sba.gov business plan

More From Forbes

How to write a business plan for an sba-backed loan or bank loan.

• Share to Facebook
• Share to Twitter
• Share to Linkedin

Applying for a bank loan or for a Small Business Association (SBA) funding option usually means you need a well-written business plan. This article will review what the bank is usually looking for and what to include in your business plan to improve your funding odds. It will teach you what else you need besides a great business plan and will then offer some advice I've found most entrepreneurs tend to overlook when they're applying for a bank loan.

What The Bank Is Really Looking For

In my experience, your business plan is a requirement for many bank loans and SBA-underwritten loans. Many entrepreneurs I work with think the bank is looking for a certain level of perfection. They assume the business plan is like a final exam that you either pass or fail. However, I've found the bank is really looking for three things:

• Did you put in enough effort to show you’re serious?

• Does it seem like you know your space and competitors thoroughly?

• Do you have clear projections based on strategy?

The bank isn't looking for these things to judge your business acumen or to see how smart and business-savvy you are. They are doing it to mitigate their risk.

One 2016 study  (purchase required) suggested that when you finish a business plan,  your odds of achieving viability improve (paywall) . The bank requires you to submit a business plan as a way to lower your risk of failure — and to lower their risk of not getting their money back. The more effort you put into your plan, the more knowledge you have about your industry, and the more clarity you show on how to achieve your financial goals, the more likely you are to be a success. This means it’s more likely you'll be able to repay their loan.

Getting a loan from a financial institution is a form of partnership — they want you to succeed in your business because if your business is profitable, then you are less likely to default on your loan. So requiring that you finish a business plan is an easy way for them to lower their own risk.

Now, that’s not to say the bank doesn’t care about the quality of your business plan. The underwriting team will read and review it, will dig into the financials and will try to get a clear understanding of what you're trying to do. This is where you need to be really careful about developing your business plan.

What To Include In The Business Plan

Your business plan should include some core components for the underwriters to evaluate. Beyond the typical market research, executive team overview and operations plan sections, there are specific pieces that need to be included in the financial section, too. As a professional business plan writer, commonly missed elements I see often include:

• A loan amortization schedule

• A use-of-funds table

• Cash flow projections with loan repayment

These can help the underwriters understand how you plan to utilize the loan. It also shows that you have a clear understanding of how repayment will impact your business's cash flow and that you are fully prepared to manage the loan requirements. Having these components will help the underwriters approve your business plan, but you should also be prepared for the other factors involved in the final loan approval decision.

Factors Beyond The Business Plan

Beyond your business plan, the bank will likely ask for a few other things. Even though you are looking for a business loan, your bank will likely need to have you personally back it with your own income and assets (unless you have a healthy, thriving business that has been operational for a while). They will usually determine your final loan offer based on factors like your tax returns, income history and credit score.

You should be prepared to submit your tax returns from the last one to three years. Your tax returns will be used to understand your income and gauge whether you will be able to support the future repayment of the loan based on past income. This is why it's so important to report all revenues and profits to the IRS every year for your business without "watering down" profits or taxable income. Underreporting earnings or profits to avoid taxes can hurt your odds of qualifying for bank funding in the future.

Also, be prepared to have your personal credit checked. Many banks have a minimum credit score they need to approve a loan. I recommend aiming for a score no lower than 630 to avoid being disqualified. As you might expect, the higher your score, the better your interest rate may be for the loan.

Accepting Or Rejecting A Loan Offer

The advice I find is the most underdelivered is to shop your business plan. Getting a bank offer doesn't mean that it's a fair offer for your business. When your bank finally makes you a loan offer, you now need to decide whether it's the right offer to accept. I recommend taking your business plan to at least three different banks, credit unions or other financial institutions. Just like with any other loan, you'll find that different providers offer different rates and terms and have different approval criteria. This means your situation may yield a great offer from one bank but a total rejection from another bank. Never let one loan offer or one loan rejection be the end of your search. Keep looking, and make sure you have the best deal possible for your business before you move forward on any offer.

• Editorial Standards
• Reprints & Permissions

How to Write an SBA Business Plan

If you’re thinking about starting a small business, or if you’ve been a business owner for a while but have never applied for capital, you may be wondering where and how to go about it. The good news is that documenting a business plan for SBA loans doesn’t have to be a difficult task. In fact, it can be fun!

A good business plan walks you through each stage of establishing and managing your small business. You’ll use your SBA business plan as a guide to organize, run, and grow your new company. It’s a way to structure through the key elements of your company.

