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April 28, 2022   /   K. Lee Graham

If you’re applying for an SBA 7(a) loan, your lender may ask that you provide a business plan as part of the application. A business plan is one of the best documents lenders can use to fully understand your company’s structure, product, leadership, goals, and projects. This document helps expedite the underwriting process for your loan application because it gives your lender the crucial information they need to efficiently secure your funding.

In this article, we’ll walk through how to write a standard business plan. We’ll also share specific tips from our team of lending experts for business owners writing theirs for an SBA 7(a) loan application. Download our free business plan template to get started.

I. Executive Summary

This section should be a clear snapshot of your business. Think of the business plan’s Executive Summary as the ‘main idea’ of the entire plan. In a few paragraphs, the Executive Summary should concisely explain the service or product, your customer, and a high-level overview of your growth plans.

Lender Tip: You may want to write the Executive Summary last. Once you complete the rest of the sections in the business plan, the main ideas that need to be included in the summary may be clearer and easier to write.

II. Company Description

This section should explain what you offer, how you do it, and why. Include your mission statement, business history, business model, and your legal structure in this section. Make sure to showcase your company’s history in the Company Description. SBA lenders want to understand your business’s trajectory up to this point, and your goals for future growth.

III. Market Analysis

The Market Analysis is a comprehensive evaluation of the industry segment your business falls into. It requires you to research the overall industry, your customer, your competition, and your own potential for growth.

Start by identifying your target market. Share data that illustrates the size and value of this market, and any recent trends that you expect will affect the industry in the near future.

Next, share specific statistics about your target customer, their spending habits, and how it would affect their abilities to pay for your product or service.

Finally, explain how your business will fit into the present landscape. Who are your competitors, and how could their business support or threaten your growth? What unique value does your company bring to the table, and how do you expect that to pay off based on the current state of the market? Reference your financial projections to support your potential earnings based on the market.

Lender Tip: Your Market Analysis should depict your company’s competitive position. You may choose to format this information as a SWOT Analysis table to clearly highlight your business’ strengths, weaknesses, opportunities, and threats. 

IV. Organization and Management

Share how your company is structured and the role each of your principal members plays in the success of the business. Detail your leadership team’s job responsibilities, and make sure you clearly describe how each team member contributes to the day-to-day operations of the company. Include any qualifications, certifications, and/or prior management experience for you and your team.

Lender Tip: This section is a good place to reference CVs or resumes for your primary leadership team. For the SBA loan application, your lender may require resumes that showcase the relevant experience of you or your team members that would contribute to your company’s success. Describe your team’s experience in this section, and attach full resumes in the Appendix of the Business Plan.

V. Service or Product Line

Explain what your business will offer. Briefly describe the services or products you currently offer and your pricing structure. Include relevant details on the product lifecycle and list any patents or copyrights.

VI. Marketing and Sales

This section should include how you plan to reach your customer, grow your base, and make sales. Your Marketing strategy may evolve over time, but this section should outline a general plan for your business now and into the near future.

Be sure to detail how a sale is made, including which channels are used in the buyer’s journey. Whether sales are made on a website, through social media channels, in stores, through meetings facilitated by trade shows, or a combination of these channels, be sure to list all relevant sales methods.

VII. Funding Request

The Funding Request section is unique to business plans written for financing applications. For the SBA 7(a) loan application, the Funding Request section of your business plan should detail how much money you need and what you plan to use it on. Are you purchasing long-term fixed assets like commercial real estate? Do you need more working capital for the upcoming year? Are you expanding or renovating your facilities? Detail this information in this section. Make sure you explain how your business will benefit and grow by using the loan.

Lender Tip: Keep in mind that borrowers applying for an SBA 7(a) Loan Program must plan to use the funds for one of the eligible uses of proceeds to qualify for financing. You can read more about the projects that fall under the SBA’s criteria in our SBA Loan Basics article.

Your completed business plan is a useful tool to keep on hand. Just be sure to edit it often. Your strategies, product mix, and goals may evolve. Your business plan should accurately reflect the most up-to-date phase of your business. Keep this template bookmarked as a reference for future versions.

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About West Town Bank & Trust | West Town Bank & Trust is proud to serve small business owners and entrepreneurs, helping them access affordable capital and financial services when they need it most. Since 1922, we’ve been creating long-lasting relationships with our customers based on old-fashioned values and future-thinking ideas. We’re guided by trust, respect, and honesty, and we’re driven by “what’s next”. Whether solutions come from surprisingly innovative tools or trusted products you’re familiar with, our single-focused purpose is your financial well-being.  We don’t just think outside the box, we think outside of the bank, so you can feel unquestionably confident banking with us.

West Town Bank & Trust is chartered in North Riverside, Illinois, and retains its operations in Raleigh, North Carolina.