sba 7a loan business plan template

Financing | Templates

How To Write an SBA Business Plan [+Free Template]

Published June 13, 2023

Published Jun 13, 2023

REVIEWED BY: Tricia Jones

WRITTEN BY: Andrew Wan

This article is part of a larger series on Business Financing .

• 1. Write the Company Description
• 2. Identify Organization & Management
• 3. Specify the Market Analysis
• 4. Write Descriptions of the Products or Services
• 5. Indicate the Marketing & Sales Strategy
• 6. List Financial Data & Projections
• 7. Write the Financing Request
• 8. Fill In the Appendix & Supplemental Information
• 9. Complete the Executive Summary
• Additional Resources

Bottom Line

If you’re applying for a loan from the Small Business Administration (SBA), there’s a good chance that you’ll need a business plan to get approved. An SBA business plan provides a summary of the various aspects of your business, and we will guide you through the process of creating it, from writing your company description and marketing and sales strategies to completing financial data and projections and your executive summary.

Although there is no standard format, and to help you ensure nothing is overlooked, you can use our SBA business plan template to ensure you cover the most important areas of your company. A well-prepared business plan can improve your chances of getting an SBA loan.

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Step 1: write the company description.

This section should contain information about the purpose of your business. It should include a description of the problem or challenge your product or service aims to solve and what types of individuals or organizations will benefit.

A strong company description should also address the following questions:

• Why does your company exist?
• What problems does your business aim to address?
• What prompted you to start your business?
• What organizations or individuals will benefit from your company’s product or service?
• What makes your company different from others?
• What competitive advantages does your business offer?
• What would a successful product launch look like?
• Does your company have strategic partnerships with other vendors?

Step 2: Identify Organization & Management

Details about the legal and tax structure of your business should be included in this section. It can also be helpful to include an organizational chart of your company. You can include information about each team member’s background and experience and how it is relevant to your company:

• Highlight what business structure you have selected and why. Examples commonly include a sole proprietorship, limited liability company (LLC), partnership, S corporation (S-corp), and C corporation (C-corp)
• Include an organizational chart showing which team members are responsible for the various aspects of your company
• You can include resumes for members of your leadership team highlighting their experience and background

Step 3: Specify the Market Analysis

The market analysis section of your SBA business plan should look at who your competitors will be. Look at what they are doing well, what their weaknesses are, and how your company compares.

The SBA’s market analysis page contains information on how you can approach this. Questions you should also consider addressing should include:

• Who are the major competitors in the market?
• What are competitors doing well and are there areas for improvement?
• How does your company compare to the top competitors?
• How has the product or service evolved over time?
• Are there any trends for supply and demand throughout the year?
• What can your company do to stand apart from the top competitors?

Step 4: Write Descriptions of the Products or Services

In this section, you should detail the product or service offered by your business. You should explain what it does, how it helps your customers, and its expected lifecycle. You can also include things like any expected research and development costs, intellectual property concerns such as 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:

• Description of what your product or service does
• How your product or service works
• How your customers will benefit from your product or service
• Illustration of the typical lifecycle
• Any patents or intellectual property you or your competitors have
• Pricing structure
• Plans for research and development
• Discuss plans for handling intellectual property, copyright, and patent filings

Step 5: Indicate the Marketing & Sales Strategy

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:

• Who is your target audience?
• How will you attract customers?
• How and where will sales be made?
• If applicable, what will the sales process look like?
• Where will you market and advertise your product or service?
• How does your marketing strategy compare to other companies in the industry?
• How much should you spend on marketing?
• What is the expected return on investment for marketing?
• Do you have any data showing the effect of marketing?

Step 6: List Financial Data & Projections

If your business has been running, you should include information about its finances. This should include 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:

• Personal and business tax returns
• Balance sheets
• Profit and loss (P&L) statements
• Cash flow statements
• Hard and soft collateral owned by your business
• Business bank statements for the last six to 12 months

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.

• Projections for revenue and methodology used in arriving at these figures
• Expected shifts in revenue or expenses as a result of seasonality or other factors affecting supply and demand
• Expected expenses from loan payments, rent, lease payments, marketing and advertising fees, employee salaries, benefits, legal fees, warranty expenses, and more

You can 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 .

Step 7: Write the Financing Request

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:

• How much funding you need and why
• When you will use the funds over the next three to five years
• What you will use the funds for
• The expected impact this will have on your business and how it will help reach your business goals
• The anticipation of any recurring needs for additional funding
• Your strategy for how you expect to pay off the loan
• Any future financial plans for your business

Step 8: Fill In the Appendix & Supplemental Information

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:

• Business licenses
• Certifications or permits
• Letters of reference
• Photos of products
• Resumes of business owners
• Contractual agreements and other legal documents

Step 9: Complete the Executive Summary

The executive summary, which is the first section in a business plan, should be no more than one to two pages and 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:

• Your company’s mission statement
• The background and experience of your leadership team
• The product or service and what purpose it serves
• Your target market for the product or service
• Competitive analysis of other products and services
• Your competitive advantage or why your company will succeed
• Marketing and sales strategy
• Financial projections and funding needs

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 .

Additional Resources for Writing an SBA Business Plan

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:

• SBA: SBA’s business guide contains information on how you can start a small business. It includes steps on creating a business plan, funding your company, and launching a business.
• SCORE: Through SCORE, you can request to be paired with a mentor and get business-related education. Educational courses come in several formats, including webinars, live events, and online courses.
• Small Business Development Center (SBDC): SBDCs provide training and counseling to small business owners. This can help with various aspects of your company such as getting access to working capital, business planning, financial management, and more. You can use the SBA’s tool to find your closest SBDC .

