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Funding Requirements in a Business Plan

… our funding requirements are …

The summary given in the funding requirement section should be consistent with the rest of the business plan. The amount needed, and when it is needed should follow from the detailed financial projections, and the purpose of the funding, sales and marketing, hire of employees, to achieve a milestone etc. should again link in with the rest of the plan,

Funding Requirements Presentation

This is part of the financial projections and Contents of a Business Plan Guide , a series of posts on what each section of a simple business plan should include. The next post in this series is the final section, and deals with the planned exit for investors.

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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How To Write the Funding Request for Your Business Plan

What goes into the funding request, parts of the funding request, important points to remember when writing your request, frequently asked questions (faqs).

MoMo Productions / Getty Images

A business plan contains many sections, and if you plan to seek funding for your business, you will need to include the funding request section. The good news is that this section of your business plan is only needed if you plan to ask for outside business funding. If you're not seeking financial help, you can leave it out of your business plan. There are a variety of  ways to fund your business  without debt or investors. Below, we'll cover how to write the funding request section of your business plan.

Key Takeaways

• The funding request section of your business plan is required if you plan to seek funding from a lender or investors.
• You'll want to include information on the business, your current financial situation, how the money will be used, and more.
• Tailor each funding request to the specific funding source, and make sure you ask for enough money to keep your business going.

The funding request section provides information on your future financial plans, such as when and how much money you might need. You will also include the possible sources you could consider for securing your funds, such as loans or crowdfunding. Later, you can update this section when you need outside funding again for business growth.

An Outline of the Business

Yes, you've done this already in past sections, but you want to give potential lenders and investors a recap of your business. In some cases, you might simply share the funding request section so you need to have your business details such as what you provide, information about your target market, your structure (i.e. LLC), owners' and members' information (for partnerships and corporations), and any successes you've had to date in your business.

Current Financial Situation

Again, you've provided some financial information in the financial data section , but it doesn't hurt to summarize. If you're submitting just the funding request, you'll need this information to help financial sources understand your money situation.

Provide financial details such as income and cash flow statements, and balance sheets in your funding request section.

Offer your projected financial information as well. If you're asking for a loan for which you'll be offering collateral, include information about the asset. If the business had debt, outline your plan for paying it off. Finally, share how you'll pay the loan or what sort of return on investment (ROI) investors can expect by investing in your business.

How Much Money Do You Need Now and in the Future?

Indicate what type of funding you're asking for such as a loan or investment. Outline what you need now and what you might need in the future as far as five years out. 

How Will the Funds Be Used?

Detail how you'll be using the money, whether it's for inventory, paying a debt, buying equipment, hiring help, and more. If you plan to use the money for several things, highlight each and how much money will go to each.

Most financial sources would rather invest in things that grow a thriving business than things that pay for debt or overhead expenses. 

Current and Future Financial Plans

Current and future financial plans include items such as loan repayment schedules or plans to sell the business. If you're getting a loan, outline your plans for repayment (although most lenders will have their own schedules). If you have plans to sell the business, let the lender know that and how it will affect them. Other issues to consider are relocation (if you move) or a buyout. Finally, let investors know how they can exit the deal, such as cashing out (and how long before they can do that).

You're asking for money, so you need to always be professional and know your business inside and out. Here are some other things to keep in mind:

• Tailor your funding request to each financial source : Lenders and investors need different information, such as loan repayment versus ROI, so create different reports for each. 
• Keep your funding sources in mind : Each resource will have different questions and concerns. Do a little research so you can address them in your report.
• Ask for enough to keep your business going : Don't be stingy, as you don't want your business to fail from a lack of money. At the same time, don't be greedy, asking for more than you need. 

How do you request funding for a nonprofit?

Most nonprofits seek funding in the form of grants. Write a grant proposal that includes information on the project or organization, preliminary budget needs, and more. Be sure to format it with a cover letter, proposal summary, the introduction of the organization, problem statement, objectives, methods, evaluation, future funding needs, and the budget.

What are three methods of funding?

Grants and scholarships, equity financing, and debt financing are the main three methods of funding for small businesses . Grants and scholarships do not need to be repaid and are often best for nonprofit organizations. Equity financing is when you receive money in exchange for ownership and profits. Debt financing is when you borrow money that needs to be repaid.

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Small Business Administration. " Fund Your Business ."

Congressional Research Service. " How To Develop and Write a Grant Proposal ."

Library of Congress Research Guides. " Types of Financing ."

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Write the Funding Request Section of Your Business Plan

Free Startup Fundraising Checklist

Aayushi Mistry

• December 12, 2023

While writing a business plan to seek funding, you must be clear about what needs to be written under the section where you would request funding. This is an important and essential section of your business plan.

What Is the Funding Request?

A funding request section of your business plan allows you to ask for the required fund. While writing the request, you always have to mention the timeline in which you will utilize the funds. Usually, this timeline is up to the next 5 years from the request.

The funding request may differ on the age of your company. If your company is only a start-up, it will have to provide more details than any older company. Generally, any business up to its 7th year is called a startup company. Although this criterion may differ with respect to location and industry.

Step-by-Step Guide to Writing the Funding Request of Your Business Plan

Before you start writing your requests, be clear about your requirements. And, in the same line, be very clear explaining it. Your readers want you to get to the point. So, they can make accurate decisions just in time. Moreover, it will also save you a lot of time and effort.

Once the facts and figures are drawn (accurately), you need to draft them properly into your business plan. And you have to be very careful and precise while doing it.

So ideally, you need to figure out your requirements. And then put it into the context of the business plan.

So, How to derive your funding requirements?

Deriving funding requirements get a little overwhelming. But if you take it one step at a time, it starts getting easier.

First, determine what you need money for

It could be for hiring new staff, getting new equipment, or starting your business at a new location . Just be very clear with the goals. Then list down the requirements and the required fund for it. In the end, sum it up. If you want funds for recovering your debts, explain all your debts in detail.

Now, It Is Time to Know How Much Amount Can You Get on Your Own.

• Calculate the financial resources: Look out for your saved capital in cash as well as in personal assets. Other than that, see if you can gather the funds from friends and family.
• Grants and subsidies: Check if your company is eligible for any government grants and subsidies. If yes, apply for it and add the amount. Calculate and find the difference between the required amount and the amount you can already put together. And that will be the amount you will be needing from the third party, investors, or from the bank. Once you have the right fund requirement at hand, list out the investors, moneylenders, and loans who can provide you with the sum.

Now, Let’s Start Writing Your Funding Request

1. Provide Business Information

Yes, you still have to give this brief even though you have already explained it in detail. No, it does not get redundant-It does not have to be. In fact, you can take it up as an opportunity to give a little recap to your potential prospects and moneylenders.

Moreover, sometimes, you might have to only send the funding request section and not the entire business plan. In such cases, such information comes handy.

So, here’s what you will have to explain in the funding request section of your business plan-

• Target Market
• Your business structure like LTD, LLC, or more
• Brief about your product/service
• Partners involved
• Business heir, if there exists.

2. Mention the Current Financial Situation

You might have provided some financial information in the financial section. But, you have to add some figures here anyway. Not only will make it contextual, but even easier to have a clear picture in one place.

Here are some financial details that you will have to include in this section:

• Quarterly as well as yearly cash inflow and outflow
• Balance sheets
• P&L statement
• Expected financial condition in the upcoming quarter and year
• Include the list of assets and their ownership details if you are asking loan from the bank
• If your business is in debt, explain the situation in the detail and a brief plan for paying it.
• Mention how much return on investment can they expect.
• In the end, mention how will you pay off the loan or transfer the ownership of the business.

3. Announce How Much Funds Do You Need?

When you explain the situation in brief and have all the facts and figures put aside, narrow it down to your requirements. Mention how much money you need.

4. Discuss Briefly How Will You Use the Money?

Here, you have to narrow down what you need the money for and how you are going to use it. Just list down the details and put the figure for it- so much like how you do your billing. If they are taking the money for multiple things, highlight every detail.

5. Dive Deep into Current and Future Financial Planning

You must have explained a little about the inflow and outflow in the financial section. But over here, you have to get into the details like-

• If you are getting a loan, outline your timelines for payments.
• If you are looking forward to selling, mention how it will affect the investors.
• And then, finally, mention the exit strategy . Your exit strategy includes how you will transfer the business ownership at the end.
• You only have to add the funding request if only you want the funding from outside. If you don’t want to raise your funds from a third party, then you don’t have to include them in your business plan.
• Your investors would like to invest in your business if only it is thriving or promising. They are less likely to lend money if you are in debt.
• You see, you are asking for money. So don’t take this section casually. Know your business inside out and only involve people who know everything about your business.
• Be as specific about your requirements and the funding that you require.
• If you are planning to send it to different investors, tailor your funding request according to the reader.
• All your sources have different mindsets and different funding criteria. Be very specific about it. Do detailed research before starting to write your funding request.
• Don’t hesitate while asking for the funds. Be open and ask just as much as your business really requires. But at the same time, don’t be greedy.

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated March 18, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information you need to cover in a business plan sometimes isn’t quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

If you’re looking for a free downloadable business plan template to get you started, download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

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

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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Business Plan Funding Request Section: How to Write Guide .

Sep 17, 2023 | Business Consulting , Business Growth , Business Performance , Business Plan , Financial Plan , Funding Needs , Funding Request , Small Business , Startup , Strategy

How to Write the Business Plan Funding Request

“It is more rewarding to watch money change the world than to watch it accumulate.” –Gloria Steinem.

By now, you’ve made significant progress in developing your business plan. With this, the eighth article in our Creating a Detailed Business Plan series will focus on including a funding request.

Business plans are generally the catalyst for requesting banks, lenders, and investors to invest money into a company . Usually, the business plan and funding help support business growth or rapidly scale a startup company.

