This article is part of a larger series on Business Financing.
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If you are applying for a loan through the Small Business Administration (SBA), a business plan will likely be a required component of your loan application. Your SBA business plan should provide an overview of your company’s goals and how it plans to achieve them. There is no standard format for an SBA business plan, but it should contain enough information that a potential investor or lender can make an informed decision as to the likelihood of your company’s continued success. We recommend using our SBA business plan template above to ensure you cover the most critical components.
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Explore your SBA lending solutions now with Grasshopper BankProvides an organizational chart or legal structure of your business, key personnel, and other resources
Market Analysis Describes the competitive landscape, such as major competitors, trends, and competitive advantages Service or Product OfferedGives detailed information on how your product or service works, such as specifications, drawings, and performance data
Marketing & Sales Lays out your intended audience and strategies on how you’ll attract customers Finance Data & ProjectionsDetails your company’s financial position, as well as current and projected data for revenue and expenses
Funding RequestAnswers the question of why you need funds, what the money will be used for, and the expected return on investment
Is a compilation of supporting data, charts, or other information referenced in the above sectionsThis section of your SBA business plan should address your company’s purpose, its goals, and how they’ll be met. Provide background information to describe why your company exists, any problem or challenge it aims to solve, and how customers can benefit from its products or services.
A strong company description should also address the following questions:
Your SBA business plan should outline how your company is organized from both a tax and legal structure. Including an organizational chart can help show the individuals responsible for different areas of your business. You can also include information about the background of key members of your leadership team.
Consider also addressing the following items:
The market analysis section of your SBA business plan should look at who your competitors will be. Observe what they are doing well, their weaknesses, and how your company compares. Insights from this evaluation can provide a good foundation for identifying opportunities and consumer needs that aren’t currently being met.
The SBA’s market analysis page contains information on how you can approach this. Questions you should also consider addressing should include the following:
In this section, you should detail the products or services your business offers. You should explain what it does, how it helps your customers, and its expected lifecycle. Include things like any expected research and development costs, intellectual property concerns (e.g., patents), what the lifecycle of your product looks like, and what is needed to manufacture or assemble it.
Here are some things to consider as you are working on this section:
Details of your marketing and sales strategy will be highly dependent on your business. It’s also something that may evolve and change over time in response to things like the overall economic environment, release of competitor’s products or services, and changes in pricing.
With that being said, here is a list of some items that should be addressed:
If your business has been operational, you should include information about its finances. This should consist of all streams of revenue and expenses. Data for financial projections should also be included, along with a description of the methodology you used to reach those conclusions.
If available, you should be prepared to provide the following financial documents for at least the last three years to five years:
Financial projections should include enough data to offer some confidence that your business is viable and will succeed. It’s recommended that you provide monthly projections looking forward at least three years, with annual projections for years four and five.
Use our SBA loan calculator to help you estimate monthly payments for the funding you’re currently looking for and projections for any additional loans you may need. Monthly payments can fluctuate depending on the terms of your loan. If you’re looking for accurate estimates, you can read our article on SBA loan rates.
This section is where you should specify how much funding you need, why you need it, what you’ll use it for, and the impact you expect it will have on your business. It’s also a good idea to indicate when you expect to use the funds over the course of the next three to five years.
Here is a checklist of some important items you should cover:
This last section of your SBA business plan should include any additional information that may be helpful for lenders. This can include more detailed explanations or clarifications of data from other sections of your business plan.
Here are some examples of documents you can include:
The executive summary, which is the first section of a business plan, should be no more than one to two pages long and should provide a high-level overview of the items listed below. Since each section above is already detailed, a brief description of those sections will be sufficient.
Depending on the type of SBA loan you’re applying for, certain areas of your business plan may be weighed more heavily than others. You can learn about the SBA loan options you can choose from in our guide on the different types of SBA loans.
If you’re looking for additional resources to help you write a business plan, you can consider the options below. Since a business plan is just one of many documents you’ll need, you can also read our guide on how to get an SBA loan if you need help with other areas of the loan process.
If your business plan is up-to-date, you may be able to reuse it for your SBA loan application. In general, you should consider updating your business plan each year or once any major changes have taken place to ensure that investors and lenders have the most updated information.
How long should my business plan be?A general rule of thumb is to have a business plan anywhere from 15 to 50 pages. However, this can vary from company to company, and we recommend focusing instead on ensuring it covers all of the necessary details for the various sections. Find the right balance between thoroughness and conciseness, as providing too many details can lead to lenders or investors glossing over important data.
Why do I need a business plan for an SBA loan?A business plan helps a lender determine whether your company is likely to succeed. This, in turn, allows it to determine whether or not you can repay loan proceeds, as well as the interest rate that you qualify for, based on its overall risk assessment.
Having a strong SBA business plan can improve your chances of getting approved for an SBA loan. If you’re unsure where to start, you can use our guide and template to cover the most important aspects of your business. You can also see our tips on how to get a small business loan. To get even more ideas on creating a strong business plan, you can also use resources through organizations such as SCORE and the SBA itself.