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 utilize resources through organizations such as SCORE and the SBA itself.

About the Author

Find Andrew On LinkedIn

Andrew Wan is a staff writer at Fit Small Business, specializing in Small Business Finance. He has over a decade of experience in mortgage lending, having held roles as a loan officer, processor, and underwriter. He is experienced with various types of mortgage loans, including Federal Housing Administration government mortgages as a Direct Endorsement (DE) underwriter. Andrew received an M.B.A. from the University of California at Irvine, a Master of Studies in Law from the University of Southern California, and holds a California real estate broker license.

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How to Write an SBA Business Plan + Template

Noah Parsons

10 min. read

Updated November 21, 2023

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:

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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 .   

Create a business plan that maximizes your chances of securing funding

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.

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How to Write a Business Plan for SBA 7(a) Loan Applications

If you’re applying for an SBA 7(a) loan, your lender may ask that you provide a business plan as part of the application. A business plan is one of the best documents lenders can use to fully understand your company’s structure, product, leadership, goals, and projects. This document helps expedite the underwriting process for your loan application because it gives your lender the crucial information they need to efficiently secure your funding.

In this article, we’ll walk through how to write a standard business plan. We’ll also share specific tips from our team of lending experts for business owners writing theirs for an SBA 7(a) loan application. Download our free business plan template to get started.

I. Executive Summary

This section should be a clear snapshot of your business. Think of the business plan’s Executive Summary as the ‘main idea’ of the entire plan. In a few paragraphs, the Executive Summary should concisely explain the service or product, your customer, and a high-level overview of your growth plans.

Lender Tip: You may want to write the Executive Summary last. Once you complete the rest of the sections in the business plan, the main ideas that need to be included in the summary may be clearer and easier to write.

Ii. company description.

This section should explain what you offer, how you do it, and why. Include your mission statement, business history, business model, and your legal structure in this section. Make sure to showcase your company’s history in the Company Description. SBA lenders want to understand your business’s trajectory up to this point, and your goals for future growth.

III. Market Analysis

The Market Analysis is a comprehensive evaluation of the industry segment your business falls into. It requires you to research the overall industry, your customer, your competition, and your own potential for growth.

Start by identifying your target market. Share data that illustrates the size and value of this market, and any recent trends that you expect will affect the industry in the near future.

Next, share specific statistics about your target customer, their spending habits, and how it would affect their abilities to pay for your product or service.

Finally, explain how your business will fit into the present landscape. Who are your competitors, and how could their business support or threaten your growth? What unique value does your company bring to the table, and how do you expect that to pay off based on the current state of the market? Reference your financial projections to support your potential earnings based on the market.

Lender Tip: Your Market Analysis should depict your company’s competitive position. You may choose to format this information as a SWOT Analysis table to clearly highlight your business’ strengths, weaknesses, opportunities, and threats. 

Iv. organization and management.

Share how your company is structured and the role each of your principal members plays in the success of the business. Detail your leadership team’s job responsibilities, and make sure you clearly describe how each team member contributes to the day-to-day operations of the company. Include any qualifications, certifications, and/or prior management experience for you and your team.

Lender Tip: This section is a good place to reference CVs or resumes for your primary leadership team. For the SBA loan application, your lender may require resumes that showcase the relevant experience of you or your team members that would contribute to your company’s success. Describe your team’s experience in this section, and attach full resumes in the Appendix of the Business Plan.

V. service or product line.

Explain what your business will offer. Briefly describe the services or products you currently offer and your pricing structure. Include relevant details on the product lifecycle and list any patents or copyrights.

VI. Marketing and Sales

This section should include how you plan to reach your customer, grow your base, and make sales. Your Marketing strategy may evolve over time, but this section should outline a general plan for your business now and into the near future.

Be sure to detail how a sale is made, including which channels are used in the buyer’s journey. Whether sales are made on a website, through social media channels, in stores, through meetings facilitated by trade shows, or a combination of these channels, be sure to list all relevant sales methods.

VII. Funding Request

The Funding Request section is unique to business plans written for financing applications. For the SBA 7(a) loan application, the Funding Request section of your business plan should detail how much money you need and what you plan to use it on. Are you purchasing long-term fixed assets like commercial real estate? Do you need more working capital for the upcoming year? Are you expanding or renovating your facilities? Detail this information in this section. Make sure you explain how your business will benefit and grow by using the loan.

Lender Tip: Keep in mind that borrowers applying for an SBA 7(a) Loan Program must plan to use the funds for one of the eligible uses of proceeds to qualify for financing. You can read more about the projects that fall under the SBA’s criteria in our SBA Loan Basics article.

Your completed business plan is a useful tool to keep on hand. Just be sure to edit it often. Your strategies, product mix, and goals may evolve. Your business plan should accurately reflect the most up-to-date phase of your business. Keep this template bookmarked as a reference for future versions.

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A Guide to SBA 7(a) Loans

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Thanks to their low interest rates, high loan ceiling, and extended repayment terms, SBA 7(a) loans are the most popular and straightforward U.S. Small Business Administration payouts. Plus, they can be used for a variety of purposes.