As you can imagine, this makes the funding request section extremely important . Business plans can be written even with ample existing funding and can be in stages to support different business expansion phases. You can omit a funding request if you aren’t looking for outside investment.

The funding request section of your business plan is required if you plan to seek funding from a lender or investors.

Benefits of including a business plan funding request section

A business plan typically consists of various areas, and if you intend to secure funding for your business, it’s crucial to include the funding request section. Fortunately, this part of your business plan is only necessary if you plan to seek external financial assistance. If you don’t require any funding, you can skip this section.

There are various ways to fund your business without debt or investors. This article will help you create a persuasive funding request for your business plan.

What information is needed for the business plan funding request?

The business plan funding request section of your plan outlines your financial needs for the future, including how much money you require and when you will need it. You should also mention the various sources you could use to secure funding, such as loans or crowdfunding.

Remember that you can constantly update this section in the future if you require additional funding for business expansion.

How much money and how much duration must you include in your funding request?

A funding request is no time to be shy. Your readers will know what funding you’re after when they get to this section, so be forthright. Declare your business funding needs now and in the future. Give exact figures, and spell out any further infusions you’ll require over the next five years.

Explain how long the funds will be needed , when you plan on repayments, and when the investor can expect a return. It’s also helpful to spell out whether you’d prefer a loan, a grant, a direct investment, and any other relevant terms you would like included . For example, are you willing to give up equity in your business to secure the loan, or will you be personally underwriting the loan from your assets?

How do you plan to use the requested funds?

It’s unlikely that anyone will give you money if they don’t understand how you plan on using the funds. So be explicit when explaining the purpose of your request. For example, note whether the funding will go toward working capital, additional equipment, or business expansion to new premises or regions.

Describe your plans if you are growing your team or expanding your operation. If you plan on buying another company, explain what this will do for your bottom line and cash flow.

You might also use the funds to retire debt, create and market a new product line, or combine things. Whatever the use, be rigorous in your explanations.

Business banks and investors aim to secure a reasonable return on their investment. So, they’re far more likely to fund businesses that plan to use the money to grow and become more profitable.

But, on the other hand, if they get the sense that the money is just helping to string along a failing enterprise or the owner is not clear on the funding required, they’ll stay away.

What are your long-term plans for the business?

If you have any solid, situational plans for the business that might positively impact investors, you should spell them out.

Consider your plans for scaling your business. If there’s an expectation of a lucrative buyout or acquisition after meeting specific benchmarks, mention this. Describe your goals if you plan on selling a portion of the company to focus your efforts on more profitable areas.

Mention any primary debt service you plan to make, mainly if it will put your company on a firmer footing for the future.

Why should investors trust you?

This question is critical. It would help convince your readers that you would be a good steward of their money and your business. It’s essential to remember that those who are providing you with money are doing so with the expectation of being paid back and making a profit. If they don’t trust you or doubt your ability to make this happen, they may not be willing to get involved.

Explain the assumptions you’re making in your plans and provide the proper financials to support your contentions. Let the data speak. If you’re correct, the research will bear out our position.

Planning for your finances now and in the future

When it comes to financial planning and funding your growth , it’s essential to consider factors such as loan repayment schedules and potential business sales. If you are seeking a loan, it’s wise to detail your repayment plans, although lenders will likely have their agenda in place. If you plan to sell your business, it’s crucial to inform the lender and explain how this may impact them. Additionally, you should consider possible relocation if you plan to move or a buyout if that’s on the table. Lastly, informing investors of their exit options, such as the ability to cash out and the timeline for doing so, is essential.

Our upcoming article will focus on creating financial projections for a business plan.

You can achieve your goals, and Noirwolf is here to assist you.

Putting together a funding request can be daunting. Asking your accountant for help is always a good idea. You can also use tools like Microsoft Excel and financial planning software like LivePlan . If you need further assistance, we’re ready to help out.

Contact us today to learn more about Noirwolf Consulting services and how we can significantly help you .

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Contact Noirwolf Consulting today using the website contact form or by emailing [email protected] or call us at +44 113 328 0868.

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BUSINESS PLAN PROPOSAL FOR FUNDING

Your main reason for writing a business plan

A solid plan eases the intimidation of asking for money.

How to write a proposal for funding

The point of your business plan proposal’s funding section is to break down your request for money. Provide a clear, concise, defensible description of why your business is going to be successful, backed up with the financial information that will demonstrate how you’ll repay your loan. This part of your business plan will include a summary of information contained elsewhere in your plan, especially in the financial projections, executive summary and market analysis sections.

For many new business owners, the top motivation for writing a business plan is to secure funding. M&T has the experience and expertise to help you assemble the information that’s going to be key to a successful proposal . Having a viable plan for business success can help you get the financing you need.

How much money?

Specify the amount of financing you’re seeking. You should consider your current costs as well as those you anticipate based on your business plan. Show that you’ve done your research and aren’t just guessing at a number.

How will the money be used?

Provide a clear description of how you intend to use any money you get from a lender or investor. Include an easy-to-understand justification for the funding. Don’t forget to demonstrate how the funds are going to increase your company’s profitability.

Financial plans

Include a summary of your business plan’s financial projections. Even if you haven’t yet made a sale, industry-accepted assumptions from your market research can help you develop a sales forecast, expense budget and cash-flow statement. Make it easy for lenders to see that you have a realistic plan for repaying your loan. If you’re writing a business plan for investors, show growth potential that’s going to lead to return on investment.

A strong business plan can help prepare you for funding conversations with M&T.

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Blog Business

15+ Business Plan Examples to Win Your Next Round of Funding

By Jennifer Gaskin , Jun 09, 2021

“If you fail to plan, you are planning to fail,” according to words of wisdom dubiously attributed to Benjamin Franklin. While there’s no solid evidence that Franklin actually coined this phrase, the sentiment rings true for any business.

Not having a solid plan makes it unlikely you’ll achieve the goals you seek, whether the goals are getting your to-do list done or launching a successful organization.

In the early stages of a company, that means developing things like pitch decks, business plans, one-sheeters and more. With Venngage’s Business Plan Builder , you can easily organize your business plan into a visually appealing format that can help you win over investors, lenders or partners.

Learn more about  how to create a business plan  so you can hit the ground running after reading through this list for inspirational examples of business plans.

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Simple business plan example, startup business plan example, small business plan example, nonprofit business plan example, strategic business plan example, market analysis business plan example, sales business plan example, organization and management business plan example, marketing and sales strategy business plan example, apple business plan example, airbnb business plan example, sequoia capital business plan example.

While your business plan should be supported by thorough and exhaustive research into your market and competitors, the resulting document does not have to be overwhelming for the reader. In fact, if you can boil your business plan down to a few key pages, all the better.

CREATE THIS PLAN TEMPLATE

The simple, bold visual aesthetic of this  business plan template  pairs well with the straightforward approach to the content and various elements of the business plan itself.

Use Venngage’s My Brand Kit  to automatically add your brand colors and fonts to your business plan with just a few clicks.

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An essential startup business plan should include a clear and compelling value proposition, market analysis, competitive analysis, target audience identification, financial projections, and a well-defined marketing and operational strategy.

For a typical startup, the need to appear disruptive in the industry is important. After all, if you’re not offering anything truly new, why would an investor turn their attention toward your organization. That means establishing a problem and the ways in which you solve it right away.

CREATE THIS PRESENTATION TEMPLATE

Whether it’s a full-scale business plan or, in this case, a pitch deck, the ideal way for a startup to make a splash with its plans is to be bold. This successful business plan example is memorable and aspirational.

In the Venngage editor, you can upload images of your business. Add these images to your plans and reports to make them uniquely your own.

All businesses start out small at first, but that doesn’t mean their communications have to be small. One of the best ways to get investors, lenders and talent on board is to show that you’ve done your due diligence.

In this small business plan example, the content is spread over many pages, which is useful in making lengthy, in-depth research feel less like a chore than packing everyone on as few pages as possible.

Organizations that set out to solve problems rather than earning profits also benefit from creating compelling business plans that stir an emotional response in potential donors, benefactors, potential staff members or even media.

CREATE THIS REPORT TEMPLATE

Simplicity is the goal for nonprofits when it comes to business plans, particularly in their early days. Explain the crisis at hand and exactly how your organization will make a difference, which will help donors visualize how their money will be used to help.

Business plans are also helpful for companies that have been around for a while. Whether they’re considering new products to launch or looking for new opportunities, companies can approach business plans from the strategy side of the equation as well.

Strategic business plans or strategy infographics should be highly focused on a single area or problem to be solved rather than taking a holistic approach to the entire business. Expanding scope too much can make a strategy seem too difficult to implement.

Easily share your business plan with Venngage’s multiple download options, including PNG, PNG HD, and as an interactive PDF.

One-page business plan example

For organizations with a simple business model, often a one-page business plan is all that’s needed. This is possible in any industry, but the most common are traditional ones like retail, where few complex concepts need to be explained.

This one-page strategic business plan example could be easily replicated for an organization that offers goods or services across multiple channels or one with three core business areas. It’s a good business plan example for companies whose plans can be easily boiled down to a few bullet points per area.

Especially when entering a saturated market, understanding the landscape and players is crucial to understanding how your organization can fit it—and stand out. That’s why centering your business plan around a market analysis is often a good idea.

In this example, the majority of the content and about half the pages are focused on the market analysis, including competitors, trends, pricing, demographics and more. This successful business plan example ensures the artwork and style used perfectly matches the company’s aesthetic, which further reinforces its position in the market.

You can find more memorable business plan templates to customize in the Venngage editor. Browse Venngage’s  business plan templates  to find plans that work for you and start editing.

Company description business plan example

Depending on the market, focusing on your company story and what makes you different can drive your narrative home with potential investors. By focusing your business plan on a company description, you center yourself and your organization in the minds of your audience.

