale contracts with suppliers? The bank wants to know how (and when) you will collect payments. If your business is seasonal you will include in your business plan an indication of how you will spend your budget over a year.
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Financials
This section of your business plan will demonstrate to the bank you will deliver enough profit for your needs and to repay the bank loan. You should provide a statement of your business’ current financial position plus details for at least the first year of operation. Ideally the projections should cover the total duration of the loan, but a minimum of 3 years. Take care to ensure that the figures included in your statements and projections match those you have mentioned elsewhere in your business plan. Three essential elements in this section are:
Income statement ƒ
Cash-flow projections ƒ
Balance sheet
All projections involve assumptions. Make sure your projections in the business plan are realistic. If they are clearly ambitious, give good reasons why you have been optimistic and back-up with facts and history wherever possible.
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Key Personnel
In all businesses, but especially with small businesses, staff are key to success. The bank wants to know that you have the right people for success. Both start-ups and growth strategies put lots of demands on staff who have to be skilled, knowledgeable and flexible to cope. Identify the important team members with the qualifications, experience and responsibilities. Your team may not yet be complete. If that is the case, explain in your business plan how you will recruit for key positions and for general personnel.
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Operations
Your business plan should include the proposed location of your business – in what type of premises – and what capital equipment and facilities you require. You need to include all major expenditure you foresee for the adequate operation and growth of your business. What is the intended lifetime of equipment and facilities? Will you be able to expand physically at this location. If this new business venture will run alongside an existing business, explain how you will keep them separate in order to identify true profitability from each.
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Summary
There are many pitfalls in creating a business plan to support a loan application from a bank or finance company. The bank wants to determine if your plans and strategies are sound. They want to clearly see you will make enough profit in order to repay the loan. Also, they need to assess the risk that your plan will not work out.
To succeed in getting the loan approval you must demonstrate a realistic and consistent plan, worked through with reasonable figures. When you make assumptions you have to explain the basis for these and quote external, reputable sources whenever possible. The bank wants to minimise the risk of default on any loan they advance. You can do this by providing external, supporting information.
The Next Steps For Your Business Plans to Secure Bank Loans
To maximize your chance of success in securing a loan for your business consider a professionally produced business plan from BSBCON. Our experienced consultants will ask the right questions and ensure that the information gleaned from you is presented consistently across all sections of your plan. Our team can do the external research to back-up your assumptions and projections. We will ensure that your business plan meets all the requirements that the banks impose. Finally, your bespoke business plan will be presented in a professional, eye-catching format that will support the image and potential for success you want to project for your business.
Contact us for a quotation for a professional, winning business plan to help secure your bank loan.
How Much Does Our Business
Plan Development Cost?
Basic
$1,950
Standard
$2,250
Premium
$2,500
Elite
$4,950
Business Description
Unique Selling Point
Market Analysis
Marketing Strategy
Management Team
Business Sustainability
Capital Requirements
Operational Strategy
Mission Statement
Vision Statement
Landscape Deck
Company Culture
Core Values
Independent Plan Review
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