How to Write a Business Plan for A Loan
Thinking of how to write the perfect business plan to wow the lender and get your loan approved? Well, you are not the only one. Whether you are an existing business looking to expand, or a budding entrepreneur, this is a challenge many business owners face.
Since a business plan can help determine your business loan eligibility, it must be well-executed and lay down your objectives.
Here is a guide to writing a comprehensive business plan.
Write an overview
Your business plan should start with a summary of your enterprise. It includes the key elements of your plan, your business goals, and how you intend to achieve them. Your business proposal should give the lender a clear picture of your venture right away.
Outline the business
Now, answer these questions for the lender:
- What problem will your business solve?
- How is your product or service relevant?
- What makes you different from your competitors?
It should inform the lender of your operations and future goals. Talk about the solution it offers in great detail. Since it is a part of your business loan application, the idea is to convince the lender that your business is worth investing in.
Develop an execution strategy
Now it’s time to describe the business opportunity you’re looking to capture and how you will execute it. Develop an exhaustive business strategy to resolve any apprehension on the lender’s end. This should also include the marketing approach you plan to adopt to create awareness about your product. Your market research has to be excellent and precise to support your business decisions.
Provide financial calculations and projections
Next, paint a financial picture for the lender. Include your financial assumptions and sales projections for the next three to five years. Also, state how much money you need to borrow, how you plan to spend it, and when you can repay it.
These factors are essential for the lender to decide if you’re eligible for the loan. Plan your finances and estimate monthly payments using a business loan EMI calculator before applying for the loan.
Final draft and revisions
After you have all the necessary details and calculations ready with you, begin with the final draft of your business plan. You can also seek the help of a business plan writer. Furthermore, it is vital to revise the completed draft to ensure you haven’t missed any vital information.
Check out for calculation errors, grammatical and spelling mistakes. Eliminate any repetitive or misleading information. This step will ensure the accuracy and clarity of your business plan.
Also, keep your financial paperwork, including balance sheets, P/L statements, etc., duly audited to attest to your business’s financial fitness. With a solid financial profile, you can qualify for competitive business loan interest rates.
The bottom line
Writing the perfect business plan is all about excellent research and logical portrayal of your ideas. While applying for a loan, it can factor heavily in getting your loan approved at desired business loan interest rates. So, spend adequate time polishing your final draft that woos the lender.