We understand that financing is complicated, and navigating through a handful of funding options may feel like finding a needle in a haystack. Fortunately, Business.org has your back. Here’s some further insight to see if the SBA 7(a) loan guaranty program is the right financing option for you.

Lendio partners with over 75 lenders, which improves your odds and efficiency to get the funding you need.

Qualifications:

$50k in revenue

6 mos. in business

560 credit score

SBA 7(a) loans and business resources

Sba 7(a) overview, sba 7(a) loan rates and terms, sba 7(a) loan requirements, sba 7(a) loan down payment.

• SBA 7(a) vs. 504

SBA 7(a) lenders

• SBA 7(a) calculator

The SBA, which stands for the U.S. Small Business Administration, is a federal agency that gives budding entrepreneurs the same access to working capital as well-established organizations.

The most common misconception about the SBA is that the agency actually lends money to businesses. On the contrary, the SBA uses federal money to guarantee up to 85% of the loan amount provided by banks and other loan providers. This means less risk for lenders. And less risk for lenders means more small businesses will be considered for traditional lower-rate financing.

SBA loan benefits don’t stop there. As we mentioned above, SBA 7(a) loans are designed for a wide variety of uses:

• Establishing working capital
• Refinancing debts
• Purchasing equipment
• Buying land
• Expanding existing businesses

By signing up I agree to the Terms of Use.

The SBA 7(a) loan terms are some of the most ideal on the market, offering flexibility, longer terms, and lower down payments compared to other small-business loan options . Participating lenders set their interest rates based on the loan term and size, daily prime rate (a base rate on loans determined by banks), and a fixed base rate known as the spread (the average difference between interest rates for borrowers and depositors). The daily prime rate goes up or down depending on how the US economy is doing.

The current maximum interest rate ranges from 5.5% to 8%. This number is determined by the size of the loan. If you have excellent credit, you may be able to negotiate a lower interest rate. Depending on which lender you’re partnering with, you may also be charged an origination fee or a loan packaging fee. Terms are up to 7 years for working capital, 10 years for equipment, and 25 years for real estate.

Each loan is unique, so it’s difficult to say how quickly you’ll receive funding. SBA Express loans and SBA 7(a) Advantage loans, two variations of the standard SBA 7(a) loan, are available to speed up the approval process.

SBA 7(a) loans aren’t the easiest loan program to qualify for. They require a credit score of at least 650 and a gross annual revenue of $100,000 or more. You’ll also need to be in business for at least two years. Businesses with recent bankruptcies, foreclosures, or tax liens will most likely be denied funding. To speed up the approval process, round up the following documents:

• 3 years of business tax returns
• 3 years of personal tax returns
• Copy of original business license or certificate
• Records of loan application history
• Business lease
• Resumes for each principal
• YTD profit and loss statement
• YTD balance sheet
• Debt schedule

When it comes to qualifying for a business loan, there’s no one-size-fits-all answer. Most lenders take a number of factors into consideration. If you’d like to learn more about how to get approved for a business loan, we encourage you to explore the most important business loan requirements .

When applying for an SBA 7(a) loan, be prepared to submit a 10% down payment before receiving the funds. For loans of $350,000 or higher, you may also have to secure the loan with some collateral. If you don’t have enough business collateral, offering personal collateral will help you qualify.

SBA 7a loan vs 504

Of all the types of SBA business loans , the 7(a) and 504 are among the most popular. Both offer a slew of benefits for small-business owners, but they have slight differences.

Created for small businesses looking to buy or build commercial real estate, CDC/504 loans are made up of two different loans. One comes from a bank that funds about 50% of your financing, and the other comes from a local community development corporation (CDC) who funds about 40%. The leftover 10% will come from the borrower.

When applying for a CDC/SBA 504 loan, your business must monopolize at least 51% of an existing commercial building or 60% of a new one. Similar to SBA 7(a) loans, CDC/SBA 504 loans require a credit score of 680 and have a maximum loan amount of $5,000,000.

The CDC determines the rates, fees, and terms of the loan. For 10-year loans, you’ll have a 2.231% fixed interest rate. If you opt for a 20-year loan, be prepared to pay 2.364% fixed interest.

Data effective 11/21/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Lendio is an online marketplace that helps business owners see all of their loan options to help them find the best rate. Its SBA loan amounts range from $50,000 to $5,000,000 with 10- to 30-year loan terms. If you’re looking for fast funding, look elsewhere. Lendio takes 30 to 90 days to fund the loan.

To help navigate your SBA loan options, take advantage of Lendio's personal loan manager.

SmartBiz caught our eye thanks to its low rates, which range from 4.75% to 7%. Plus, its platform offers a fast, less cumbersome way to apply for an SBA loan. It does, however, require more documentation than other online small-business lenders.

If you have shaky finances, you may need to seek funding elsewhere. The typical SmartBiz borrower has at least two years in business and an annual income of at least $100,000.

Wells Fargo

As a giant financial institution, Wells Fargo has helped countless small businesses grow. Its terms are up to 7 years for working capital, 10 years for equipment, and 25 years for real estate.

As a bonus, Wells Fargo’s customer service ratings are more favorable than most corporate giants. If you don’t mind working with large corporate entities and have a solid credit history, Wells Fargo is worth considering.

Bank of America

An SBA loan from Bank of America is one of the most sought-after loans out there. Ranging from $350,000 to $3.5 million, the SBA 7(a) loan from Bank of America is a great option for small-business owners looking for flexible, low-cost funding to start or expand their businesses. It also matches Wells Fargo’s terms: 7 years for working capital, 10 years for equipment, and 25 years for real estate.