This abbreviated plan is a good business plan example. It uses most of the content to tell the organization’s story. In addition to background about the company, potential investors or clients can see how this design firm’s process is different from their rivals.

With Venngage Business , you can collaborate with team members in real-time to create a business plan that will be effective when presenting to investors.

Five-year business plan example

For most startups or young companies, showing potential investors or partners exactly how and when the company will become profitable is a key aspect of presenting a business plan. Whether it’s woven into a larger presentation or stands alone, you should be sure to include your five-year business plan so investors know you’re looking far beyond the present.

CREATE THIS PROPOSAL TEMPLATE

With Venngage’s Business Plan Builder , you can customize a schedule like this to quickly illustrate for investors or partners what your revenue targets are for the first three to five years your company is in operation.

The lifeblood of any company is the sales team. These are the energetic folks who bring in new business, develop leads and turn prospects into customers. Focusing your energy on creating a sales business plan would prove to investors that you understand what will make your company money.

In this example sales business plan, several facets of ideal buyers are detailed. These include a perfect customer profile that helps to convey to your audience that customer relationships will be at the heart of your operation.

You can include business infographics in your plan to visualize your goals. And with Venngage’s gallery of images and icons, you can customize the template to better reflect your business ethos.

Company mergers and shakeups are also major reasons for organizations to require strong business planning. Creating new departments, deciding which staff to retain and charting a course forward can be even more complex than starting a business from scratch.

This organization and management business plan focuses on how the company can optimize operations through a few key organizational projects.

Executive summary for business plan example

Executive summaries give your business plan a strong human touch, and they set the tone for what’s to follow. That could mean having your executive leadership team write a personal note or singling out some huge achievements of which you’re particularly proud in a business plan infographic .

In this executive summary for a business plan, a brief note is accompanied by a few notable achievements that signal the organization and leadership team’s authority in the industry.

Marketing and sales are two sides of the same coin, and clever companies know how they play off each other. That’s why centering your business plan around your marketing and sales strategy can pay dividends when it comes time to find investors and potential partners.

This marketing and sales business plan example is the picture of a sleek, modern aesthetic, which is appropriate across many industries and will speak volumes to numbers-obsesses sales and marketing leaders.

Do business plans really help? Well, here’s some math for you; in 1981, Apple had just gone public and was in the midst of marketing an absolute flop , the Apple III computer.  The company’s market cap, or total estimated market value,  could hit $3 trillion this year.

Did this Apple business plan make the difference? No, it’s not possible to attribute the success of Apple entirely to this business plan from July 1981, but this ancient artifact goes to show that even the most groundbreaking companies need to take an honest stock of their situation.

Apple’s 1981 business plan example pdf covers everything from the market landscape for computing to the products that founder Steve Jobs expects to roll out over the next few years, and the advanced analysis contained in the document shows how strategic Jobs and other Apple executives were in those early days.

Inviting strangers to stay in your house for the weekend seemed like a crazy concept before Airbnb became one of the world’s biggest companies. Like all disruptive startups, Airbnb had to create a robust, active system from nothing.

As this Airbnb business plan pitch deck example shows, for companies that are introducing entirely new concepts, it’s helpful not to get too into the weeds. Explain the problem simply and boil down the essence of your solution into a few words; in this case, “A web platform where users can rent out their space” perfectly sums up this popular company.

Sequoia Capital is one of the most successful venture capital firms in the world, backing startups that now have a combined stock market value of more than $1 trillion, according to a Forbes analysis .

For young companies and startups that want to play in the big leagues, tailoring your pitch to something that would appeal to a company like Sequoia Capital is a good idea. That’s why the company has a standard business plan format it recommends .

Using Sequoia Capital’s business plan example means being simple and clear with your content, like the above deck. Note how no slide contains much copy, and even when all slides appear on the screen at once, the text is legible.

In summary: Use Venngage to design business plans that will impress investors

Not every business plan, pitch deck or one-sheeter will net you billions in investment dollars, but every entrepreneur should be adept at crafting impressive, authoritative and informative business plans.

Whether you use one of the inspirational templates shared here or you want to go old school and mimic Apple’s 1981 business plan, using Venngage’s Business Plan Builder helps you bring your company’s vision to life.

Business Plan Section 8: Funding Request

These guidelines will help you prepare a funding request to present to a potential lender alongside your loan application.

We’ve talked before about the benefits of having a business plan for every business, but the truth is, most companies don’t put one together until they want to apply for funding, whether from a bank or investor. Sometimes, even if you don’t need a full business plan when applying for a loan, you will be asked for a funding request. You can also follow the guidelines below to prepare a stand-alone proposal to present to a potential lender with your application.

If the purpose of your business plan is NOT to get funding, feel free to skip this section.

As we’ve said before about writing a business plan, it’s important to keep your audience in mind. You can certainly prepare different versions of your funding request depending on whether you’re applying for a loan or approaching an investor. The terms of each would be different, and you might be looking for different amounts of money or types of funding, especially if you’re approaching several potential partners.

Be clear about whom you’re directing the request to, and think about the questions they might have and what they would want to see. Make sure you’ve done your homework regarding the costs involved with your plans. This is where the financial section of your plan will work hand in hand with this one. Be consistent with your numbers, and ask for enough to cover your needs fully so you don’t fall short and remain unable to complete your goals. At the same time, don’t ask for more than you need.

What to Include in Your Funding Request

1. a summary of the business.

If the request is part of your business plan, you will have already put together all the information found in a business summary. If you’re creating a funding request as a stand-alone document, explain what the company is, where you’re located, what you sell or what services you offer, and who your customers are. Mention whether you’re incorporated, and if so, what type of corporation it is, along with who the owners and key staff members are. Briefly list your business successes and accomplishment thus far.

2. How much money you’re requesting

How much cash are you looking for now, and if you anticipate this being the first part of an ongoing growth plan, how much more money do you plan to request over time? What would the specific timeline look like? The Small Business Administration suggests thinking as far as five years down the road when putting your funding request together. Also spell out what type of funding you’re looking for, whether a loan or investment, and the terms you’re asking for. (As we suggested above, you can put together different versions of the request for different types of funding.)

3. What you will use the money for

Do you need some extra funds for working capital to buy more inventory? Are you paying off a high-interest loan? Buying a building, new equipment, or another company? Expanding your advertising campaign, or hiring more staff? Whatever it is, explain how much each aspect will cost.

4. Financial information

This will be the heart of the financial information section of your business plan , but you need to include it here if you’re putting together a stand-alone funding request.

You’ll need historical data on the company (if it’s an established business), like income statements, balance sheets, and cash flow statements for the last three to five years. If the funding request is for a loan that requires collateral, document what you have to offer. If you’ve invested your own money in the company or there are other investors, state that along with how much.

Offer realistic projections for the future, and explain how this new funding would help you reach those goals. Prepare yearly forecasts for income, balance sheets, cash flow and capital expenditure budgets for the next five years. Be even more specific for the first year, with projections for each month or quarter.

You also need to cover how you plan to pay off the debt, or what kind of return on investment you can offer a potential investor. Potential funders will pay particular attention to this, wanting to maximize their gains and minimize their risk as much as possible. If the plan is targeted to investors, what would their exit plan be? Can they cash out in a specific number of years? Do you plan to go public and offer stock?

Finally, address anything that might affect your ability to repay, whether positively or negatively, such as being acquired, buying out another business, relocating, etc.

Getting money to fund your business may very well be the point of creating your entire business plan, so take the time to carefully prepare your funding request, making sure to include all the information a decision-maker will need.

NEXT ARTICLE > BUSINESS PLAN SECTION 9: APPENDIX

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How to Write a Business Plan: Funding Request

There are several reasons to write a business plan.  A common reason is to help small business owners gain a better perspective of their business.  However, small business owners often seek out a business plan for the sole purpose of obtaining funds from a bank or investor.  If this is your purpose, then you definitely need a business plan funding request in your document.  Further, to optimize your chances of obtaining funding, some specific steps and strategies should be followed for writing your funding requests.

Need Help Writing a Funding Request for a Business Plan?

Call or Text Paul, Doctoral Candidate, MBA.

321-948-9588

Email: [email protected]

Our business plan writer is located in Orlando, Fl.

Need help with your funding request section of a business plan?  Quality Business Plan offers two popular services for funding request section help, which are business plan templates or professionally prepared business plans.

Business Plan Template

If you prefer to do your funding request on your own, at the very least, use a customizable business plan template. Check out our business plan templates by clicking on the link below.

Professionally Written Business Plan

If you want your funding request done by a professional, then our business plan writing service is for you! Check out our business plan prices by clicking on the link below.

Make your funding request is the last section of your business plan .

Your business plan will include a plethora of information about your business, such as the target market, company information, financials, and products or services sold.  Before requesting funding, make sure to educate the potential investor about your company in its totality.  Because of this need, the funding section should be the last piece of information the reader reviews.  This will help the investor or lender come to an educated decision based on all the information available about our company or proposed company.

Why the funding is needed.

The first portion of your funding request should be focused on explaining why the funds are needed.  For some companies, funds are only required for working capital, which is monies used to fund operations.  For other firms, funding is necessary to start operations.  Regardless of the reason why you need the funds, make sure to explain, in detail, why funds are needed.

The total amount of funding needed.

The second piece of information that should be included in your business funding request is the total amount of funds needed.  This should immediately follow why funding is necessary section.  For this part, make sure to state the required funds in one lump sum.  This prepares an investor or reader for the total dollar amount needed.

Usage of funds.

In this section, make sure to break down where the funds will be spent and when the funds will be needed.  For example, if funds are required for working capital, then make sure to say that funds will not be needed until the business opens its doors and then break down in various components how the funds will be spent, if possible.

Parameters of funding.

