Glenford Financial, a small-business funding broker in San Angelo, TX, explains how to write a business plan for a loan application: lead with the request and use of funds, show repayment capacity, support projections with stated assumptions and local data such as Census County Business Patterns, and attach the documents a lender expects. A plan helps a request but does not ensure approval.
| Lead with | The amount, the purpose and how it will be repaid |
|---|---|
| Core numbers | Use of funds, historical financials, projections with assumptions |
| For startups | Break-even sales, owner investment, personal financial statement |
| Free help | ASU Small Business Development Center, San Angelo, TX |
| Remember | A plan supports a request; the lender decides |
What does a lender read a business plan for?
A lender reads a plan to answer four questions. Will the money be used for something that produces revenue or saves cost? Can the business carry the payments from its cash flow, with room for a bad month? What happens if it cannot, meaning what collateral or guarantees stand behind the request? And does the owner understand the business well enough to make the projections credible? Every section should help answer one of those.
Do you need a full plan?
Not always. A routine request from an established business, such as equipment financing for a replacement machine, may need only financial statements and a quote. A plan becomes important when the money funds something new: a startup, an expansion, a second location, a new product line or a business acquisition. In those cases the lender is lending against the future, and the plan is how you show what that future looks like.
The sections, in the order a reviewer reads them
- The request. One paragraph: how much, for what, over what period, and the source of repayment.
- Use of funds. A table of every dollar, matched to quotes or bids.
- The business. What it sells, to whom, since when, and its legal structure and owners.
- Market and customers. Who buys, why they will keep buying, and who else sells to them.
- Operations and management. Who runs what, and their relevant experience.
- Financial history. Two or three years of results, or the owner's track record for a startup.
- Projections. Monthly for the first year, annual after that, with every assumption written out.
- Repayment. How the projected cash flow covers the new payment and existing debts.
- Collateral and guarantees. What you are offering to back the request.
- Appendices. Tax returns, bank statements, quotes, leases, licenses and résumés.
A template outline to copy
Use these headings as a business plan for loan template, and keep the whole document short enough to read in one sitting:
- 1. Funding request and summary (half a page)
- 2. Use of funds table
- 3. Company overview and ownership
- 4. Products, services and customers
- 5. Local market and competition
- 6. Management and staffing
- 7. Historical financial summary
- 8. Projections and assumptions
- 9. Repayment and debt schedule
- 10. Collateral, guarantees and owner investment
- 11. Appendices
How to write a business plan for a loan for a startup
Without history, the plan has to carry more weight. Three things matter most. First, break-even: the monthly sales needed to cover fixed costs and the new payment, which you can work out with the steps on the startup loan payment calculator page. Second, owner investment: how much of your own money goes in, because lenders look for owners who share the risk. Third, the owner's background: experience in the same trade is the closest thing a startup has to a track record. Expect a lender to ask for a personal financial statement and a personal guarantee.
Using local data honestly
The market section is stronger with public figures than with adjectives. The U.S. Census Bureau's County Business Patterns counts employer establishments by industry and county each year. A dental practice planning to open in Tom Green County could note, for example, that the county had 40 dental office establishments in 2023, 37.5 percent of them with fewer than five employees (County Business Patterns 2023), and then explain why its location or services will still draw patients. Cite the source and year, and do not stretch a figure to say more than it does.
Projections a lender will believe
- Build revenue from units: customers, jobs or covers times average sale, not a growth percentage
- Show the assumptions next to the numbers, so a reviewer can change one and see the effect
- Include a slower case and show the business still makes its payments
- Tie costs to real quotes, the lease and current payroll
Mistakes that weaken a plan
- Asking for a round number with no use-of-funds table behind it
- Projections that start at full capacity in the first month
- Leaving out existing debts or merchant cash advances
- A market section with no numbers or sources
- A plan for a bank loan that ignores collateral and guarantees entirely
Getting help with the plan
The Angelo State University Small Business Development Center, 69 N. Chadbourne St., San Angelo, TX 76903, provides SBA-funded advising and can review a draft plan. It has no connection to Glenford Financial.
Where Glenford Financial fits
A good plan makes a request clearer, but it does not ensure approval; the lender decides. We can help you match the plan to a funding type and introduce it to lending partners. See term loans and how it works.
By Glenford Financial · Updated