It’s worth noting that the typical time to fund is roughly three weeks, which beats some of the other lenders on our list.

JPMorgan Chase Bank

JPMorgan Chase Bank consistently stays ahead of the pack thanks to the sheer volume of SBA loans it processes and funds. Chase offers three different SBA loan programs: the 7(a), the CDC/504, and the SBA Express. Although Chase doesn’t have a hard-and-fast rule on what interest rate it charges you, rest assured that the SBA sets a cap on how much it can add on to the national prime rate. In a rough estimate, your Chase 7(a) loan won’t have an interest rate of more than 10%.

Searching for a more thorough list of SBA lenders ? You can locate additional local SBA lenders through sba.gov.

SBA 7(a) costs

Your SBA loan payment is determined by loan amount, interest rate, and terms. You’ll also have to pay a guarantee fee, which is usually a percentage of the loan based on how much of the loan is guaranteed and the length of the repayment term. How much you borrow is influenced by qualifying components, including your personal credit score, financial projections, what you can afford, and how the loan will be used.

Avoid surprise costs by discussing additional fees with the lender, such as application fees and origination fees. To possibly reduce loan costs, ask your lender about discounts and any potential prepayment penalties.

Estimate your loan payments through our free SBA business loan calculator

The takeaway

SBA-backed loans, particularly the 7(a), are a hot commodity in the loan marketplace thanks to their lower rates. Although they may be considered a last resort for business owners who can’t get approved for traditional funding, they can help you start, maintain, or expand your business.

Think a 7(a) loan sounds right for you? Learn how to get an SBA loan for your business.

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

1. Congressional Research Service, “ Small Business Administration 7(a) Loan Guaranty Program .” Accessed December 6, 2022.

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SBA Loan Checklist: Requirements and Documentation Needed for an SBA 7a Loan

Are you a small business owner seeking financing to grow your business? Look no further! The SBA 7(a) loan might be the perfect solution for you. This comprehensive guide will help you navigate the complex world of SBA 7(a) loans, understand eligibility requirements, and streamline the application process. Buckle up, and let’s dive into the world of SBA 7(a) loans!

Key Takeaways

• Understand SBA 7(a) loan requirements and eligibility criteria.
• Prepare documents including financial statements, tax returns, collateral documentation & personal/business information for a successful application process.
• Explore alternative financing options such as business term loans, lines of credit or invoice financing if ineligible for an SBA 7(a) loan.

Understanding SBA 7(a) Loan Requirements

The SBA 7(a) loan is a popular financing option for small businesses, offering favorable rates and flexible repayment terms. To qualify for an SBA 7(a) loan, businesses must meet certain eligibility requirements, including business size, industry, and financial health criteria. The maximum loan amount is determined by these factors, with a significant amount available for qualified businesses seeking sba loans.

We will now delve into these requirements in more detail.

Business Size and Industry Standards

You must meet the SBA’s size standards to be eligible for an SBA 7(a) loan. This applies to all businesses that wish to obtain such a loan. For manufacturing and mining industries, this means having fewer than 500 employees, while non-manufacturing industries must have an average annual receipt of under $7.5 million.

Business assets significantly influence the determination of eligibility for an SBA 7(a) loan. Possessing a detailed business plan that effectively showcases your business’s potential and your dedication to its success is vital.

A good personal credit score is also an important factor for SBA 7(a) loan approval.

Financial Health Factors

In addition to meeting size and industry standards, your business must demonstrate strong financial health to qualify for an SBA 7(a) loan. Creditworthiness, cash flow, and debt service coverage ratio are all essential when evaluating a business. These considerations help to ensure the financial stability of an organization, which is why SBA guarantees play a crucial role in the approval process and meeting the sba loan requirements.

A minimum credit score of 640 is generally required for obtaining financial assistance through an SBA 7(a) loan. Cash flow is another determinant, as it is evaluated by lenders to determine if your business can comfortably cover loan payments and other financial obligations.

The debt service coverage ratio is a key metric utilized by lenders to judge a business’s capacity to settle its debts. It uses the cash flow of the company to calculate finances and determine if it can handle the payments for those debts.

Additional Eligibility Criteria

Apart from size, industry, and financial health, there are additional eligibility criteria that your business must meet to qualify for an SBA 7(a) loan. These include:

• Personal investment
• Sound business purpose
• Credit history
• Personal guarantee
• No delinquencies

A good credit score increases the probability of approval for an SBA 7(a) loan. Having sufficient cash flow also significantly impacts the approval process.

Furthermore, your business must be in operation for a minimum of two years, provide a 10% down payment for specific purposes, and supply collateral for loan requests exceeding $25,000. Lastly, a personal guarantee is required, signifying that the borrower is personally liable for repaying the loan if the business defaults.

The SBA 7(a) Loan Application Process

Having grasped the eligibility requirements for an SBA 7(a) loan, let’s move on to the application process. The first step is to find a certified SBA lender in your area.

The SBA 7(a) loan application comprises three primary components: the 7(a) LGPC Submission Cover Sheet, SBA Form(s) 1919, and SBA Form 1920, which are submitted to the loan guaranty processing center. The checklist for the SBA 7(a) loan application includes several documents, such as a Borrower Information Form, Personal Background and Financial Statement, Business Financial Statement, Business Certificate/License, Loan Application History, Income Tax Returns, Resumes, Business Overview and History, and a Business Lease.