After the breakdown of how funds will be used, discuss parameters for accepting funding.  These parameters may include an equity stake in the company or specific loan guidelines.  An example of this would be: “Our firm will offer a 25% equity stake for interested investors”. Once this is stated, make sure to explain how funds will be repaid.

How funds will be repaid.

In this portion, investors will want to know how they are going to get paid for their investment.  A popular method of repayment is through dividend payments.  The structure may vary depending on the situation.  From this, in my personal experience, it's a good idea to include some type of statement that the terms may be negotiable.  This allows the investors to make counteroffers about your set parameters.

Possible future funding needs.

Once an investor takes an equity position in the company, they are not fond of surprises.  A most unwelcoming surprise for an investor is for them to find out after they invest, that additional debt may be needed, or further equity investments are required.  Avoid this unpleasant conversation upfront.  Make sure to provide an outline as to possible situations where additional funding may be necessitated.  In doing this, investors are prepared for either a dilution of their equity stake or understanding that additional funds may be required in certain circumstances.

Summarize funding request and include in the executive summary.

The final step to fully utilizing your funding request is to summarize the section into three or four sentences and insert them in your executive summary.  By doing this, investors will know right from the beginning how much funds are being requested and possible terms offered by the company.

Example of a funding request.

Starting a retail bicycle store requires significant upfront funds and working capital to ensure brand building and adequate market penetration.  From this, our firm is requesting $50,000.  Funding will be used as follows:

• Construction Costs
• Storefront design
• Computers and software
• 30 Men bikes
• 25 Women bikes
• 30 Kid bikes
• Safety gear
• Accessories
• Working Capital 25,000

"Bikes and Accessories" will offer potential investors a 15% equity stake in our firm.  Funds will be repaid monthly through dividends based on net profits.  In the event, our firm identifies future opportunities in the marketplace; additional funding may be sought via equity or debt financing.

By: Paul Borosky, MBA., Doctoral Candidate.

Owner of Quality Business Plan.

Updated: 3/4/2022

Free Financial Templates for a Business Plan

By Andy Marker | July 29, 2020

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In this article, we’ve rounded up expert-tested financial templates for your business plan, all of which are free to download in Excel, Google Sheets, and PDF formats.

Included on this page, you’ll find the essential financial statement templates, including income statement templates , cash flow statement templates , and balance sheet templates . Plus, we cover the key elements of the financial section of a business plan .

Financial Plan Templates

Download and prepare these financial plan templates to include in your business plan. Use historical data and future projections to produce an overview of the financial health of your organization to support your business plan and gain buy-in from stakeholders

Business Financial Plan Template

Use this financial plan template to organize and prepare the financial section of your business plan. This customizable template has room to provide a financial overview, any important assumptions, key financial indicators and ratios, a break-even analysis, and pro forma financial statements to share key financial data with potential investors.

Download Financial Plan Template

Word | PDF | Smartsheet

Financial Plan Projections Template for Startups

This financial plan projections template comes as a set of pro forma templates designed to help startups. The template set includes a 12-month profit and loss statement, a balance sheet, and a cash flow statement for you to detail the current and projected financial position of a business.

‌ Download Startup Financial Projections Template

Excel | Smartsheet

Income Statement Templates for Business Plan

Also called profit and loss statements , these income statement templates will empower you to make critical business decisions by providing insight into your company, as well as illustrating the projected profitability associated with business activities. The numbers prepared in your income statement directly influence the cash flow and balance sheet forecasts.

Pro Forma Income Statement/Profit and Loss Sample

Use this pro forma income statement template to project income and expenses over a three-year time period. Pro forma income statements consider historical or market analysis data to calculate the estimated sales, cost of sales, profits, and more.

‌ Download Pro Forma Income Statement Sample - Excel

Small Business Profit and Loss Statement

Small businesses can use this simple profit and loss statement template to project income and expenses for a specific time period. Enter expected income, cost of goods sold, and business expenses, and the built-in formulas will automatically calculate the net income.

‌ Download Small Business Profit and Loss Template - Excel

3-Year Income Statement Template

Use this income statement template to calculate and assess the profit and loss generated by your business over three years. This template provides room to enter revenue and expenses associated with operating your business and allows you to track performance over time.

Download 3-Year Income Statement Template

For additional resources, including how to use profit and loss statements, visit “ Download Free Profit and Loss Templates .”

Cash Flow Statement Templates for Business Plan

Use these free cash flow statement templates to convey how efficiently your company manages the inflow and outflow of money. Use a cash flow statement to analyze the availability of liquid assets and your company’s ability to grow and sustain itself long term.

Simple Cash Flow Template

Use this basic cash flow template to compare your business cash flows against different time periods. Enter the beginning balance of cash on hand, and then detail itemized cash receipts, payments, costs of goods sold, and expenses. Once you enter those values, the built-in formulas will calculate total cash payments, net cash change, and the month ending cash position.

Download Simple Cash Flow Template

12-Month Cash Flow Forecast Template

Use this cash flow forecast template, also called a pro forma cash flow template, to track and compare expected and actual cash flow outcomes on a monthly and yearly basis. Enter the cash on hand at the beginning of each month, and then add the cash receipts (from customers, issuance of stock, and other operations). Finally, add the cash paid out (purchases made, wage expenses, and other cash outflow). Once you enter those values, the built-in formulas will calculate your cash position for each month with.

‌ Download 12-Month Cash Flow Forecast

3-Year Cash Flow Statement Template Set

Use this cash flow statement template set to analyze the amount of cash your company has compared to its expenses and liabilities. This template set contains a tab to create a monthly cash flow statement, a yearly cash flow statement, and a three-year cash flow statement to track cash flow for the operating, investing, and financing activities of your business.

Download 3-Year Cash Flow Statement Template

For additional information on managing your cash flow, including how to create a cash flow forecast, visit “ Free Cash Flow Statement Templates .”

Balance Sheet Templates for a Business Plan

Use these free balance sheet templates to convey the financial position of your business during a specific time period to potential investors and stakeholders.

Small Business Pro Forma Balance Sheet

Small businesses can use this pro forma balance sheet template to project account balances for assets, liabilities, and equity for a designated period. Established businesses can use this template (and its built-in formulas) to calculate key financial ratios, including working capital.

Download Pro Forma Balance Sheet Template

Monthly and Quarterly Balance Sheet Template

Use this balance sheet template to evaluate your company’s financial health on a monthly, quarterly, and annual basis. You can also use this template to project your financial position for a specified time in the future. Once you complete the balance sheet, you can compare and analyze your assets, liabilities, and equity on a quarter-over-quarter or year-over-year basis.

Download Monthly/Quarterly Balance Sheet Template - Excel

Yearly Balance Sheet Template

Use this balance sheet template to compare your company’s short and long-term assets, liabilities, and equity year-over-year. This template also provides calculations for common financial ratios with built-in formulas, so you can use it to evaluate account balances annually.

Download Yearly Balance Sheet Template - Excel

For more downloadable resources for a wide range of organizations, visit “ Free Balance Sheet Templates .”

Sales Forecast Templates for Business Plan

Sales projections are a fundamental part of a business plan, and should support all other components of your plan, including your market analysis, product offerings, and marketing plan . Use these sales forecast templates to estimate future sales, and ensure the numbers align with the sales numbers provided in your income statement.

Basic Sales Forecast Sample Template

Use this basic forecast template to project the sales of a specific product. Gather historical and industry sales data to generate monthly and yearly estimates of the number of units sold and the price per unit. Then, the pre-built formulas will calculate percentages automatically. You’ll also find details about which months provide the highest sales percentage, and the percentage change in sales month-over-month. 

Download Basic Sales Forecast Sample Template

12-Month Sales Forecast Template for Multiple Products

Use this sales forecast template to project the future sales of a business across multiple products or services over the course of a year. Enter your estimated monthly sales, and the built-in formulas will calculate annual totals. There is also space to record and track year-over-year sales, so you can pinpoint sales trends.

Download 12-Month Sales Forecasting Template for Multiple Products

3-Year Sales Forecast Template for Multiple Products

Use this sales forecast template to estimate the monthly and yearly sales for multiple products over a three-year period. Enter the monthly units sold, unit costs, and unit price. Once you enter those values, built-in formulas will automatically calculate revenue, margin per unit, and gross profit. This template also provides bar charts and line graphs to visually display sales and gross profit year over year.

Download 3-Year Sales Forecast Template - Excel

For a wider selection of resources to project your sales, visit “ Free Sales Forecasting Templates .”

Break-Even Analysis Template for Business Plan

A break-even analysis will help you ascertain the point at which a business, product, or service will become profitable. This analysis uses a calculation to pinpoint the number of service or unit sales you need to make to cover costs and make a profit.

Break-Even Analysis Template

Use this break-even analysis template to calculate the number of sales needed to become profitable. Enter the product's selling price at the top of the template, and then add the fixed and variable costs. Once you enter those values, the built-in formulas will calculate the total variable cost, the contribution margin, and break-even units and sales values.

Download Break-Even Analysis Template

For additional resources, visit, “ Free Financial Planning Templates .”

Business Budget Templates for Business Plan

These business budget templates will help you track costs (e.g., fixed and variable) and expenses (e.g., one-time and recurring) associated with starting and running a business. Having a detailed budget enables you to make sound strategic decisions, and should align with the expense values listed on your income statement.

Startup Budget Template

Use this startup budget template to track estimated and actual costs and expenses for various business categories, including administrative, marketing, labor, and other office costs. There is also room to provide funding estimates from investors, banks, and other sources to get a detailed view of the resources you need to start and operate your business.

Download Startup Budget Template

Small Business Budget Template

This business budget template is ideal for small businesses that want to record estimated revenue and expenditures on a monthly and yearly basis. This customizable template comes with a tab to list income, expenses, and a cash flow recording to track cash transactions and balances.