SBA business plans help you get the required capital or acquire new clients or business partners. Investors want to feel convinced and optimistic they’ll see a return on their investment. Your SBA business plan is the weapon you’ll use to persuade people that working alongside your business or investing in your business is a smart choice. That being said, here’s everything you need to know about SBA loans and business plans and how you can increase your chances for success.

What is an SBA Loan?

If you’re a small business owner, you’re in luck. As the name implies, SBA loans are loan programs issued by banks and credit unions backed by the U.S. Small Business Administration (SBA) or a member of its network of supported participating lenders. This means that if you cannot pay back your loan, the government helps repay the traditional lender (bank) that provided the loan.

The SBA requires guarantees from your business partners who own at least 20% of the business, implying if you get an SBA loan, you are putting your assets at stake in case you’re unable to repay the loan. Additionally, companies that have at least 2 years of strong business and financials are mostly eligible for SBA loans. However, if your small business is struggling to make ends meet, an SBA loan may not be the right fit for you.

Irrespective of the personal guarantee requirement, SBA loans are one of the most popular ways to get capital to grow and manage your small business. Not only can you leverage their flexible repayment terms, but you can also take advantage of their low-interest rates to grow your small business. If you want to learn more about it, here’s our guide on SBA business loans . 

But before we move any further, let’s take a look at what the SBA is. 

The Small Business Administration (SBA) is a government agency in the U.S. that offers help and counseling to small businesses and startups by providing tools such as business planners, small business loans, and other training programs.

It also offers professional business documentation to guide small companies and startups through the procedures for applying for a small business loan. To do so, you must have a strong sense of what your business goals are and what your company does, along with a solid plan.  

If your business plan isn’t convincing and effective, you might have difficulty getting an SBA business loan. This is why it is important to have a clear vision of the business goal you want to achieve while working on the documentation.

In this article, we’ll take a look at what an SBA business plan includes.

Why You Need a Business Plan for SBA Business Loans

SBA business loans require a significant amount of documentation highlighting your business goals and your personal finances. You’ll need to mention your previous tax returns, bank statements, and different application forms based on the type of SBA business loan you require.

Alongside your past financial statements, the traditional lender issuing the SBA business loan would want to know about the future of your business. They’ll ask you about your plan on how you’d utilize the loan on your business and that your future cash flow estimates indicate that your company can afford loan repayments. 

This is where SBA business plans come into the picture. Besides providing other documentation required for the loan, you’ll need to draft a business plan to go with the rest of the loan application. Not only will your SBA business plan describe your business to your lender, but it will also have financial statements that the bank will require to help identify if you qualify for a loan.

Now, let’s take a look at what the SBA business plan template includes.

Writing an SBA Business Plan: A Comprehensive Guide

Learning how to write a brilliant SBA business plan is a crucial step toward creating a fruitful business. Put simply, a business plan explains exactly what your product or service is and why consumers would want to purchase it, alongside how you will handle any market challenges and environmental risks. It can help you determine what you want to achieve and how you plan to achieve your business goals. This, in turn, can help you to market your business, motivate your teams, and thereby make well-informed decisions.

A strong SBA business plan can also serve as a communication tool for future investors and potential loan providers. It will help you portray your present financial status, active revenue sources, and how you plan to meet revenue estimates. Even though a business plan isn’t relevant for all types of credit, it plays a crucial role in SBA business loans. While no two business plans are similar, every plan should have the following elements:

1. Executive Summary

Your business plan’s executive summary is your only opportunity to introduce your business to potential investors and lenders, which is why it needs to be concise and powerful. This summary should provide a brief gist of the history and background of your business that should be engaging enough for your readers. Oftentimes, it is helpful to write this part at the end – after you’ve spent considerable time examining and articulating all the details of your business.

2. Company Summary

Explain what your product or service does and why consumers or businesses will want to purchase it. Make sure to highlight all the areas where your product or service has leverage over the competition.

On the other hand, add the pending or established copyrights or trademarks, as well as the present or future plans for further research and development (R&D).

3. Market Analysis

Mentioning the strategy would highlight the marketability of your business, your competition, and your position into the competitive landscape. 

In the marketing analysis, provide all the information about your target industry, including the market size, target market, the market requirements, and hurdles to entry, like legal conditions and supply issues. Additionally, any information on the market tests you have undertaken should be included in your business plan. You must also include your direct and indirect competition in the market analysis section.

