how to write a business plan for an sba loan

When applying for an SBA loan, applicants may be required to submit a business plan. Understanding how to write a business plan for an SBA commercial loan not only increases your chances of qualifying but also maximizes your potential funding amount. With that in mind, follow this seven-step guide to help you write a business plan for your SBA loan.

Create an executive summary.
This is a brief overview of your business plan. Even though it is the first page of your plan, wait to write this until last. It’s usually easier to write the executive summary after you have completed all the other areas of your plan. It should be simple and concise; try to keep it to one page. Be sure to include the following:

• Business name and location
• Products and services offered
• Mission and vision statements*
• Summary of growth plans*
• Loan amount and a brief statement on how funds will be used

* For SBA loans, whether involving a startup business, existing business, business acquisition, conversion, or business expansion, be sure to identify how your business will contribute to keeping or creating jobs and benefit the well-being and overall economy of the community.

Write a company description.
Describe your business in more detail, in this section

• The corporate structure of the company (LLC, S-Corp, sole proprietorship, partnership, etc.)
• Identify all owners, partners, or shareholders (Note: For all owners with a 20% equity stake, the SBA loan
  application will require personal financial statements dated within the last 30 days, along with
  supporting documentation of assets – bank statements, W-2s, etc.)
• Identify vital members of the team
• Provide a brief history of a pre-existing business
• Describe the nature of the business
• Market the business serves and demand it meets
• How it supplies the market with its products and services
• How the business makes a profit

Try to include supporting statistics, when possible.

Define your business goals.
Clearly spell out your short- and long-term business objectives. Specify your growth goals and identify in
specific terms the need for funding (what it will be used for, how it will help you meet your growth goals,
etc.). Describe how you expect your company to evolve and what will that look like in 1-5 years (short-term) and in 5-10-plus years (long-term).

• Short- and long-term business
• Future growth goals
• Spell out the clear need for the funds
• Elaborate on the planned use of the funds

Describe your products and services.
Here is when you deep-dive into the details of your products and services.

• Detailed description of your products and services
• Benefits to the customer
• Any unique patents, processes, or other relevant information

Provide a market analysis.
A market analysis is a thorough assessment of the market within your specific industry. It is an analysis of
the dynamics of the market based on potential customers, competitors, historical sales patterns, and other
trends. Explain how these things, in tandem with the unique selling points of your products and services,
will allow you the opportunity to sell them successfully. This is where all your market research comes into
play. Include the following:

• Market research and statistics
• Historical or projected sales trends
• Industry outlook
• Identify competitors
• Product differentiation (What makes your products/services unique?)
• Market opportunity

Outline your sales and marketing plan.
Explain how you will go about marketing and promoting your business. How are you going to get customers
to buy your products and services?

• Promotional plans
• Plans for marketing and advertising
• Details about pricing, special promotions, and upselling

Provide a business financial analysis that includes financial projections.
Here is where you might need the help of an accountant. This section includes the critical financial details
that ensure your business plan is viable and that you will be able to repay your SBA loan according to the
agreed-upon terms. The financial analysis must include historical financial information for existing
businesses and projections for future business. For SBA Loans, this section also will have any collateral being
used to back the loan amount.

• Historical financial data – Financial data prepared according to GAAP
• Balance sheet: 2 years historical and year-to-date
• P&L Statements: 2 years historical and year-to-date
• Pro Formas: 2-3 years
• Realistic prospective financial information:
• Forecasted income statement
• Cash-flow statement
• Forecasted capital expenditures
• Schedule of debt
• Historical and projected
• Collateral
• Estimate and breakdown of projected collateral
• Appraisals and Reports
• Appraisals
• Environmental studies, if applicable
• Feasibility studies, if applicable

Once you have written your business plan and finished your documentation, your SBA loan application is complete.

Before crafting a complete business plan, our loan representatives at Veritex Community Bank can assist in walking you through the pre-qualification process to ensure that you meet the initial qualifying criteria, saving you time.

Veritex supports small business entrepreneurs in all industries across the United States. Contact us for
assistance in applying for an SBA loan, today.