Download Small Business Budget Template

Professional Business Budget Template

Established organizations will appreciate this customizable business budget template, which  contains a separate tab to track projected business expenses, actual business expenses, variances, and an expense analysis. Once you enter projected and actual expenses, the built-in formulas will automatically calculate expense variances and populate the included visual charts. 

‌ Download Professional Business Budget Template

For additional resources to plan and track your business costs and expenses, visit “ Free Business Budget Templates for Any Company .”

Other Financial Templates for Business Plan

In this section, you’ll find additional financial templates that you may want to include as part of your larger business plan.

Startup Funding Requirements Template

This simple startup funding requirements template is useful for startups and small businesses that require funding to get business off the ground. The numbers generated in this template should align with those in your financial projections, and should detail the allocation of acquired capital to various startup expenses.

Download Startup Funding Requirements Template - Excel

Personnel Plan Template

Use this customizable personnel plan template to map out the current and future staff needed to get — and keep — the business running. This information belongs in the personnel section of a business plan, and details the job title, amount of pay, and hiring timeline for each position. This template calculates the monthly and yearly expenses associated with each role using built-in formulas. Additionally, you can add an organizational chart to provide a visual overview of the company’s structure. 

Download Personnel Plan Template - Excel

Elements of the Financial Section of a Business Plan

Whether your organization is a startup, a small business, or an enterprise, the financial plan is the cornerstone of any business plan. The financial section should demonstrate the feasibility and profitability of your idea and should support all other aspects of the business plan. 

Below, you’ll find a quick overview of the components of a solid financial plan.

• Financial Overview: This section provides a brief summary of the financial section, and includes key takeaways of the financial statements. If you prefer, you can also add a brief description of each statement in the respective statement’s section.
• Key Assumptions: This component details the basis for your financial projections, including tax and interest rates, economic climate, and other critical, underlying factors.
• Break-Even Analysis: This calculation helps establish the selling price of a product or service, and determines when a product or service should become profitable.
• Pro Forma Income Statement: Also known as a profit and loss statement, this section details the sales, cost of sales, profitability, and other vital financial information to stakeholders.
• Pro Forma Cash Flow Statement: This area outlines the projected cash inflows and outflows the business expects to generate from operating, financing, and investing activities during a specific timeframe.
• Pro Forma Balance Sheet: This document conveys how your business plans to manage assets, including receivables and inventory.
• Key Financial Indicators and Ratios: In this section, highlight key financial indicators and ratios extracted from financial statements that bankers, analysts, and investors can use to evaluate the financial health and position of your business.

Need help putting together the rest of your business plan? Check out our free simple business plan templates to get started. You can learn how to write a successful simple business plan  here . 

Visit this  free non-profit business plan template roundup  or download a  fill-in-the-blank business plan template  to make things easy. If you are looking for a business plan template by file type, visit our pages dedicated specifically to  Microsoft Excel ,  Microsoft Word , and  Adobe PDF  business plan templates. Read our articles offering  startup business plan templates  or  free 30-60-90-day business plan templates  to find more tailored options.

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Capitalization | Sources and Uses of Funds

What is a sources and uses of funds section in a business plan, a sources and uses of fund section is a summary of how much money will be required for startup expenses and operating capital, and where you expect that money to come from..

The sources and uses of funds section of a business plan is an important financial component that outlines where the funds for the business will come from and how they will be used. This section typically includes information on the business’s funding requirements, the sources of funding that have been secured or are being sought, and a detailed breakdown of how the funds will be used to support the business’s operations and growth. It is important for a business to have a clear understanding of its funding needs and how the funds will be used in order to attract investors and secure financing.

The level of detail in the sources and uses of funds section of a business plan can depend on the intended audience and purpose of the plan. For example, if the plan is being used to attract investors or secure financing, it may need to be more detailed and include specific numbers and projections.

In this case, the section should include spreadsheets or tables that clearly show the funding requirements, sources of funding, and detailed breakdown of how the funds will be used.

If the plan is being used as an internal tool for current investors or the board, it may be more high-level and not include as much detail. It should still however, provide a clear overview of the funding needs, sources and usage of funds.

As a best practice, it’s always a good idea to include financial projections in the form of spreadsheets or tables, this way the audience can see the financial viability of the business, in a clear and easy-to-understand format.

Why the Sources of Uses of Funds Section is Vitally Important

Many entrepreneurs and business owners rely far too much on intuition and positive expectations. “I’m not an accountant” is not a good enough reason to forego having an understanding of the basics of cash flow. Of all the traditional financial statements including the balance sheet and income statement, a reliable cash flow statement is most important. The sources and uses of funds section of your business plan is in effect a high-level cash flow statement for investors. The primary purpose of fund statements is to demonstrate that the business will have sufficient capital to start, grow and thrive.

Your company’s financial health is critical to investors and the use of funds document is a simple financial statement they’ll expect to see.

If Charles Lindberg or Emelia Earhart came to a group of equity investors or providers of debt financing, they probably would have known very little about transatlantic flying, particularly since it had never been done. But the business minds would have quickly converged on the sources and uses of funds statement. The investors would want to know that the funds statement accounted for sufficient capital to build the plane and fly it across the ocean. After all, who would want to provide funding to get a plane halfway across the ocean?

Now, this a light-hearted way to talk about a funds statement, but it makes the point: Your sources and uses of funds statements will ensure that you have thought through the business requirements and are raising sufficient capital to get your business to the next investable milestone or profitability.

Creating Your Statement of Sources and Uses of Funds

The various sections of your business plan spell out how you will go about finding new customers, creating products and services they need, and building your business. The details regarding the costs and revenues from your “word plan” make it to the “numbers plan” in the financial section. So, what’s left?

This section on Capitalization and Use of Funds summarizes how much money will be required for startup expenses and operating capital, and where you expect that money to come from. Show your financial needs for a minimum of one year into the future, or until your business will become cash-flow positive, whichever is longer.

Business Plan Outline for Capitalization and Use of Funds Should Include:

Use of Funds

Startup Costs

Working Capital

Sources of funds.

Owner’s investment

Debt or senior debt (from lenders)

Equity (from investors)

Important Considerations

This section of your business plan is intended to provide an overview of the funds your business will require. The specific details regarding terms for investing in your company must be in a separate document, which will be governed by specific legal guidelines. By law, securities can be offered for sale or solicited only by a private placement memorandum, which is a formal legal document.

Start with the Use of Funds Section

The Use of Funds section of your business plan must include all of the costs required as well as the capital to sustain your business until it becomes cash-flow positive. The initial costs are those costs required to open the business. Working capital is the money it takes to pay your bills (including labor) until your business is generating sufficient cash to fund itself. Your financial projections (Section 9) will have taken you through the hard work required to arrive at these numbers.

A simple table or spreadsheet should be used to show your use of funds or costs. Summarize costs into major categories. Customize the example below for your business. Most importantly, include all expenses that are listed on your financial statements.

For the working capital number, look at your cash flow statement. If you had no funding whatsoever, how much money would your business consume before it starts to turn a profit or become cash-flow positive? That’s how much working capital your business will need, plus a contingency fund.

The example below is meant to be easily understood and is modeled around a startup business. It also includes rolled up numbers at a high level. It is okay to present your numbers in this manner, so long as you have the detailed version –that totals to the same amounts- if asked.

Sample Start-up Costs

Office Build-Out     $12,000

Prepaid Rent     $ 4,000

Office Equipment     $ 6,000

Grand Opening     $ 3,000

90-Day Ad Campaign  $ 5,000

Website Design   $  2,000

Administrative Costs

Insurance     $2,000

Fees & Permits    $ 1000

Miscellaneous Startup Costs, $15,000

Total Startup Costs     $50,000

Annual Salaries for 3 employees $300,000

Contingency capital funds $50,000

Total W/C      $350,000

Total Use of Funds      $400,000

Let’s start with the obvious. The sources of funds needs to meet or exceed the use of funds from the section above.

Now that you have laid out the financial needs of the business, where will that money come from? Ideally, at least some of that will be coming directly from you. Perhaps you’ll even include a “family and friends” round of investment. The balance will be the amount you need to bring in either as loans or outside investments. Customize the example below to your business.

Sources of Funds Table

Owner’s Cash Investment $50,000

Family and Friends Investment (Equity) $20,000

Loan Sought $330,000

While you don’t have to include it in your business plan, you should be prepared to talk about your collateral, or how you will guarantee that the lender will be repaid. Most financial institutions require a primary and secondary source of collateral. This topic is covered in the section titled, Exit Strategy or Payback Analysis.

Many people think about the balance sheet and income statement as the most important financial statements. It’s the cash flow statement that tells most about the company’s financial health and ability to continue. The “sources and uses of funds” section of your business plan is a means of looking ahead at the cash flows of the business – both incoming and outgoing – to determine how much cash you’ll need to raise.

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How to Create a Startup Funding Proposal: 8 Samples and Templates to Guide You

Being a founder is difficult. Managing the day-to-day as a founder while trying to secure capital for your business can almost feel impossible. Thankfully, there are different tools and techniques that founders can use to systemize their fundraise to focus on what truly matters, building their business.

One of those tools is a startup funding proposal. In this guide, we’ll break down what a startup funding proposal is and how you can leverage it to build momentum in your fundraise.

What Is a Startup Funding Proposal?

A startup funding proposal is a document that helps startup founders share an overview of their business and make the case for why they should receive funding. A startup funding proposal can be boiled down to help founders layout 3 things:

• What — what does your startup do
• How — how does your startup or product help customers accomplish what they are seeking
• Why — why does your startup need funding and why should an investor fund your business

Related Resource: How to Write a Business Plan For Your Startup

Types of Startup Funding Proposals

Like any business document, there are many ways to approach a startup funding proposal. Ultimately it will come down to pulling the pieces and tactics that work best for your business. Investors are seeing hundreds, if not thousands, of deals a month so it is important to have your assets buttoned up to move quickly and build conviction during a raise. Check out a couple of popular types of funding proposals below:

Traditional Startup Funding Proposal

The most traditional or “standard” standard funding proposal is generally a written and visual document that is created using word processing software and/or design tools.