4. Marketing Plan

In your marketing plan, consider highlighting how to promote your business and generate leads for revenue. Describe the functionalities or characteristics of your product or service and how it helps consumers. 

Mention how your product or service differs from your competitors in the market and how you will grow your business and generate revenue. Additionally, provide details about your product’s life cycle and intellectual property issues.

5. Management Team

To highlight your human capital, describe your business in terms of structure and leadership. Let your readers know the roles of your employees and their qualifications. Elaborate on this in your documentation, and try providing their resumes as well. 

6. Financial Summary

Funding and financial analysis are two of the most crucial areas in your business. Highlight the funding your small business would require and provide supporting financial data on your previous and future financial activity.

Add necessary documents that portray your company’s present financial status, including cash flow statements, income statements, revenue sheets, and balance sheets. Mention your expectations for revenues along with the expense of your products, rent, fuel, electricity, utilities, salaries, and other aspects. 

7. Appendix

There are different ways you can organize and present the information given above so you can share it with potential lenders and investors, current and future team members, management teams, and anyone who needs to go through the vision of your company.

Conduct your research and find a business plan format that suits your business goals. There are multiple SBA business plan types for different readers, including investors and employees, so you can change your plan based on your target audience. 

Here are a few things you must keep in your mind:

• Create a business plan in a way such that it’s easier to find key information. Create a cover page and table of contents (ToC) that makes basic information easier to find. Moreover, it’s recommended to use dividers with tabs if you’re making hard copies of the documentation and putting them in a binder. 
• Make it as detailed as possible. Based on your product or service, you may also want to add a section on Action Plans, which includes data on compliance and safety processes, legal landscapes, regulations, operational & management plans, an employee manual, job descriptions of your staff, and everything you’d want to put on the hard copies (or in the digital document).
• Use an Appendix for highlighting additional information. The Appendix is where you attach supporting documents, including financial and market analyses, staff resumes, logo & branding examples, and so on.

Why more businesses are working with BSBCON

Nowadays, more and more business owners and entrepreneurs are trying their luck in the ever-competitive market. 

Business is a vast landscape. There are a number of ways you can leverage to build and promote a marketing idea. However, the first thing you need to promote a product or service is a solid plan, and to propose this plan, your company needs business plan writers.

Think of BSBCON as a crucial and cost-effective extension of your own business. BSBCON is a leading company that offers SMB consulting solutions, including providing thorough business plans, pitch decks, strategic planning, and more, that save you both time and resources.

If you want to increase your chances of securing capital, grants, or investors, partner with BSBCON and get a solid business blueprint with a professional business plan. 

BSBCON’s SBA business plan writers offer all such insights, including marketing plans & strategies, pitch decks & storyboards, market research & in-depth analysis, business planning, bookkeeping & accounting, financial modeling – and the list goes on! Get in touch with BSBCON’s SMB consultants today to see how they can help you. With BSBCON, you get guidance to build a strategically designed, SBA-approved business plan that offers everything potential investors need to evaluate your business and business goals.

Let's Get Started!

• Your Name *
• Email Address *
• Phone Number

How can we help you?

Get in touch with us or visit our office

An official website of the United States government

Here's how you know

Official websites use .gov A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS A lock ( Lock Locked padlock icon ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Welcome to USA.gov

Benefits.gov has been discontinued. USA.gov is the new centralized place for finding government benefits for health care, housing, food, unemployment, and more.

• Continue to USA.gov

Small business

Most popular.

• Start your own business
• How to get an import license
• How to get an export license

Learn how to start your own business, including imports and exports.

How to start and fund your own business

Learn how to start and manage your small business, and find local support if you need help.

How to get an import license or permit

In most cases, you will not need a license to import goods into the U.S. But for some items, agencies may require a license, permit, or other certification.

How to get an export license or permit

Most items exported to a foreign buyer will not need an export license or permit. But all items are subject to export control laws and regulations.

Looking for something else? Explore all topics and services

How to Write an SBA Business Plan + Template

Noah Parsons

10 min. read

Updated August 1, 2024

Applying for a Small Business Administration loan typically requires a business plan.

Unfortunately, there’s no SBA loan business plan format that guarantees approval. The SBA even states you should “pick a business plan format that works for you.” 

While I agree with this sentiment, I’ve found that entrepreneurs who explain how funds will be used and how they will repay the loan tend to be more successful. 

