Preparing a business plan for the bank

Do you want to generate a certain level of sales? How to prepare a winning business loan proposal Share Preparing an effective, well-documented commercial loan proposal is the first step toward getting the money your business needs from a bank.

sample business loan proposal letter

In fact, when confronted with the kind of growth projection required to interest a venture capitalist, a banker may be turned off. Strategies, Mission, Objectives and Milestones: Marketing Strategies, Advertising and Promotion; Sales forecast and cost of sales; Distribution, Plans for Growth — Define your milestones with dates, budgets and specific responsibilities.

The Industry and Market Analysis: Describe your target market and segment you will focus on, including market demographics, market growth, trends and forecast.

Bankers can usually be counted on to want minimal, if any, input into how the business is run. Create charts and graphs to demonstrate increases in sales or decreases in costs.

What you will do if your business is unable to repay the loan. You should let your lender know that the money will be well spent and there is an opportunity that you would want to tap.

Business plan for bank loan example

What is the benefit you are selling? Their natural tendency is to be conservative. Most bankers will want to see cash flow statements as well as balance sheets and income statements for the past three or so years. Also include any opportunities and threats that may potentially affect your progress, as well as any rules and regulations your market has to follow. Things like rent, utilities, marketing costs and any other regular expenses. Meet planned targets and deadlines. It's especially important for brick—and—mortar companies that operate a storefront or have a warehouse. Some key points to focus on are: 1. Bank loan applications can be almost as long and complete as a full-fledged business plan. On the other hand, a banker is likely to be quite interested in seeing a contingency plan that will let you pay back the loan, even in the event of a worst-case scenario. Execution strategy Lenders would also want to know how you plan to execute your idea once you get the money. Things Needed Accounting records from past three years Tax returns from past three years Inventory report.

Also include any opportunities and threats that may potentially affect your progress, as well as any rules and regulations your market has to follow. And roughly how many of them are there? Keep it to just one or two pages and be as clear and concise as possible.

Consider how you will manage the start up phase when outgoings can exceed income for some time.

preparing a business plan for the bank

Is your business incorporated? For example, if the problem is that parking downtown is expensive and hard to find, your solution might be a bike rental service with designated pickup and dropoff locations.

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How to write a proposal for a business loan