A traditional proposal is great because it allows you to share context with every aspect of your business. For example, if you include a chart of growth you’ll be able to explicitly write out why that was and what your plan is for future growth.

This document is generally designed to fit your brand and will hit on the key components of your business is structured and predictable way. We hit on what to include in your proposal below.

Startup Funding Proposal Pitch or Presentation

The most common approach we see to a fundraise or proposal is the pitch deck. Pitch decks take the same components as any proposal and fit them into a visual pitch deck that can be easily navigated and understood by a potential investor.

Pitch decks are not required by investors by are generally expected and are a great tool that can help you efficiently close your round. To learn more about building your pitch deck, check out a few of our key resources below:

• Tips for Creating an Investor Pitch Deck
• 18 Pitch Deck Examples for Any Startup
• Our Teaser Pitch Deck Template

1-on-1 Proposals (Elevator Pitch)

A 1 on 1 proposal or an elevator pitch is the quickest version of any proposal. Every founder should have an elevator pitch in their back pocket and is a complementary tool to any of the other funding proposals mentioned here.

As the team at VestBee puts it, “Elevator pitch” or “elevator speech” is a laconic but compelling introduction that can be communicated in the amount of time it takes someone to ride an elevator, usually around 30 seconds. It can serve you for fundraising purposes, personal introduction, or landing a prospective client.”

Email Proposal

Another common way to share a startup funding proposal via email. While the content might be similar to what is seen in a “traditional” funding proposal this allows you to hit investors where they spend their time – their inbox.

The format will follow a traditional proposal with less emphasis on visual aspects and more emphasis on the written content. Check out an example from our Update Template Library below:

Related Resource: How to Write the Perfect Investment Memo

Investor Relationship Hub

Lastly, there is an investor relationship hub or data room that can be used to share your proposal with potential investors. A hub is a great place to curate multiple documents or assets that will be needed during your fundraise. For example, you could share your funding proposal and your financials if they are requested by a potential investor.

Related Resource: What Should be in an Investor Data Room?

What to Include in Your Startup Funding Proposal

How you share your funding proposal might differ but ultimately the components are generally closely related from one proposal to the next. However, be sure that you are building this for your business. There is no prescriptive template that will work for every business.

Project Summary

First things first, you’ll want to start with a summary of your project or your business. This can be a high-level overview of what your proposal encompasses and will give an investor the context they need for the rest of the proposal. A couple of ideas that are worth hitting on:

• What your company does and how it’s different from existing solutions to pressing problems.
• Existing market gaps and how your product covers them.
• The importance of your product in your industry and how it improves the industry.
• Existing resources and manpower, investment requirements, and potential limitations.

Current Performance and Financial Report

Of course, investors want to see how your business has been performing. The data and metrics around your business are generally how an investor builds conviction and further interest in your business. We suggest using your best judgment when it comes to the level of metrics or financials that you’d like to share. A couple examples of what you might share:

• Current assets and liabilities
• MVP presentation for companies still in the ideation stage
• Appendix with financial reports

Related Resource: ​​ Building A Startup Financial Model That Works

Existing Investors and Partners

Inevitably investors will want to know who else you have raised capital from and partnered with in the past. Include a brief description of the different investors you have on your cap table and be ready to field additional questions if they have any.

Pro tip: The first place an investor will go to when performing due diligence is your current investors. Make sure you have a strong relationship and good communication with your current investors.

Market Study and Sales Goals

Investors will also care about your customer acquisition efforts and want to make sure you can repeatably find and close new customers. A couple of things that might be important to include in this section:

• Product pricing and information
• Revenue targets and goals
• Customer acquisition model and efforts
• Sales and marketing related KPIs
• Stories or testimonials from happy customers

Current Valuation, Investment Requirements, and Expected Returns

This is an opportunity to lay out your cap table and explain your current valuation, investment requirements, and what future valuations could look like. As always, we suggest using your best judgment when it comes to what level of detail you’d like to share about your cap table.

Potential Pitfalls and Solutions

There is an inherent risk when investing in any startup. It is important to make sure potential investors are aware of this. Layout the common pitfalls your startup might face and stop you from achieving your goals. Next, lay out the solutions to these problems and how you plan to tackle them if/when they arise.

8 Startup Funding Proposal Samples and Templates

Below are 8 proposal templates to help you kick off your next fundraise. Note that some of these are technically investor updates and not designed for first-time fundraising. Keep in mind that a startup funding proposal could also be utilized for additional funding after the first round of funding.

1. An Investment Summary Template by Underscore VC

Underscore VC is a seed-stage venture fund based out of Boston. As the team at Underscore writes :

“As part of this, we strongly recommend you write out a pitch narrative before you start to build a pitch deck. “Writing the prose forces you to fill in the gaps that can remain if you just put bullets on a slide,” says Lily Lyman, Underscore VC Partner. “It becomes less about how you present, and more about what you present.”

This exercise can help you synthesize your thoughts, smooth transitions, and craft a logical, compelling story. It also helps you include all necessary information and think through your answers to tough questions.

Check out the template here .

2. The Visible “Standard” Investor Update Template

Our Standard investor update template is great for communicating with existing investors. If you are regularly sending Updates to their investors they should know when you are beginning to raise capital again and can almost be treated as an investment proposal.

Check out the template for our standard investor update template here .

3. Sharing a Fundraising Pitch via Video

Videos are a great way to give the right context to the right investors in a concise and quick way. Video is a great supporting tool for any other information or documents you might be sending over. For example, you can include a few charts or metrics and some company information and use the video to further explain the data and growth plans. Check out the template here .

4. Financial Funding Proposal

The team at Revv put together a plug-and-play financial funding proposal. As they wrote, “A funding proposal must provide details of your company’s financials to obtain the right amount of funding. Check out our funding proposal template personalized for your business.” Check out the template here .

5. Investor Proposal Template for SaaS Companies

The team at Revv put together a template to help founders grab the attention of investors. As they wrote, “With so many Investing Agencies, this Investor proposal will surely leave an impact on your company in the long run.” Check out the template here .

6. Startup Funding Proposal Sample

Template.net has created a downloadable funding proposal template that can be edited using any tool. As they wrote, “Get your business idea off the ground by winning investors for your business through this Startup Investment Proposal. Fascinate investors with how you are going to get your business into the spotlight and explain in vivid detail your goals or target for the business.” Check out the template here .

7. Simple Proposal Template

Best Templates has created a generic proposal template that can be molded to fit most use cases. As they wrote, “Use this Simple Proposal Template for any of your proposal needs. This 14-page proposal template is easily editable and fully customizable using any chosen application or program that supports MS Word or Pages file formats.”

8. Sample Investment Proposal for Morgan Stanley

Another example is from the team at Morgan Stanley. The template is commonly used by their team and can be applied to most proposal use cases.

Connect With More Investors and Tell Your Story With Visible

Being able to tie everything together and build a strategy for your fundraise will be an integral part of your fundraising success. Check out how Visible can help you every step of the way below:

Visible Connect — Finding the right investors for your business can be tricky. Using Visible Connect, filter investors by different categories (like stage, check size, geography, focus, and more) to find the right investors for your business. Give it a try here .

Pitch Deck Sharing — Once you’ve built out your target list of investors, you can start sharing your pitch deck with them directly from Visible. You can customize your sharing settings (like email gated, password gated, etc.) and even add your own domain. Give it a try here .

Fundraising CRM — Our Fundraising CRM brings all of your data together. Set up tailored stages , custom fields , take notes, and track activity for different investors to help you build momentum in your raise. We’ll show how each individual investor is engaging with your Updates, Decks, and Dashboards. Give it a try here .

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A solid business plan is one of the most important documents you’ll need to create for your company. This document provides a roadmap for your company’s future developments. However, no growth can occur without a sufficient amount of working capital. That’s why your business plan should include a source of funds section – it can remind you how to maintain the cash flow your company needs.

There’s another reason this part of your business plan matters. It can show certain lenders how much money you need beyond what the funding sources in your business plan can get you. That said, not all lenders will require you to share a business plan. For example, SmartBiz’s loan approval requirements don’t include business plans among the necessary paperwork. Either way, below are some source of funds examples in business plans.

What is a business plan?

A business plan is a document that guides your company’s growth. It helps define your business goals and provides a clear overview of how you’ll achieve them. You can also use it to plot out your marketing, operational, and sales approaches. Your business plan can be the foundation of a strategy to minimize risk and maximize growth.

Another reason why solid business plans are essential is that you’ll often need to provide them as you apply for business loans. Business plans provide an in-depth look at a company’s plan for profits, so lenders can more easily judge the borrower’s likelihood of repayment. Lenders are much more likely to finance borrowers whom they believe can pay back the loan amount in a reasonable timeframe.

8 source of funds examples

Having a source of funds – sometimes several sources of funding – is vital to growing your business . Common funding options include business loans, and sometimes, to qualify for them, you must show lenders your other funding sources. Understanding the below source of funds examples in business plans can help you better structure yours.

1. Personal savings

When you’re just getting your business off the ground, sometimes, the fastest way to fund it is directly from your current savings. However, entwining your personal savings into a company that could fail is a risky prospect – but it also shows commitment. Lenders and investors often respond well to a borrower who’s ready to go the distance with their ideas.

2. Money from friends and family

Money from family and friends, which you’ll also see called “love money,” is a viable source of funds in your business plan. However, just as it’s risky to get your own money wrapped up in a business, it’s dangerous with other people’s finances too. Plus, accepting money from a loved one can come with drawbacks. For starters, not everyone in your life has much to spare in the first place. Furthermore, if you borrow money from friends or family and you can’t repay it, the relationship could be damaged.

