Business Plans Lenders Actually Read

A lender-ready business plan is not a school essay—it’s an underwriting brief. The goal is to answer how much you need, why, how you’ll repay, and what protects the lender if things go sideways. Below is a practical, lender-focused structure you can follow for bank loans, SBA 7(a), term loans, and lines of credit.

What lenders look for (in 90 seconds)

The lender-ready plan: section by section

1) Executive Summary (write last)

In one page: who you are, what you do, how much you’re requesting, exactly how funds will be used, and how you’ll repay. Add 3–5 bullets of proof (traction, contracts, margins, team). Close with DSCR summary and collateral note.

2) Company Overview

Legal name, state of formation, EIN, ownership table, locations, licenses/permits, and a 4–6 sentence narrative of the business model and customer promise.

3) Market & Competition

Keep it lender-focused: demonstrate a real addressable market, your positioning, and why your acquisition cost and gross margins are plausible. Include 2–3 reputable market stats (cite sources briefly) and a short competitor table (price, speed, differentiation).

4) Products/Services & Unit Economics

Describe offerings, pricing, payment terms, and fulfillment. Add a simple unit economics table so underwriting can sanity-check margins.

5) Traction & Evidence

• Trailing 12-month revenue and gross margin trend
• Top 10 customers or POs; retention or re-order rate if relevant
• Reviews/ratings, certifications, supplier letters

6) Funding Request & Use of Funds

Break out the full budget with vendor quotes or invoices. Tie each expense to a revenue or efficiency outcome. Include timing (month/quarter) of spend.

7) Financials (assumptions first, then projections)

Underwriters don’t want hockey sticks—they want well-documented assumptions. Then show month-by-month projections (12–24 months) and summary years (3–5 years).

Tip: If you have seasonal dips, show a working-capital cushion and a quarterly DSCR view so the annual average stays healthy.

8) Collateral & Guarantees

List available business assets with rough values (and any liens). If personal guarantee is required, note guarantors and personal financial statement is available on request.

9) Management & Team

Short bios relevant to execution (operations, sales, finance). Highlight prior exits, licenses, or years in the industry.

10) Risks & Mitigants

• Customer concentration: Add 2–3 pipeline accounts; show contingency plan.
• Supply chain: Secondary suppliers, inventory buffers, local alternates.
• Key person: Cross-training, SOPs, documented processes.

Formatting lenders appreciate

• Length 8–15 pages plus appendices; PDF, bookmarked if possible
• Clear headers, 11–12 pt font, 1.15–1.5 line spacing
• Tables for numbers; avoid screenshots of spreadsheets
• Appendices: quotes, contracts/POs, licenses, photos, equipment spec sheets

Common red flags (and how to fix them)

• Vague use of funds. Fix: itemize with vendor names and amounts.
• Margins that don’t match industry reality. Fix: show unit economics and past invoices.
• No repayment story. Fix: present monthly debt service, DSCR, and a downside case.
• Overly rosy projections. Fix: bottom-up assumptions, sensitivity table, and milestones.
• Missing documents. Fix: add an appendix checklist and label everything.

Appendix checklist (include as needed)

• Articles of Organization/Inc., EIN, licenses/permits
• 2–3 years business tax returns and YTD financials (if applicable)
• Personal financial statement (for guarantors), personal tax returns when required
• Vendor quotes, equipment spec sheets, lease terms, insurance binders
• Top customers/POs, supplier letters, landlord reference

FAQs