Luckily, these details can be covered using our SBA-lender-approved business plan format . I’ll go over that structure in this article, and focus on the sections that the SBA prioritizes, so you can maximize your chances of getting funded .

You can even download a free SBA-lender-approved business plan template to fill out as you read. 

Let’s get started.

• Why you need a business plan for SBA loans

SBA loans require good documentation of your business and personal finances. You’ll need to pull together your past tax returns, bank statements, and various application forms depending on the type of SBA loan you apply for.

The bank issuing the loan will also want to know about the future of your business. 

They’ll want to see how the loan will be used and if future cash flow projections are realistic and indicate you can afford loan payments.

That’s where writing an SBA business plan comes in. 

Not only will your business plan describe your business to the lender, but it will include the financial projections the bank will use to determine if you qualify for the loan .

• What your business plan should include, according to the SBA

Business plans for SBA loans follow a fairly standard structure, but that doesn’t mean you need to follow it exactly. 

The SBA even recommends adjusting the plan outline to serve your needs. If a section does not apply to your business, it’s fine just to remove it.

Here’s the successful business plan structure I recommend for SBA loans:

1. Executive summary

A great executive summary is a short, simple overview of your business. It should be easy for a loan officer to read and clearly understand what your business does. 

When applying for an SBA loan, highlight your: 

• Business opportunity
• Financial forecast
• How much money you want to borrow and how it will be used

Remember, an executive summary should be short and to the point. The rest of your business plan will provide additional details.

[Dig deeper: How to write an executive summary ]

2. Company description

Some people call this section “Products and Services.” Either option is fine. The important thing is that you use this section to explain what your business opportunity is. 

You need to cover: 

• The problem you solve
• Who you’re solving it for
• What your solution is and why it’s better

Be specific and tell the story of your business and your customers. Focus on your strengths and what sets you apart from competitors. 

If your company is developing a product, include information on:

• What the product life cycle looks like
• Intellectual property filings
• Current research and development

If these topics don’t apply to your product, that’s fine. Just be sure that the description of what you sell is clear.

3. Market analysis

The market analysis chapter explains who your customers are. It provides an overview of your target market, competition, and industry.

Your target market is essentially a description of your ideal customers. Be sure to include specific demographic information (like age, gender, location, income) and psychographic information (hobbies, purchasing behaviors). 

This data should reinforce that your target market needs your solution .

It’s helpful to also include information on the size of your target market . Lenders will want to see evidence of enough potential customers to drive growth. 

While your target market information describes your customers, an industry overview discusses the type of business you’re in and its potential for growth. 

For example: If you’re starting a fast-casual restaurant, your industry overview might discuss the increased interest in fast-casual dining and how more people are eating in these types of restaurants every year. 

Finally, you’ll need to include a competitive analysis . This is a list of current competitors and alternatives, with explanations of why your business is a better option. 

Your goal is to show how your business is unique, what opportunities and threats there are, and how you plan to address the competition.

4. Organization and management

Also known as your company overview, this section is where you describe your legal structure, history, and team .

For your SBA loan application, you should focus on describing who is managing the business as clearly as possible. 

You may want to include an organizational chart. You should provide detailed resumes for everyone in leadership positions. Each team member’s experience, skills and professional qualifications can mitigate risk in the eyes of a lender .

To show you’re thinking ahead, it’s also helpful to include key positions you plan to fill as you grow. 

5. Sales and marketing plan

Your goal in this section is to summarize how you will attract, retain, and sell to your customers.

The marketing strategies and sales methods you describe should always have the customer top of mind, and demonstrate that you know how to connect with them. 

To help a loan officer visualize this, you can provide examples of marketing messaging, visuals, and promotions. If you have any research or results to show that your strategy has merit, include those as well. 

6. Financial projections

SBA lenders typically require 5 years of financial projections — including profit and loss statements , balance sheets , and cash flow statements . 

Be sure to include the SBA loan in your projections in the following areas: 

• A liability on your balance sheet.
• Payments on your cash flow.
• Interest expenses on your profit and loss statement. 

I’ll dive into specific details of what you should focus on in the “how to improve your chances” section.

Your first year of financial projections should include monthly details. After that, annual summaries are usually sufficient for most SBA lenders. Occasionally, a lender might require 24 months of monthly projections, so check with your bank before submitting your business plan. 

If your business is up and running, you must also provide historical financial reports for the past 12-24 months of operations—including income statements and a current balance sheet.