3. Federal and private grants

Occasionally, your business model can put you in line for federal grants. That said, rare is the business that qualifies for federal grants – technically, the government does not provide grants for small businesses growth. However, private companies ranging from FedEx to the NBA offer grants to small businesses that fit certain criteria. If there’s a chance your company could fit these criteria, you can include private grants as sources of funding in your business plan.

4. Share sales and dividends

Selling shares of your company to investors – as in, anyone who buys stocks – falls under a category of funding known as equity financing. This arrangement can be lucrative, which is a main reason why you see so many companies having initial public offerings (IPOs).

However, equity financing has a few drawbacks. For one, you’ll no longer have complete control over your company's future, as stockholders dilute your ownership. Additionally, you’ll have to account for dividends in your financial planning. You pay these sums to your shareholders every quarter.

5. Venture capital

If you need a large amount of cash, venture capitalists can be a viable option. Typically, though, venture capitalists are only interested in funding startup businesses in the tech sector with high growth potential.

Venture capital is a high-reward but high-risk funding source. It often requires you ceding a certain amount of ownership – and thus control – of your business. Furthermore, if your business fails, you may still need to repay any venture capitalists or firms that have funded your operations.

6. Angel investors

An angel investor is a wealthy private individual who invests in small businesses to help them get off the ground. They tend not to offer as much starting capital as a venture capitalist, but they can make up for the smaller amount with experience. Angel investors are often experts within a specific industry and put money back into it by investing in newer businesses within that sphere.

Although you’ll have to give an angel investor some control over your company, their experience and network can help your business grow. Additionally, the word “angel” in their name reflects that they typically don’t ask for their money back if your business fails. That makes them a safer bet than venture capitalists.

7. Business incubators

Unlike the previous funding options, a business incubator doesn’t offer direct monetary support. Instead, incubators help fledgling businesses thrive by allowing them into their workspace and letting them share resources as they get started. This type of funding is indirect – you’ll rarely get direct cash infusions, but you’ll get resources that would otherwise cost you money. It’s common in high-tech industries such as biotechnology, industrial technology, and multimedia.

8. Bank loans

Bank loans probably ring a bell for you. When a current or aspiring small business owner needs additional funds, these loans are often the first thing that comes to mind. They’re among the most in-demand funding options available given their large funding amounts, long-term repayment periods, and low interest rates . However, their high amounts introduce lender risk that can make them difficult to obtain. To minimize risk, most lenders impose strict qualification criteria that you might not make.

Why do you need to provide sources of funds in your business plan?

Providing a source of funds in your business plan paves a path toward obtaining and using your funding. Knowing where your money is coming from and what you’re spending can help with strategic financial planning. It also minimizes the chances of your business partners spending money the company doesn’t actually have.

In a lending context, your sources of funds may help you qualify for any loans you need in the future. Depending on the funding sources you’re using, lenders may view you as someone able to repay the debt financing they offer. For example, using personal savings shows your commitment to your business, meaning you’re likely a reliable borrower who won’t flake on a loan. You’ll show your commitment to your company and your business at the same time.

Parting thoughts

Reliable funding sources are essential to achieving your company’s objectives, and their presence in your business plan can help you obtain more funding. Namely, certain entities that offer small business loans require business plans as part of the borrower approval process. When your approval plan clearly shows why you need the loan money and how else you’re getting funding, lenders may trust you more.

However, certain lenders don’t require business plans. In fact, when you apply for SBA 7(a) loans , bank term loans, or custom financing through SmartBiz ® , you don't need a business plan. Check now to see if you pre-qualify * – the business funding you need might be closer than you think.

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*We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.

The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.

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How to write a funding request for your startup

If you’ve got plans to start a new business, it’s more than likely that you need funds to do so. Most entrepreneurs don’t have an insanely wealthy uncle who decides to hand over some cash willy-nilly. If you’re in the minority, good for you. However, if you need outside funding, you will need a business plan , and notably, a section that requests the money you need.

Provide information on your future financial plans

Outline your business, give details on your current financial situation.

• Be clear as to what kind of money you’re requesting
• Talk about how you’ll use the money

Do your due diligence

A funding-request section is where you’ll detail what you believe your future funding requirements are going to be in a business plan. In most cases, you’ll outline a period of five years. You’ll need to provide information on your company’s financial plans for that time frame. For example, you’re expected to sketch out the different sources of capital you think you’ll require, as well as the amount of financing you’ll need as you reach various milestones.

In the article below, we’ll show you how to write a funding request correctly.

As previously mentioned, you’ll need to give details on your company’s future financial plans in your business-plan funding request. You should provide information on how much money you’ll ask for and lay out the possible sources you’re considering to secure those funds. Keep in mind that you can revisit this section of your business plan in the future should you need to ask for money to grow your business.

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You may have already given a broad overview of your company in other sections of your business plan. However, you still need to provide a brief recap in this section to benefit investors and potential lenders. There are times when they’ll ask only to see your funding section without looking at your entire business plan, so don’t leave these details out.

Business information you should include are details such as:

• The products or services you offer
• Information on the target market
• Your business structure (sole proprietorship, LLC, corporation, etc.)
• Information on key team members and partners
• An outline of any early successes you’ve achieved with your business

Just as you’ve given information on your business as a whole in other sections of the business plan, you’ve also provided detailed information on your financial situation in the plan’s section on financial data. However, you should still recap that financial situation inside your funding request.

Remember, the funding-request section is sometimes the only section at which an investor or lender might look. In that case, you’ll want to include financial information to help them understand your present money situation.

Details to include here are things such as:

• Balance sheets
• Income and cash-flow statements
• Financial projections
• Information on your assets (especially if you plan to use them as collateral)
• Any plans for paying existing debt (if you have any)
• What you believe an investor’s return on investment might be
• Your plan to repay any loans you’re given

Be clear as to what kind of money you’re requesting

You should be precise as to whether you’re seeking a loan or investment. Perhaps you’re seeking one or the other, or even both. However, whatever the case may be, you should have clear subsections for each type of funding for which you’re asking. Don’t jumble everything together and expect lenders or investors to automatically understand. Also, be sure to provide a clear picture of exactly how much money you’re asking for. Your request should cover a period of at least five years.

Talk about how you’ll use the money

Anyone who lends or invests will want to know how you will spend the money. You’ll therefore need to provide details on where the money’s going. For instance, will the money be spent on:

• Hiring a team?
• Buying equipment?
• Paying debts?
• Purchasing inventory?

Be clear and concise on these matters. If there are multiple things you need to use the money for, list out everything and how much cash will be dispensed to each. Keep in mind that getting money to pay for your business’ overhead or debts is harder than for things that will help your business to grow and expand.

Remember that when asking for funds, everything you do needs to scream “professionalism.” That means you need to know what you’re talking about. The ins and outs of your business need to be imprinted on your brain. You should be able to spit out information on request. Because the truth is that there are many would-be entrepreneurs out there with startup ideas. To compete, you have to be prepared and ready to go if a lender or investor takes an interest.

With that in mind, do your due diligence. Research what kinds of questions money people will ask of you. Then, do more research and get the answers you’ll need. Tailor your funding request to the types of financial sources you plan to approach. Investors and lenders aren’t the same, and the information they need isn’t exactly the same, either.

If you put information for both in the same funding request, be sure to separate the two and make whom you’re speaking to clear. Finally, don’t ask for too little and don’t ask for too much, but don’t be afraid to ask for what you know you need.

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Many creative ways or hobbies can be fun and brings the family closer together. Board games, education toys, and card games are a positive way to pass the time and promote socializing. Toys and games are a great way for children to make friends and create hobbies. The items listed below are just a few ways that promote your ideas for an event and planning parties. Your hobby can become your career for the rest of your life. You can stabilize a connection with friends and family through a fun activity full of laughter.

The dinosaur decorations are a fun and educational theme for a party planner, and who does not like dinosaurs? The nerf gun ammo is fun for children who love to be active out in their backyard, and it is safe for children to use. The card capacity workout will help you or anyone shuffle their cards and make it easier for you, not mixing the same cards twice. The unicorn float is great for summertime fun. Lastly, toys can also be educational and fun, like the 5 color push buttons. There are many toys and games that children can enjoy.

A career in the catering industry is typically heavily service-oriented. When catering, it’s important that your customers receive fresh, quality food and beverages in a timely manner. Because caterers are often hired by customers for scheduled special events, they usually require lots of planning and preparation. Still, accidents can happen. Garnishes may be forgotten, meats can be overcooked and side dishes sometimes burn but you can lower the risk of this happening with the help of some quality kitchen tools. If you’re a caterer and want to learn how to make the most of your next catering event, you might consider incorporating some of these useful products into how you work:

Though it would seem so, providing delicious food or beverages to customers isn’t the driving factor behind a successful catering business. To set your catering business apart from the others, it’s also important to focus on yourself and your employees. Having useful kitchen tools for preparing, cooking, and serving food is just as important as the food itself. With the help of some of the products listed, you can increase productivity among staff. From an apron that can preserve the integrity of company uniforms to a cooking sheet set that can act as a baking pan and cooling rack, these items are great for maximizing your work time.

When starting your restaurant, the name of your restaurant is an essential aspect of its brand. Branding is crucial in all businesses, but the name of your restaurant is how your local community and patrons of your business remember you the most. If you think about your favorite restaurants that come to mind, of course, their name is the first thing that will pop into your head. 

People prefer a catchy name of a restaurant business, but also one that is memorable and personalized to them. If you want to set your new restaurant up for better success, you will give it a catchy name. Therefore, let's explore some restaurant name ideas to help you pick a catchy and unique name for your new restaurant that will set you up for success.

