Making that Killer Business Plan to Get Loan Approved
Updated: Aug 31, 2022
Getting business loans approved can be challenging. But once you have the right financing partner and an excellent business plan, not only is your loan application a cinch for approval – it'll also set you off the road towards a flourishing business!
If you're a startup company and you need to purchase hard assets to run your operation, you would need business financing. If you want to expand your business or need an extra budget to fund your marketing and sales projects, you'd probably need to take out a business loan. A business loan can make all of your business goals come to fruition.
For your business funding needs, Wiseteam Consulting is one of the industry's top leading financial firms that help business owners achieve the right financial solutions to meet their business needs. Offering business term loans in Wyoming and surrounding areas, the financial firm provides an easy and convenient loan application process that aims to expedite financial goals and turn them into a reality.
Having a good business plan on hand increases your chances of getting your loan application approved. But a lot goes into having a well-thought-out business plan, more than securing funds for business expenses.
How important is a business plan?
Business planning has a lot to offer. The whole company structure and operation revolves around the feasibility of a business plan. The business plan is a roadmap of strategies for that smooth navigation into the commercial jungle, so businesses come out at the top of their game.
Here are some of the top benefits of a business plan.
Increase chances of loan approval
A business plan is valuable in getting loan applications approved. This planning document typically contains an expense sheet and a financial projection for the next succeeding years to show lending firms or investors how viable or profitable your business is. Funding institutions would like the assurance that your strategies and projections are measurable, realistic, and feasible to protect their interest as investors or capital funders.
Marketing and Sales Roadmap
Consider a business plan document as a blueprint outlining all the business's objectives and strategies. These strategies took the form of marketing and sales planning that provides the steps and the activities that match the business's mission and vision for accomplishing the company's goals.
Provides Focus and Structure
What all businesses need is a clear direction. And that's what a business plan does. It provides the clarity and alignment required within a company's organization so that everyone in it is focused on what their roles ask of them to do to contribute to achieving the company's objectives. It helps keep everyone on track with the business's targets and milestones.
How to create that loan-effective business plan
There are no hard and fast rules when creating an effective business plan to get loans approved. Although there is no strict format, a strong business plan for a loan application should contain at the very least the following elements.
The executive summary is the make-or-break section of a business plan since it is the first thing lenders come upon. The executive summary provides an overall snapshot of the business plan. It contains a brief background about the company and its product and services, a short statement about how much funds your business needs and why there is a need for a loan, and a summary of the strategies to be worked out, including the business's historical, current, and projected financial information.
Note that the executive summary portion should be written in a way that's concise and interesting to hold on to the reader's attention and make them interested enough to check out the rest of the business plan.
Company and product description
This section describes in detail what your business is all about. This includes details such as the business structure, how long it's been in operation, the size of the workforce, any accomplishments or milestones that make your business stand out from the competition, and products or services. The products or services part should contain a detailed description of the offered products or services, including the prices and any added-value services.
The marketing analysis section reflects the market research conducted to prove your business's viability. This section typically includes the target market and your identified competitors. It also highlights the niche of your business, the strengths and weaknesses of the industry that you're in, and how you plan to counter any potential business struggles.
This is where you present your strategies to achieve your business's goals and show where and how the loan will be allocated or how you plan to repay the loan through sales revenue-generating tactics. A marketing plan is usually designed to engage potential customers and turn them into buying customers. This section should be specific and realistic. For instance, there should be an indicated cost on how much is needed to implement a sales project.
Be specific when listing how much advertising strategies and other sales and marketing methods cost. Also, identify through what channels or how you intend to reach your potential customers.
The financial plan section will tell your lenders what you plan to do with your loan and how to repay them. It should also show how financially stable and feasible your business goals are.
A financial plan for startup businesses includes projected startup costs, estimated operating expenses, and capital expenditures. It should also provide financial projections consisting of
revenue and cash flow statements, capital expenditure budgets, and balance sheets.
For existing businesses, provide financial statements that include sales revenue, cash flow, profits and losses, and financial projections. Financial projections should be laid out ideally in three to five years for both startup and existing businesses. Lenders or investors would want to see the short and long-term financial projections to satisfy how measurable and practical the overall business plan is.
Remember to be accurate and honest with all your numbers because a business's integrity and trust are also at stake within these documents.
Making that killer business plan to get your business loan approved can be challenging but certainly not impossible. A business plan is one step towards achieving business goals. Next, you need to have the right financing partner, such as Wiseteam Consulting. So, put on a planner's hat, and start coming up with plans for your business's success – the right way!