As a borrower, your responsibility is to provide information for Form 1919. Depending on the intended use of the funds and any fees paid to a loan package, broker or agent, other SBA documents may be necessary. Before signing any loan documents, make sure to thoroughly review all applicable requirements.

Keep in mind that the processing time for an SBA loan application could take up to several months. However, having organized documents can expedite the application process.

Finding an SBA-Approved Lender

To begin your journey towards securing an SBA 7(a) loan, you need to find a participating SBA lender. Some SBA-approved lenders include:

• Live Oak Bank
• Huntington Bank
• Wells Fargo
• Newtek Small Business Finance
• Celtic Bank

Working with an experienced lender can provide numerous advantages, such as access to more competitive rates, improved terms, and a more efficient loan process. Additionally, seasoned lenders are likely to have a greater understanding of the complexities of the SBA loan process and can offer valuable advice and recommendations.

Preparing Your Loan Application

As you prepare your SBA 7(a) loan application, you must collect all the required documents, such as financial statements, tax returns, and collateral documentation. A comprehensive business plan is crucial for demonstrating your business’s potential and commitment to success.

Organizing your documents and ensuring their accuracy can help expedite the application process and increase your chances of approval. Additionally, providing accurate and complete documentation will help lenders to better understand your business’s financial standing and repayment capacity.

Essential Documents for Your SBA 7(a) Loan Application

In order to secure a successful SBA 7(a) loan application, providing all the required documentation is imperative. This includes personal and business information, financial statements and tax returns, and collateral documentation.

We will now examine each of these document categories in greater detail.

Personal and Business Information

The personal and business information required for an SBA 7(a) loan application includes details about your legal structure, ownership, and tax identification numbers. It’s important to provide accurate information, as discrepancies can delay the approval process or even lead to rejection.

Ensuring that all the necessary documents are in order will help streamline the process and increase your chances of obtaining the financial assistance you need to grow your business.

Financial Statements and Tax Returns

Submitting precise financial statements and personal tax returns is key to the success of your SBA 7(a) loan application. These documents offer the lender insight into your business’s financial standing and repayment capacity.

For your application, you’ll need to provide the following documents:

• Personal financial statement
• Current income statements
• Balance sheets
• Filed tax returns
• YTD profit and loss statements

Accurate and complete documentation will help ensure a smooth application process and keep your business moving forward.

Collateral Documentation

Collateral is often required for securing an SBA 7(a) loan, and providing the necessary documentation is essential. Collateral documentation may include:

• Personal residential and/or investment real estate
• Balance sheet
• Year-to-date profit and loss statement
• SBA Form 1919 (Borrower Information Form)
• SBA Form 413 (Personal Finance Statement)
• Agreement to purchase the business

High-value assets such as equipment or real estate can be used to secure your loan, ensuring the lender has a means of recovering their investment in the event of default. This allows you to access loan proceeds with confidence.

Tips for Streamlining the SBA 7(a) Loan Application Process

Navigating the SBA 7(a) loan application process can be challenging, but there are several strategies you can employ to streamline the process and increase your likelihood of approval. These strategies include working with a loan specialist, ensuring accurate and complete documentation, and maintaining open communication with your lender.

By following these tips, you can help ensure a smoother application process and a higher chance of securing the financing your business needs.

Work with a Loan Specialist

Partnering with an SBA loan specialist can be highly beneficial in navigating the complex application process and understanding the requirements. An SBA loan specialist can advise you on the most suitable loan option for your business and help you gather the necessary documents.

Their expertise and guidance can help you avoid potential pitfalls and improve your chances of securing the financing you need to grow your business.

Ensure Accurate and Complete Documentation

Submitting accurate and complete documentation for your SBA 7(a) loan application is of utmost importance. Errors or missing information can lead to delays in processing your application or even rejection.

Organizing your documents and ensuring their accuracy can help expedite the application process and increase your chances of approval. By presenting a clear and thorough picture of your business’s financial standing, lenders can better evaluate your repayment capacity and the associated risks with the loan.

Maintain Open Communication with Your Lender

Throughout the application process, it’s vital to maintain open and clear communication with your lender. Here are some essential steps to ensure effective communication:

• Promptly respond to emails and phone calls from your lender.
• Provide all requested documents in a timely manner.
• Ask questions if clarification is needed.

By following these steps, you can maintain a strong line of communication with your lender.

Failure to maintain open communication may result in delays, decreased trust, and potentially even rejection of your loan application. By fostering a strong relationship with your lender, you can improve your chances of securing the financing your business needs.

Alternative Financing Options for Ineligible Businesses

If your business doesn’t meet the eligibility requirements for an SBA 7(a) loan, don’t worry! There are alternative financing options available, such as business term loans, lines of credit, and invoice financing. Each option has its own set of advantages and disadvantages, and it’s important to carefully evaluate which one best suits your business’s needs.

We will now delve deeper into these alternatives.

Business Term Loans

Business term loans are a popular financing option for small businesses that provide a lump sum of funding to be repaid over a set period, usually ranging from one to five years. These loans can be used for a variety of business objectives, such as acquiring equipment, expanding operations, or refinancing existing debt. One such loan program caters specifically to the needs of small businesses, ensuring they have access to the funds they require.

