Applying for a loan through the Small Business Administration (SBA)? Here’s how to write an SBA business plan for your application. 

We’ll walk you through the process and explain:

  • Why you need an SBA business plan
  • How to write a business plan when applying for an SBA loan
  • The elements of an SBA business plan template
  • How to prepare your plan for a successful SBA loan application

Why You Need a Small Business Administration Business Plan

The SBA works with a network of approved lenders to support a variety of loan programs designed to help small businesses succeed. To make these loans affordable, the SBA guarantees the loans, reducing risk to lenders and enabling them to charge lower rates. Approved lenders must not exceed rate caps set by the SBA. This makes these loans one of the most affordable forms of financing for small businesses.

When deciding which loan applications to approve, one of the most important factors lenders consider is your company’s ability to repay your loan. Because of this, one of the best ways to improve your odds of getting a loan is to present lenders with a well-written business plan.

In addition to improving your chances of securing a loan, a business plan can help you hone your plans for critical areas of your business, such as financial planning and marketing strategy. Startups with written business plans are 16% more likely to succeed than counterparts who don’t plan, according to a study that tracked more than 1,000 would-be U.S. entrepreneurs during a 6-year period.

How to Write a Business Plan for an SBA Loan

A typical sample business plan for an SBA loan typically includes 9 key components, according to the SBA:

  1. Executive summary
  2. Company description
  3. Market analysis
  4. Organization and management
  5. Service or product line
  6. Marketing and sales
  7. Funding request
  8. Financial projections
  9. Appendix

Use this SBA loan business plan sample outline to organize the structure of your plan. Then use the detailed explanation of each section below to flesh in your outline.

To fill in the details of your outline, you may find it convenient to first assemble some preliminary information you’ll need, including:

  • A brief statement summarizing your company mission
  • Business incorporation papers
  • Market research summaries and resources
  • Your company organizational chart
  • Resumes of key staff members
  • Marketing and sales strategy planning
  • Financial statements projecting your business performance over the next few years, including a profit and loss statement (income statement), balance sheet and cash flow statement

Having this information available will make it easier to write your plan.

Applying for an SBA loan? Build a business plan for your company.

Filling in Your SBA Business Plan Template

Now we’ll explain what belongs in each section of your business plan. The items included below illustrate what typically goes in each section, but depending on the nature of your business, you may choose to omit certain items or include others. Adjust these guidelines to your individual needs.

1. Executive Summary

Your executive summary presents a short overview of the highlights of your business plan. It’s designed as a short overview of your plan for busy lenders who have to read many SBA loan applications are trying to decide whether it’s worthwhile to continue reading the rest of your plan. If a summary doesn’t grab their attention and convince them you’ve got a solid business plan, they may not read the rest of your plan.

With that in mind, it’s crucial to focus your summary on the main points of your plan and to keep it short. A couple of pages is a good target length.

Your executive summary should briefly cover:

  • Your company’s mission statement
  • A description of your company’s product or service
  • Essential information about your leadership, employees and location
  • Your company’s finances
  • Your funding request

You may find it easier to outline your executive summary briefly and then write the rest of your business plan. You can then condense the detailed information from your plan into your executive summary to flesh it out.

2. Company Description

Your company description discusses:

  • Your company’s mission
  • What you do for your customers
  • Who your target market is
  • How you stand out from your competitors

You may find it easier to write this section after you’ve done your market research and developed a marketing and sales strategy.

3. Market Analysis

Your market analysis summarizes the results of your market research, covering items such as:

  • The size and growth trends of your target market
  • The composition and needs of your target demographic
  • What your top competitors are doing
  • How your company can gain a competitive advantage

Doing your homework when writing this section can help you persuade lenders that your business plan is viable. It can also help you make realistic revenue projections for developing your financial statements.

This section is a good place to include visual aids such as graphs and charts that illustrate the size of your market.

4. Organization and Management

This section covers information such as:

  • The legal structure of your business (sole proprietorship, partnership, LLC, S-corporation, or C-corporation)
  • The organizational structure of your staff, which can include an organizational chart
  • The backgrounds of your key personnel, which can include curriculum vitae or resumes
  • Your operational plan, describing how you will run your business

5. Service or Product Line

This section addresses items such as:

  • What products or services your company sells
  • How your product or service benefits your customers
  • Your product or service’s lifecycle (how your company will launch your product or service and grow market share)
  • Intellectual property issues associated with your product (patents, copyrights)
  • Research and development your company is doing related to your product or service

6. Marketing and Sales

Your marketing-and-sales section should convince lenders you have a viable plan to promote and sell your products or services. It covers topics such as:

  • Your unique selling proposition (how you will position your brand to convince customers they should buy from you instead of a rival brand)
  • What marketing channels you will use to promote your brand
  • Your sales process

Writing this section can also help you estimate sales projections, which can be useful when creating your financial projections.

Your marketing-and-sales section should convince lenders you have a viable plan to promote and sell your products or services.

7. Funding Request

Your funding request formalizes what you’re asking for from prospective lenders, detailing key items such as:

  • How much funding you need
  • What type of funding you’re requesting (loan, line of credit or merchant cash advance)
  • Your desired terms
  • The amount of time your request covers
  • What the funding will be used for
  • How you intend to repay what you borrow

8. Financial Projections

This section gives lenders a picture of your company’s financial shape by summarizing items such as:

  • Your company’s annual revenue, expenses and profits
  • Your company’s balance of assets and liabilities
  • Your company’s cash flow
  • Your analysis of how long it will take your company to break even
  • Relevant highlights of your personal finances, such as your net worth and credit score
  • Collateral you could use to put up for a loan

Your company’s financials should be fleshed out in spreadsheets covering your key financial statements:

  • Profit and loss (income) statement
  • Balance sheet
  • Cash flow statement

These statements and others you choose to use can be summarized in your business plan, with full details in attached spreadsheets.

Your company’s financials should be fleshed out in spreadsheets covering your key financial statements.

9. Appendix

Your appendix includes any supporting documents that can help you make the case for your loan request, such as:

  • Financial statements
  • Credit histories
  • Market research articles or links
  • Marketing graphs and charts that go beyond the highlights included in your marketing section
  • Resumes
  • Patents

Feel free to include any additional items that you think will impress lenders.

Preparing Your Plan for a Successful SBA Loan Application

Before using your business plan to apply for an SBA loan, you may find it helpful to have an expert review your plan and make suggestions on how to improve it. The SBA provides works in partnership with organizations such as SCORE to provide entrepreneurs with access to business mentors who can advise you on developing your business plan and applying for a loan. The SBA’s website includes an online tool to help you find local assistance from SCORE and other partner organizations in the agency’s network.

When you submit your plan with your loan application, lenders will typically check your personal credit score to evaluate your creditworthiness. You can improve the odds of your business plan succeeding by taking steps to improve your credit score before applying for a loan. A good place to start is by requesting a free copy of your credit report from AnnualCreditReport.com.

Using Your SBA Business Plan to Secure a Loan

Once you have your business plan complete, you’re ready to take the next step and start approaching potential lenders. Fast Capital 360 can help you obtain SBA loans with excellent terms at affordable interest rates. Check out our page on SBA loans to learn more about how we can assist you with securing the financing you need for your business to succeed.