Business Plan For A Loan
“It’s OK to be optimistic if you can justify it,” Allen says.A business plan typically looks out over three to five years, detailing all of your goals and how you plan to achieve them. If you’re looking for outside funding, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets.If you’re applying for a loan or looking for investors, a business plan shows you’re prepared and have fully vetted your business idea, says Craig Allen, a financial advisor who teaches business plan writing classes at Southern New Hampshire University. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.“If you have no financial forecast, which is part of the business plan, it’s very difficult to show the bank how you are going to repay the loan,” Allen says. For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and increase its sales by 50% over the next three years. [Back to top] This section provides a snapshot of your small business.Your business plan is useful for you and your employees, but it can also be crucial for obtaining funding, because banks and lenders may want to see one before they decide to fund your business.A basic business plan outline could include the following: Business Plan Center to access a step-by-step tool to create your own business plan.“In general, you don’t want to stand out in a negative way by being too optimistic.” You want to show that your business can generate strong enough cash flow to cover the regular debt payments on a loan.But you should also address the various risk factors of the business, Allen says.Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.This section can also highlight the strengths of your business and focus on what sets your business apart from your competition.