Business term loans provide access to capital for stimulating growth and expanding operations, however, it is crucial to meticulously evaluate the repayment terms and interest rates before opting for this financing solution.

Lines of Credit

A business line of credit offers the following benefits:

• Revolving credit facility
• Borrow up to a predetermined limit
• Interest payable only on the amount borrowed
• Enhanced cash flow for businesses that do not meet eligibility criteria
• Flexible repayment options
• Access to funds
• Opportunity to establish business credit

This financing option, providing working capital, can be particularly useful for businesses with fluctuating cash flow needs or those looking to cover short-term expenses.

Invoice Financing

Invoice financing is a borrowing option for businesses that need to cover expenses while awaiting customer payments. It involves borrowing against outstanding invoices to bridge the gap between payment and receipt.

Invoice financing can provide ineligible businesses with:

• Improved cash flow
• Faster access to funds
• Potential for business growth
• Optional credit control services

Although this financing alternative can aid businesses grappling with cash flow issues, it is crucial to meticulously weigh the fees and terms linked with invoice financing before deciding if it aligns with your business needs.

In conclusion, the SBA 7(a) loan is a powerful financing option for eligible small businesses seeking to grow and expand. By understanding the eligibility requirements, properly preparing your loan application, and maintaining open communication with your lender, you can improve your chances of securing this valuable financing. However, if you find that your business doesn’t meet the eligibility criteria, there are alternative financing options available that may better suit your needs. Remember, the key to success is perseverance and dedication – don’t let financing obstacles hold you back from achieving your business dreams!

Frequently Asked Questions

What documents are required for sba 7a loan.

To apply for an SBA 7a loan, you will need to provide Personal Tax Returns, an Image of Driver's License or Government-issued ID, a Personal Financial Statement or SBA Form 413, Agreement to purchase the business, Letter of Intent to buy the business, Business tax returns from the past three years, Outstanding business debt, Long-term business contracts, Documentation of business assets, and a Business lease agreement.

How hard is it to get approved for SBA 7a loan?

Getting approved for an SBA 7(a) loan can be difficult due to the strict requirements such as a good credit score of 690 or higher, annual revenue, and at least two years in business. Lender criteria may also vary.

Do you need collateral for SBA 7a?

Collateral may be required for loans of $350,000 or more, and if you default, the lender can seize it. SBA does not require collateral for loans of $50,000 or less, except for International Trade loans.

How can I find an SBA-approved lender?

To find an SBA-approved lender, you can use the online directory, your local district office, or a loan specialist.

What are some alternative financing options for businesses that do not qualify for an SBA 7(a) loan?

Alternative financing options for businesses that do not qualify for an SBA 7(a) loan include business term loans, lines of credit, and invoice financing.

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For small businesses looking for help to get started or grow, an SBA loan can be a good option for financing. SBA loans are small business loans provided by private lenders and backed by the U.S. Small Business Administration. As of July 2023, the SBA has approved over 40,000 SBA loans worth more than $19 billion.

The most common type of loan the Small Business Administration grants is the 7(a) loan. While the requirements to qualify for it can be difficult to meet, the loan terms are typically favorable — making it a desirable way for small business owners to receive financial support.

Key takeaways

• SBA 7(a) loans are the most common type of loan issued by the Small Business Administration
• SBA 7(a) loans offer favorable terms for qualified small businesses
• Qualifying for an SBA 7(a) loan requires meeting strict standards
• Several types of SBA 7(a) loans can be used for numerous purposes, from working capital to purchasing equipment and supplies

What is an SBA 7(a) loan?

An SBA 7(a) loan is a small business loan issued as part of the Small Business Administration’s 7(a) Loan Program. It is the most common loan offered by the agency and grants small businesses access to capital needed for a number of different purposes. SBA 7(a) loans can be used for short- and long-term working capital, refinancing existing business debts, purchasing new machinery and equipment, acquiring supplies or other purposes to improve business operations.

SBA 7(a) loans have a maximum lending amount of $5 million. Lenders that work with the SBA help businesses apply for a loan with the terms that best meet their needs .

Types of SBA loans

Sba 7(a) loan requirements.

While SBA 7(a) loans offer businesses access to capital with favorable terms, they have a relatively strict set of requirements that applicants must meet to qualify for a loan. According to the SBA, businesses that apply for SBA 7(a) loans must meet the following criteria:

• Operate for profit
• Meet the SBA definition of a small business
• Do business in the United States or its territories
• Demonstrate a need for a loan
• Demonstrate that the funds will support a sound business
• Up to date on any existing U.S. government debt obligations
• Be creditworthy and reasonably assure repayment of the loan

Lightbulb Bankrate insight To be considered creditworthy, the SBA typically requires a credit score of 690 or above and prefers owners over more than 20 percent of the business provide a personal guarantee .

Typically, the SBA will require businesses to explore other financing options before pursuing an SBA 7(a) loan. The agency also typically requires businesses to be in operation for two years before applying and show annual revenue to ensure funds are available to pay back the loan.

How to apply for SBA 7(a) loans

Applying for an SBA 7(a) loan requires working with an SBA lending partner. You will go through a multi-step process that will take you from application to, if approved, securing the loan.

Find a lender

Many financial institutions offer SBA 7(a) loans, from banks to credit unions. While you can work with a local lender, you can also find national institutions that offer financing options, including Chase and Bank of America .

The SBA offers an online tool that helps match businesses with lenders. Finding the right lender for your situation is key, as they’ll have experience navigating the application process. It can help you apply and ultimately give you the best odds of getting approved for a loan.

