5 April 5 MINS READ
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You need a business plan when you are seeking funding for your company. Without one, obtaining an SBA loan will be nearly impossible. That's not all the importance there is to a business plan though. A business plan will work together with your financial accounts to guide your business to success long after your loan has been granted.

Writing a business plan doesn't have to be so difficult. We'll walk you through all you need to include in your business plan, in this article. So take a deep breath and let's go!


SBA loans necessitate extensive paperwork on both your business and personal finances. Depending on the type of SBA loan you apply for, you'll need to gather your previous tax returns, bank records, and numerous application papers. Aside from obtaining information about the past, your lender will want to know about your business's future plans. They'll want to know how the loan will be used and whether your future cash flow estimates show that your business will be able to make loan payments.

That's why you need a business plan. A business plan is a living document (meaning it can and should be updated as your business grows) with a three- to five-year outlook on your business. It should include an overview of your business's future plans, as well as revenue projections. You'll need to create a business plan in addition to all of the other documents to complete your loan application. Your business plan will not only describe your company to your lender, but it will also include financial forecasts that the bank will use to assess if you qualify for the loan.


When writing a business plan, you should include the following features:

1. Executive Summary

This should come after the cover sheet and table of content. The executive summary is the most important part of your business plan. It is the first point of contact and the first impression a lender gets of your business. You had better make it worth it.  The executive summary explains where your business is now and where you want it to go. It should emphasize your company's strengths and why you think it will succeed. Even though this section is the first in your business plan, you should prepare it last to ensure that the rest of the information in the plan is appropriately summarized.

2. Business Description

Consider the company description to be your extended elevator pitch. The company description provides a more detailed look at how your business will operate. This information might help you demonstrate to lenders that you've considered the finer points of your business and have a solid strategy in place.  You should include your business name, mission, vision, structure, strategic partnerships, location, goals, and competitive advantage.

3. Product & Services Description

In this section, make sure to clarify how your product or services fills a market need, as well as the demographics of your target market. You'll need to explain the problem you solve for your customers as well as the solution you're selling.

Finally, if there are currently any significant competing products or services in the market, it may be worthwhile to list them here. Explain how you're distinct, what your strengths and limitations are in comparison, and how you'll stand out from the competition.

4. Market Analysis

Here, you will describe your market knowledge and experience, explain the market's economics, including its current size and anticipated expansion, and establish your price system and the influence it will have on your revenue. Include any market research you've done as well as your conclusions. You should also consider how you will adhere to any government regulations or standards that apply to your company.

5. Marketing & Sales Plan

In this section of your business plan, you'll define your marketing strategy, sales strategy, and other operational details.

You should talk about your sales channels, general marketing activity, price strategy, and target market position. This will most certainly change over time, but anything that explains how you'll sell and advertise your products and services should be included.

6. Organization & Management

You can create an organizational structure chart, including profiles of your management team and ownership information. It's critical to clarify the backgrounds and qualifications of those who make choices for your firm. Describe your company's divisions or departments, how they function inside the organization, and who is in charge of each department. Don't forget to include salary compensation, perks, and bonus schemes to demonstrate how you will retain quality personnel.

7. Funding Request

Here, you describe your financial needs. What assets do you need to buy to achieve your plan's objectives? How much do you think you'll need? What will be done with the proceeds? For the lender, this is important information. They want proof that you will be responsible with the loan revenues and that you have a plan in place to repay them. Including a repayment plan will show that you're serious about your business and that you understand your financial management obligations.

8. Financial Projections

You might need to spend time with your accountant for this one. Gathering important financial statements and documentation is necessary for the loan application process, but you'll also need to include them in your plan. So take some time to gather cash flow (projections and statements), business credit reports, three years of tax returns, and other financial statements (balance sheet, profit and loss statement, bank statements), accounts receivable and payable. Most lenders want to see a two- to three-year financial history as well as a one-year cash flow, and profit-and-loss prediction.

9. Prospective Data

Lenders want to know how you expect your company to perform in the future, usually the next five years. Your forecasts should be in line with your funding request.  Include projected revenue and expenses. Adding a chart or graph to your financial documents that demonstrates a ratio and trend analysis can rapidly show a lender how your company will expand.

10. Appendix

This section, being the last section, should include any additional information to back up specific sections of your plan. Financial statements in greater detail, resumes for your management team, patent documents, licenses, permits, reference letters, credit histories, contracts with suppliers, marketing examples, and so on. Include whatever information that will establish your credibility as a business owner and help the lender decide in your favor.


Although writing a business plan may appear to be a difficult process, it is a necessary step in obtaining SBA financing. This dynamic document can also serve as a guide once you've launched your firm, keeping you on course and allowing you to evaluate what's working and what isn't. Investing the time now to prepare a business strategy will pay off in the long run.

Looking to apply for the SBA loan? Black Insure can help you. Get started here.