How to Write a Business Plan for Financing

How to Write a Business Plan for Financing

  • September 2, 2022
  • By REIL Capital

Establishing a business is not easy at the start, especially if you don’t have enough financial capabilities to fund it. This is why applying for financing is almost necessary for every small business owner starting out.

If you’ve done the research, you’ll know that there is a list of requirements to have a higher chance of getting approved for funding. While there are different types of funding options, having a business plan to present is the leverage that puts your application at a higher rate of getting accepted.

 

What is a Business Plan?

When applying for funding, business lenders will want to take a look at your business plan. They need a glimpse of your financial statements, sales strategies, and the entire financial plan in general.

A business plan is a document that outlines the projected income and success of your business. Think of it as a cover letter when applying for a job, you’re not manipulating any important information, but you want to present it in a way that’s convincing enough for lenders to grant you funding.

 

The Importance of Writing a Business Plan

Besides getting approved for funding, there are other key factors as to why writing a business plan is important. Having a business plan can serve as a guide for you as the owner. By taking a look at your past financial records, you can generate forecasts to calculate the success of your business. This also helps you achieve short-term and long-term business goals.

 

 

What’s Inside a Business Plan?

Not all business plans are created equally. If you want to have an effective business plan, then you’ll need to include the following in the document.

 

Executive Summary

No business plan is complete without an executive summary. This showcases an overview of your business, making it appealing enough for the individual to continue reading. Include a brief summary of the whole business plan on a single page.

 

Your Proposed Business

How are you going to have a business plan if you don’t expound on your business idea? If you already have an established company, then you need to include the vision and mission statements, as well as any strategic partners. 

If your business is yet to flourish and is currently in the works, then you’ll want to elaborate on your idea by listing down the problems you want to tackle or any opportunities you want to present. 

What makes your business stand out from others? Why will people choose to buy your product or service over your competitors? Make it easy to digest and straight to the point.

 

Your Service/Product

In order for the readers to fully comprehend what your business is all about, it’s time to go into even more detail with your service or product. State your business model, as well as your target audience base. 

You should also add details about any important development and research conducted with regards to your service/product. If there are any patents or any other intellectual property rights, this is the best section to place them in.

 

Market Analysis

In this section, you have to include the market research you’ve done and any important insights you’ve gathered from it.  Describe how you plan to market or sell your product. Bonus points if you include market trends, your competitors, as well as your unique selling point.

You can also include a SWOT analysis that presents your business’ strengths and weaknesses, making it as detailed as possible. And explain how you’re going to manage your business based on the available options.

 

Financial Projections

The financial analysis must include projections for the next three years, at least. The further the predictions are, the more uncertain it’s going to be. 

The financial projections of your business must have income and cash flow statements, balance sheets, capital expenditure budgets, sales forecasts, and even profit and loss statements. 

This part of the business plan is important because lenders need reassurance that your business is capable enough to pay back the amount given for financing.

 

Appendix

A great business plan should be concise, but if you want to include more information about each section of the plan, then that’s when an appendix comes in handy. These include other details that you don’t want to present in the business plan’s body.

 

Apply for Funding with REIL today!

Our 3-minute funding application is easy and concise. Other lenders may ask for specific documentation and detailed paperwork, therefore extending the funding process. We know the frustration of getting all paperwork ready only to be rejected in the end. With REIL Capital, applying for financing has never been this convenient!

 

Interested? Apply now!

 

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