Submit an application

Once you have selected your lender, you can begin the application process. This will require gathering the necessary documents and filling out the proper application to be considered for approval.

There are several documents that you may be required to submit in order to be approved for an SBA 7(a) loan. While your lender will help you submit the proper forms, like SBA Form 1920 , you may need the following:

• SBA Form 1919 (Borrower Information Form)
• SBA Forms 912 and 413 (Personal background and financial statement)
• Business financial statements, like balance sheets and profit and loss statements
• Projected financial statements
• Business certificate or license
• Prior loan applications
• Income tax returns
• Information on each business owner
• Business overview and history
• Business lease

Await approval

Once you submit your SBA 7(a) loan application, you will have to wait for the SBA to review it and make a decision. The timeline for this can vary depending on the loan type and amount.

SBA Preferred Lenders may approve loans faster than non-preferred lenders. The SBA states its turnaround time is five to 10 business days for 7(a) loans, but any missing documentation, application errors or other lender requirements could delay the process. Once approved, funding is usually issued within 30 to 90 days.

SBA 7(a) loan alternatives

SBA 7(a) loans aren’t necessarily the best option for every business. If these loans don’t quite fit your business needs, if your business doesn’t qualify, or if you are denied an SBA loan , you can consider the following alternatives :

• SBA microloans : If you are looking for a smaller amount of funding to fuel your operation, consider an SBA microloan . These are available for up to $50,000 and have more flexible requirements to accommodate businesses.
• Online lenders : Online lenders offer faster funding than traditional lenders and the SBA. Loan amounts vary, but online lenders typically have less strict requirements. These lenders are a good option for those who may not meet the SBA’s credit score requirements.
• Business credit cards : Business credit cards offer a revolving line of credit catered to business owners. Credit limits will be lower than SBA loans, but business credit cards often come with perks, like travel or cash-back rewards or introductory APRs. Additionally, if you pay the balance in full every month, it won’t accrue interest.
• Grants : Although grants are competitive , they offer small businesses — including those from underserved and minority communities — the opportunity for financing that doesn’t require repayment.

There are pros and cons to all business financing, including SBA loans. Before signing a loan agreement , be sure to review all financing options , like:

• Crowdfunding
• Business lines of credit
• Merchant cash advances

The bottom line

SBA 7(a) loans are a great option for small businesses that meet the SBA’s requirements, as they offer flexible loans that can be used for a number of purposes and have favorable interest rates for businesses. While there alternatives are available for businesses that do not meet the SBA’s criteria, it’s a great financing option for businesses that qualify and are looking to grow.

Frequently asked questions

How hard is it to qualify for an sba 7(a) loan, do you need collateral for an sba 7(a) loan, do you need a business plan for an sba 7(a) loan, related articles.

SBA loan statistics: Top lenders

What is the SBA 7(a) loan program?

SBA Express loan: Requirements and application

SBA 7(a) vs. 504 loans

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SBA Business Plan Template Essentials: The Complete Guide

Free Business Plan Template

Ayush Jalan

• December 12, 2023

10 Min Read

The very first thought of any entrepreneur before setting up a business is capital. And taking a loan to set up your business is a common way to do that. If done right, it can ensure a high ROI. It also provides you with the scope for the expansion of your business without compromising on your operational funds.

If you are a small business owner, you are in luck.

The Small Business Administration ( SBA ) is a U.S. government agency that provides assistance and guidance to small businesses by providing tools like business planners, training programs, and small business loans.

It also provides a professional business plan template exclusively to guide businesses while applying for a small business loan. To do so, we recommend having a strong sense of what your business is and does, along with a solid plan.

If your business plan is not effective and goal-appropriate, you might have trouble navigating an SBA template. Hence, while drafting a business plan it is crucial to have a clear vision of the goal you want to achieve through the plan.

In this article, we’ll see what an SBA business plan is and what it includes.

What Is an SBA Business Plan?

An SBA business plan is essentially the mapping of the objectives of your business with precise details of how you will execute them. It is a well-structured and detailed way to represent your business, its strategies, and operations. When applying for an SBA loan, having an SBA business plan is a requirement.

Creating your business plan using an SBA business plan template helps you stay on track and not deviate from the requirements of the loan. It shows lenders that you have complete knowledge about your business venture and instills trust.

Importance of an SBA Business Plan

Research shows that businesses that create and follow a plan are 16% more likely to succeed than those that don’t plan. Regardless of the type of business plan you choose, having a plan is always beneficial.

We recommend the SBA business plan for companies that are seeking a small business loan. The SBA business plan template is drafted exclusively to help entrepreneurs navigate their way through the whole process of the SBA loan.

It is designed to assist entrepreneurs to seek answers to tough questions before they start building their businesses. An SBA business plan helps you develop a strategic framework for running your business.

It propels you towards researching your market, identifying your competition, and analyzing all the possible methods of implementing your strategies. Now that you know what an SBA business plan is and its significance, it is time to dive into the understanding of its contents.

Let’s see what an SBA business plan template contains.

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SBA Business Plan Template

As with many traditional business plans, an SBA business plan also follows a similar format. The SBA business plan template contains nine major sections. These sections include the executive summary, company description, market analysis, organization, product description, marketing, funding request, and financial projections. Let’s try to understand each.

