Your Business Plan
Lenders are more likely to approve financing when your plan defines potential risks, highlights your managerial skills, and includes clear financial projections. Plans should outline the following:
- Executive Summary
- Company Profile
- Products/Services you provide
- Marketing Plan
- Operations Plan
Top 10 Things Lenders Focus on when Reviewing your Plan
- Financing Request
Your financial request should be clear about the amount you need and should define how the money will be spent. Ask yourself: Would you risk your own money on this business?
- Business Description
When creating your business description, define your products or services and describe your market. You should also include an outline of your business objectives.
- Management Expertise
Highlight your business management expertise and experience in the following key areas: products or services, marketing and sales, and finance.
- Financial Plan
Map your financial plan by defining your start-up costs and your projected revenues and expenses. This will help you decide how much equity you will need to contribute. Ask yourself: Can I repay the loan?
- Cash Flow Projections
You’re more likely to get approved for a loan if you can demonstrate sufficient cash flow. Your projections should be proven or supported in your plan, along with your ability to make your monthly loan payments. A two year cash flow plan may define an expected scenario, a slow-start, and an aggressive sales.
- Contingency Plan
Things don’t always go as planned, so it helps to identify potential risks and how you will mitigate each risk. Your plan should include risks such as: economic, legal, technological, social, political, and environmental.
Loans can be secured by your assets such as: real estate, equipment, vehicles, inventory, and cash.
- The Marketplace
Define your target market and consider the potential risks of your market such as: customers, competition, suppliers, and industry trends.
- Market Demand
Evaluate your market demand by asking yourself these simple questions: Why will people choose me over the competition? What is the demand for my product or service? How do I plan to reach customers?
- Third-Party Review
Ask a Business Banker to review your plan. They will help you identify gaps in your plan for improvements or clarification.