Typically, you will also need to provide reports on your personal finances , including any assets you have, such as a home or car. 

Finally, include a section explaining your use of funds—what exactly you plan to use the loan for.

7. Appendix

The appendix is your chance to provide additional documents that support sections of your business plan. 

When applying for a loan, these may include:

• Employee resumes
• Licenses and permits
• Patents and other legal documents
• Historical financial statements
• Credit histories

Don’t worry about stuffing your appendix full of additional documentation. Only include information if you believe it will strengthen your approval chances, or if your lender specifically asks for it.

• How to improve your chances of being approved for an SBA loan

Your SBA business plan needs to focus on the loan you are applying for and how that will impact your business financially. 

Make sure to include the following information in your financial plan to increase your chances of success with your lender:

Funding request 

In your executive summary, document how much money you are asking for. It’s best to put your number where it can be clearly read, instead of trying to bury it deep within your business plan.

Remember, there are limitations to how much you can borrow through SBA-backed loans.  Most have a maximum loan amount of $5 million, while SBA Express loans have a maximum loan amount of $350,000. 

Use of funds

You should also describe how you plan to use the loan and which aspects of the business you want to invest in. 

Some SBA loans are designed specifically for expanding export businesses or funding real estate transactions. So, make sure your use of funds description is appropriate for the loan you are applying for.

Cash flow forecast

Be sure to include the loan in your cash flow statements and projections . You want to demonstrate that you’ve planned how you will use and repay the loan.

You need to show:

• When you anticipate receiving the loan.
• How the loan will impact your finances. 
• Loan payments for the life of the loan. 

Having this prepared won’t just increase the chances of your application being approved—It  will make it much easier to manage the loan after you receive funding . 

Balance sheet 

You’ll also want to put the loan on your projected balance sheet , and show how the loan will get paid down over time. 

The money you owe will show up on your balance sheet as a liability, while the cash you receive from the loan will be an asset. Over time, your forecasted balance sheet will show that the loan is getting paid back. 

Your lender will want to see that you have forecasted this repayment properly.

Profit & Loss forecast

Your P&L should include the interest expenses for the loan, and show how the interest will impact your profitability in the coming months and years.

• How long does an SBA business plan need to be?

The SBA doesn’t have an official recommended or required business plan length . As a general rule of thumb, you should make your business plan as short and concise as possible. 

Your business plan is going to be reviewed by a bank loan officer, and they will be less than excited about the prospect of reading a 50-page business plan.

If possible, keep the written portion of your business plan between 10-15 pages. Your financial forecasts will take up several additional pages. 

If you’re struggling to keep it short, try a one-page plan

A great way to start your business plan is with a simple, one-page business plan that provides a brief and compelling overview of your business. 

A good one-page plan is easy to read and visually appealing. Once you have your one-page plan, you can expand on the ideas to develop your complete written business plan, and use the one-page plan as your executive summary. 

Loan officers will appreciate a concise overview of your business that provides the summary they need before they start looking at your complete business plan and financial plan .

• Resources and tools for writing an SBA business plan

Remember, you can download a free SBA-lender-approved business plan template . It includes detailed instructions to help you write each section, expert guidance and tips, and is formatted as lenders and investors expect.

If you’re looking for a more powerful plan writing tool, one that can also help you create financial forecasts for the use of your loan, I recommend you check out LivePlan . 

With LivePlan, you get:

• AI-powered recommendations: Generate and rewrite sections of your plan to be more professional and persuasive.
• Step-by-step instructions: In-app examples, tutorials, and tips to help you write an impressive business plan.
• Automatic financials: Skip the spreadsheets and complex formulas, and quickly create accurate financial forecasts with everything a lender needs.
• A built-in pitch presentation: Print or share your full business plan, one-page pitch, and financial reports—all with a professional and polished look.

Whether you use the template, LivePlan, or try writing a business plan yourself, following the structure and tips from this article will improve your chances of getting an SBA-backed loan. 

And for additional SBA-focused resources, check out our guide on how to get an SBA loan .   

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

Related Articles

12 Min. Read

10 Reasons You Don’t Qualify for an SBA Disaster Loan

6 Min. Read

What to Do When You Need a Disaster Loan

4 Min. Read

The Different SBA Loan Programs Explained

The LivePlan Newsletter

Become a smarter, more strategic entrepreneur.

Your first monthly newsetter will be delivered soon..

Unsubscribe anytime. Privacy policy .

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software