1. Executive Summary

An executive summary is simply an introduction to your SBA business plan. It should contain a brief abstract of your business plan. This section will include the noteworthy points of your plan for anyone to get a quick gist of your business and your strategies.

This section of your plan should contain the following aspects:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

• Target market: Mention your target customers to whom you are selling your product or service.
• The solution you offer: Explain how your product or service is the ideal solution for the problem your target customer base is facing. Business model: Your business model, at its core, is how you will generate sales and make profits.
• Market competition: Identify your potential competition in the market and mention them.
• Marketing and Sales Strategy: Describe how you will market your product and mention your sales channels.
• Financial projections: This is essentially a forecast of future expenses and revenues.
• Execution of your plan: Explain how you will implement your plan and strategize all your objectives.

2. Company Description

In this company overview section of your SBA business plan, you will describe what your company does and every detail about your company. It includes your target customers, your business partners, your competitors, and more.

Below are the major key points this section should include:

• Identity and objective: Mention your company’s identity and what your company does. You may also include your company’s ethics and values.
• Your company’s offerings: Define in detail what your company offers. Explain the product or service that you are selling.
• The problem you solve: Specify the problem you chose to solve to cater to the needs of your customers.
• Target customers: State which section of the people you have targeted. You should also mention your customers’ priorities and values.
• Your strengths: Include the advantages you have over your competition in the market. You can also list these companies’ names and mention how you are different from them.
• Partners: Mention your company’s business partners, partnership period, and how they contribute to the business.

3. Market Analysis

In this section, you write a detailed analysis of the market in which you’re going to set up your business. The following are the aspects you should include in your SBA business plan:

• Mention in detail what other companies in your industries are doing.
• Explain in detail the strengths and advantages of your competition
• Specify the market trends and themes that have occurred
• Examine the reasons that are responsible for the success of other companies in your industry.
• Figure out if you are capable enough to outrun your competition by doing what they are doing but in a better and more efficient way.
• Research if any of your competitors have strategic advantages like the ideal location, cheap procurement of raw materials, etc.

4. Organization and management

In this section, you will define the structure of your business. This will include the legal and organizational structure of your business, and the management practices you follow.

Legal structure

Here, you describe the legal structure of your business . Is it going to be a general or limited partnership, an LLC, a sole proprietorship, or be incorporated as a C or S corporation? Explain in complete detail how you will structure your business legally and how it will impact your business operations.

Organizational chart

Attach an organizational chart of the internal structure and hierarchy of your business. This will include roles, responsibilities, and relationships between individuals in the company.

5. Service or Product

Once you’re done with the above, you now give a complete description of the product or service you’re selling to your customers. The following are the key aspects that this section of your SBA business plan should have:

• Describe in detail the product or service you’re providing to your targeted customer base.
• Explain the pricing of your product. You should also mention all the costs that have contributed to the final price of the product.
• List down all the possible uses of your product and how your customers will benefit from it.
• Discuss the product life-cycle of your product. Explain in detail the four stages of a product life-cycle: Introduction, growth, maturity, and decline.
• Include a plan mentioning how you will handle the intellectual properties, copyright, and patent filings.
• Mention all or any research and developments you have regarding your business.

6. Marketing and Sales

Next, include your marketing strategies , sales channels, and the budget of both. Below is the important point that should be in this section:

• Write a detailed plan of how you will market your product to draw your customers
• Provide the details of the sales process and mention the sales channels you are choosing.
• Mention the details of your budget regarding marketing and sales of the product
• Discuss the goals of your marketing and sales strategies
• Review and address your pricing strategy as it affects your marketing and sales.

7. Funding request

The most prominent reason why entrepreneurs create an SBA business plan is to make lenders believe that they are a viable and reliable business venture. This section is simply for putting forward your funding requests . The following should be included in this section:

• Specify the amount of funding you will require for running your business for the next five years
• Explain in detail how you will use the funding that was provided
• Mention what type of funding are you looking for
• Add a detailed description of your future financial plans, which include repaying debts, managing the cash flow , budgeting expenses, etc.

8. Financial Projection

The purpose of financial projection is to make it possible for the reader to assess your company’s financial stability. It includes the current financial reports of your business and future projections.

It is focused to convince potential funders that your company is financially stable and solvent. The below information should be included in your SBA business plan:

• Attach income statements for the past three to five years
• Attach balance sheets of the past three to five years
• Attach cash flow statements for the past three to five years
• Mention the collaterals that you possess
• Projected income statements
• Projected balance sheets
• Projected cash flow statements
• Budgeted capital expenditures

The ideal way to represent future projections is by using monthly or quarterly projections in the first year and henceforth with annual projections. Explain how the projections and the information represented are relevant to your funding request. Consider the SBA loan rates and the guarantee fee while projecting your new payment amounts.

9.  Appendix

The Appendix is the last section of your SBA business plan. It contains all the additional documentation that is important to explain a specific aspect of your business. It could also include documents that are exclusive to a particular lender that may not fit into the predefined outline of a business plan .

Usually, the common information in an appendix includes:

• Credit history
• Product photos
• Letters of reference
• Licenses and permits
• Legal documents

Get Your Small Business Started with an SBA Template

Choosing the perfect business plan for your business can be tricky, especially while seeking lenders to set up your business. However, it is not difficult once you know what your lenders are looking for in your business plan.

Fortunately, an SBA business plan is apt and compatible with all the requirements of lenders. Create your SBA business plan now and start your journey toward building your business.

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About the Author

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

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