What are a bank's requirements for business plans? The bank's requirements for your business plan might vary a little branch to branch, but for the most part lending institutions registered in the U.S. are looking for the same basic elements. Remember that banks themselves are risk-averse institutions – the role of the Small Business Administration is to partner with banks and compel them to support entrepreneurs despite their inherent aversion to taking the chance on small businesses. So ultimately the bank's decision to lend to you or extend a line of credit to your small business has much more to do with the collateral you can provide (equipment you own, or the mortgage on your property, for example) and your personal credit standing as the debtor than on the bank's belief in the likely success of your business. In other words, while the business plan is vital, your ability to use it as a tool to get funding has more to do with you personally than with the document itself. That said, the components that any bank will demand include the following:
• Executive Summary outlining your objectives and benchmarks
• Use of Funds table showing capital required and its intended application
• Market Analysis detailing opportunity, market need fulfilled, industry scope, and competitors
• Marketing section speaking to how your implementation strategy will drive sales
• Executive bio(s) and profiles of key advisors or anyone else tied to the loan
• A complete financial pro forma model showing 3 years of revenues and expenses
The bank's requirements can be fulfilled by any business plan template, software program, or planning resource guide that is filled out completely and with close attention to detail. You cannot take a partially completely or weakly reviewed business plan into a bank and expect to get a loan no matter how good your credit is. Presentation matters hugely and you have to have a detailed, error-free business plan in hand in order to get the reception you need. If you're not comfortable creating the business plan you need yourself, there is help. MasterPlans.com has been working with entrepreneurs and small businesses for almost a decade and has created more than 8,000 successful business plans for banks and investors alike. Call 877-453-2011 to speak with a consultant today about your bank's expectations and what we can do to help.
