How to write a business plan for a bank loan
Banks do not read business plans the way investors do. Here is what a credit assessor actually looks for, section by section, and the mistakes that get plans set aside.
Most lenders want a business plan before they will look at a new or recently acquired business. And most of the plans they receive get skimmed once and set aside, because they were written for the wrong reader. A bank is not an investor. It does not share your upside. It carries your downside. A plan written for a bank has one job: show the assessor that the debt gets repaid, in good months and bad ones.
Here is how a lender-grade plan is structured, what the credit team actually reads in each section, and where template plans fall over.
What the bank reads first
Credit assessors read out of order. They go to the numbers first: the forecast, the repayment cover, the assumptions. If those hold up, they read the rest to check the story matches. If the numbers fail, nothing in your market analysis will save the plan. Write the financial case first and build the document around it.
| Section | What the assessor wants from it |
|---|---|
| Executive summary | The loan amount, what it buys, how it is repaid, and the cover ratio, in half a page. Answer the credit question before page two. |
| The business | What it sells, who buys it, how long it has traded, and what changes under your ownership. No history lessons. |
| Management | Who runs it day to day and why they are credible. If key staff stay on, say so. Experience gaps need a plan, not silence. |
| Market and competition | Enough to show demand is real and priced sensibly. Verifiable local numbers beat industry think-pieces. |
| Financial forecasts | A three-way forecast where the P&L, balance sheet and cash flow actually reconcile, with repayments shown line by line. |
| Assumptions register | Every growth rate, margin and cost tied to something checkable: history, a contract, a quote, or a benchmark. |
| Risks and mitigants | The three things most likely to hurt the business, named by you, each with a response. Naming risks builds trust; hiding them destroys it. |
The forecast is the plan
A lender-grade plan is built on a three-way forecast. That means the profit and loss, the balance sheet and the cash flow statement are one connected model, not three separate spreadsheets. When they reconcile, an assessor can trace every dollar. When they do not, the whole document loses credibility, because if the mechanics are wrong the conclusions are too.
The forecast should show the loan repayments explicitly, month by month in year one, and prove cover at a stressed interest rate rather than the advertised one. A plan that only works at today's rate is a plan that fails the bank's internal test, and you will never see that test happen. You will just get the decline.
Where template plans fall over
- Hockey-stick revenue with no assumption behind it. Growth needs a driver the assessor can check.
- Round numbers everywhere. Real forecasts inherit messy numbers from real history.
- No owner wage, or an owner wage below what anyone would accept to do the job.
- Forecasts that ignore GST, tax, and the timing gap between invoicing and getting paid.
- Loan repayments missing from the cash flow entirely, which is the one line the lender came to see.
- Forty pages of padding. Length is not credibility. A tight twenty-page plan beats a bloated sixty-page one.
Match the plan to the lender
Different lenders weight things differently. A major bank leans on history and security. A specialist lender will read the management story and the sector metrics more closely. If you know which lender the plan is going to, the emphasis can be tuned before it goes in, which is one of the quiet advantages of preparing the plan and the finance strategy together rather than in isolation.
We build lender-grade business plans from $850, and the Bank-Ready Pack, which pairs the written case with the serviceability model, is $2,850. Fees and turnarounds are on our business services page. We arrange the finance too: credit assistance is provided by Nick Clunes through The Lending Lab Pty Ltd, and any lender commission is disclosed in writing.
Write the plan for the person who carries your downside, not the one who shares your upside.
General information only. It does not take your objectives, financial situation or needs into account, and it is not credit, tax or financial product advice. Figures are illustrative. Finance is arranged through The Lending Lab Pty Ltd (ACN 651 936 337), Credit Representative 538291. Nicholas Clunes is Credit Representative 530711. Both are authorised under Australian Credit Licence 387856.
Keep reading
All insights- How to prepare a cash flow forecast for a bankThe forecast that sits underneath the plan.
- What a lender will ask you for
- What buyers actually pay up for
- What DSCR do lenders actually want?
Bring the numbers you have. You'll leave with a clear answer and a fee in writing.