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Business plan for a loan: features and requirements of banks

Drafting a business plan for a bank, also known as a loan proposal, involves forecasting and detailing a company's potential financial needs long before a loan is required. The business plan, along with the necessary documentation required by the lender, is used to apply for the loan and can greatly influence the approval of the loan.

Features of drawing up a business plan

It should be noted that the bank is interested in aspects related to the financial activities of the enterprise, namely the debt load of the organization, the rate of turnover of goods, the planned profit after the implementation of the project, etc. All this should be reflected in the business plan to receive investment.

All calculations and all inputs must be supported by contracts, other documents, statistics, market research, industry norms, etc. This approach will allow you to earn the loyalty of the financier and win over the bank to your side. Also, investors and credit organizations pay attention to how realistic the described business development prospects are, the probability of returning the loan issued, and how the loan agreement will help restore the financial position of the company. The time frame for project implementation must be realistic. 

  Structure business plan

  1. Relevance of the project (summary)
    The resume answers the main question: why can your company make a profit? This section should be a snapshot of your entire operation. Here you need to succinctly explain to the bank why investing in your company is not a risky proposition for them.
  2. Market analysis
    Conducting a market analysis will help uncover general economic and marketing trends. With the help of market research, you will be able to analyze the volume and dynamics of the market, the main factors influencing its development, consumer preferences and demand, as well as the situation with foreign trade supplies and the main competing companies in the market.
  3. Company Description
    This section should reveal the history of your business, the main stages of the company's development and characteristics that show your level of production and sales of products, credit potential. It tells prospective lenders where you are, who is in charge, and how they can contact you.
  4. Organization and management
    The organization and management section of your business plan should explain to lenders the structure of the organization and the experience of all employees. This section also includes information about the organizational structure.
  5. Marketing and sales management
    In this section, it is important to show lenders how you offer or are already selling your product. It will be important here to explain your marketing strategy, your reach indicators, target audience, buyer profiles.
  6. Production plan
    This section should show what products or services you are selling, what the costs of production are, and what is the profitability of this type of product or service.
  7. Financial plan and risk analysis
    The financial section should consider the main assumptions of the financial plan, determine general and administrative costs, sources of project financing, analyze sales, the structure of direct costs, tax payments, the structure of the full cost, loan servicing, calculate the discount rate level, financial results of the project, investment indicators. efficiency, the cash flow statement and the dynamics of working capital are shown, the analysis of break-even and sensitivity of the project is presented. Conclusions are drawn about the feasibility of the project.

Make sure you attach copies of your resume, income statement or income statement, balance sheets and cash flow statements. These documents are the most important business documents that lenders expect from you. You also need to check that all the requirements mentioned in your loan application have been included. This way you save time and get a loan faster. It also shows creditors that you are responsible and organized.