More From Forbes

How To Start Writing A Business Plan That Works

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For the entrepreneur, knowing how to start writing a business plan can be as exhilarating as it is overwhelming. The business plan is a foundational document and the blueprint of your business and is critical for securing funding, setting clear goals, and communicating your vision to the world.

Let’s explore the significance of a business plan, the essential elements it should include, and strategies to forge a plan that resonates with stakeholders and steers your business toward success.

Whether you are about to launch your first business or need to revitalize an existing business strategy, a business plan provides the foundation that supports your entrepreneurial journey.

Why a Business Plan Is Needed

A business plan is not solely for the benefit of a bank manager or an investor . The business plan is a document that helps bring clarity to your vision and can guide every decision and strategy within your company.

A well written business plan forces you to put your goals and ideas into concrete, manageable steps. It cuts through the noise, ensuring you stay focused on what truly matters for your business’s growth.

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For startups looking to secure that critical initial investment, a business plan is often the first point of reference for potential backers. It’s a chance to sell your vision, show your financial acumen, and demonstrate a roadmap to profit.

Identifying potential pitfalls early is a vital aspect of proactive business ownership. A good business plan helps you prepare for the unexpected and develop strategies to mitigate risk and safeguard the longevity of your business.

Setting clear, measurable goals in your business plan provides a framework for tracking your progress. This will give you the insight needed to pivot or double down on strategies as the market dictates.

Creating Your Story

Before you start drafting sections and compiling data, step back and consider the story of your business. Your plan should be like a good book, with a clear narrative arc that compels the reader from the first sentence to the last.

Any good story is rooted in an understanding of the world it inhabits. Your business's narrative begins with a comprehensive analysis of the industry in which you operate, as well as the consumers you aim to serve.

Think about how you define your unique selling proposition (USP) . What sets your business apart from competitors? All good stories have a unique twist, and your business plan should articulate what makes your venture different from, and better than, the competition.

Introduce your team into the story. Highlight their expertise, experience, and any relevant achievements that lend credibility to the business’s ability to execute on its vision.

Writing Your Business Plan Is Just the Beginning

A business plan can span from a quick roadmap sketched on the back of a napkin to a hefty document carefully crafted to align with industry standards. Regardless of size, it should contain certain fundamental elements .

The act of writing a business plan, while pivotal, is just the first step in an ongoing process of refinement and execution.

Here’s how to make sure your business plan is a living document:

1. Regular reviews and updates

Markets shift, consumer behavior changes, and your business will grow. Your plan must evolve with these factors, which makes regular reviews and updates a must-do.

2. Be realistic

It’s essential to be both ambitious and realistic in your plan. Don’t over-inflate projections or underestimate costs. An unrealistic plan is as unattractive to investors as a lack of vision and ambition.

3. Seek professional input

Don’t be afraid to ask for help. Experienced business advisors, accountants, and mentors can provide invaluable feedback and spot issues you may have missed.

4. Start small

Your first draft doesn’t have to be perfect. Write down your initial thoughts, outline your ideas, and refine them over time. Starting with a large plan can be intimidating but working on it gradually can be a more manageable and effective approach.

The bottom line is that writing a business plan can feel overwhelming, but with the right approach and attention to detail, you can create a document that not only articulates your vision but actively works to make that vision a reality. It’s a living, breathing narrative that outlines your business’s course of action, and should be treated with care and enthusiasm.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business . She is the founder of She Means Profit, which is a podcast and blog . As a Finance Strategist for small business owners, Melissa helps successful business owners increase their profit margins so that they keep more money in their pocket and increase their net worth.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.

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5 Common Funding Sources For Start-Ups & Growth

Written by Dave Lavinsky

If you want to be successful in business, it is crucial to determine when, where, and how to obtain the startup funding you need. Whether you need $1,000 or $1 million to start or expand your business, if you can’t raise money, you can’t build the business you want.  

Before You Look For Funding

Before you look for funding, you need to create a solid business plan. In addition to explaining your business and your strategy for success, your plan must determine how much money you need and how it will be used.

Also, it’s very important for you to understand the timing of the funding. For example, do you need all the funding now (e.g., to build out a location), or can you receive your funding in stages or “tranches.”

The amount of funding you seek will affect the source of funding you approach. For example, if you require $250,000 in funding, angel investors are more applicable than venture capitalists. If you need $5 million, the opposite is true.

Secure Funding Quickly!

The key to securing funding for your business is having the right business plan. With Growthink’s Ultimate Business Plan Template you can complete your plan in just hours and secure funding quickly!

What is The Most Common Source of Funding for Entrepreneurs?

Personal financing is the most common funding source for entrepreneurs. This includes using both your personal savings and personal credit cards to initially fund your business. Other key funding sources, as discussed below, include business loans, friends & family, angel investors and venture capitalists.

What are the Different Ways Businesses can Find Start-up Funds?

While I have identified 41 sources of funding for your business , below are the 5 most common.

1. Funding from Personal Savings

Funding from personal savings is the most common type of funding for small businesses. The two issues with this type of funding are 1) how much personal savings you have and 2) how much personal savings are you willing to risk.

In many cases, entrepreneurs and business owners prefer OPM, or “other people’s money.” The four funding sources below are all OPM sources.

2. Business Loans

Debt financing is a fancy way of saying “ loan .”  Credit unions and banks offer funding that you must repay over time with interest. This can come in the form of a personal loan, a traditional business loan, or different loans based on the type of asset you need to purchase (e.g., for equipment, land, or vehicles).

You must prove to the lender that the likelihood of you paying back the bank loans is high, and meet any requirements they have (e.g., having collateral in some cases). With a bank loan, you do not need to give up equity. However, once again, you will have to pay interest along with the principal.

3. Friends & Family

A big source of funding for entrepreneurs is friends and family. They can provide funding in the form of debt (you must pay it back), equity (they get shares in your company), or even a hybrid (e.g., a royalty whereby they get paid back via a percentage of your sales).

Friends and family are a great source of funding since they generally trust you and are easier to convince than strangers. However, there is the risk of losing their money. And you must consider how your relationship with them might suffer if this happens.

4. Angel Investors

Angel investors are generally wealthy individuals like friends and family members; you just don’t know them (yet). At present, there are about 250,000 private angel investors in the United States that fund more than 30,000 small businesses each year.

Most of these angel investors are not members of angel groups. Rather they are business owners, executives and/or other successful individuals that have the means and ability to fund deals that are presented to them and which they find interesting.

Networking is a great way to find an angel investor for your business.

5. Venture Capital

Venture capital funding is a suitable option for businesses that are beyond the startup period, as well as those who need a larger amount of venture capital for expansion and increasing market share. Venture capitalists and VC firms are professional investors that are more involved with business management, and they play a significant role in setting milestones, targets, and giving advice on how to ensure greater success.

Venture capitalists invest in new businesses and medium-sized businesses they believe are likely to go public or be sold for massive future business profits. Specifically, they want to fund companies that have the ability to be valued at $100 million or more within five years. They also go through an expensive and lengthy process of deciding on the best business to invest their venture funds. Hence, the application process and approval usually takes several months.  

What Are the Three Major Sources of Funding for New Businesses?

The three major sources of funding for new businesses are personal funds, loans and credit, and venture capital. Personal funds involve using one’s own savings or assets to finance the startup. Loans and credit options are sought from banks, credit unions, or online lenders to obtain the necessary capital. For high-growth potential startups, venture capital firms and angel investors can provide funding in exchange for equity. Other funding options like crowdfunding, grants, or government assistance may also be explored based on the specific business and its needs.  

The Bottom Line

As you search for the best funding options for your start-up business or to expand your existing business, you will discover that some sources are more complicated and time-consuming while others may offer a very small amount. While the five sources mentioned above are the most common, there are other ways of obtaining the financing you need including government programs including grants , crowdfunding sites, business credit cards, or a line of credit from a bank just to name a few.

Choosing an inappropriate type of funding can lead to unfavorable outcomes such as feuds between the lender and business owner, shift of control, waste of resources and other negative consequences.

With this in mind, you should study the benefits and drawbacks of each financing option and select the ideal one that will help you meet your business goals. With the right sources of money, the sky’s the limit for your business.

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Project Funding Requirements

Have you noticed when you make a project , you must also remember to fund the project or it will not last. A funding requirement is important to any project. Businesses, companies, and even organizations who do projects know that you need to know the costs, the budget and of course the entire financial requirements to make the project a success. A funding requirement helps in balancing out how much is needed, from the initial cost to the final cost. For any project without any funding, the result is risky. When you plan for projects, plan for the budget requirements too.

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10+ Project Funding Requirements Examples

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What Are Project Funding Requirements?

Project funding requirements are a type of tool that may look like a list or a checklist. This tool presents itself as a means of listing down the funding requirements that are needed for a project to be completed. In addition to that, a project funding requirement ensures that any other financial requirements needed to finish the projects are all stated within the list or within the checklist. Lastly, project funding requirements are a specific list of financial requirements that are used in order for a project to be well done. The list of funding is often seen as a means of breaking down the financial needs that a project will need.

How to Make Project Funding Requirements

When you start a project, you know the parts of the requirements are the funding for the project. It is expected you will have the proper funding to make any project you have a success. In order for that to happen, you must make your very own project funding requirements spreadsheet. With that, here are steps you can follow.

Step 1: Open Your Spreadsheet and Fill Out the Required Details

The first step to making your funding requirements is to open your spreadsheet. Fill out the necessary details like the name of the project, the date, the list of materials or things needed, the action, the months and the amount of money to be used. These can vary from what type of project you plan on doing.

Step 2: Add the Number of Months for the Project

We know for a fact a project cannot be done in just a mere month or two. Practical wise, an initial planning may even be more than a month. With this, add the number of months you believe the project should be. This includes the initial planning, the designing of the project and of course the actual action of the project. Each phase will of course have funding planned for it. Add them as well.

Step 3: Make the Total of the Funding Requirements

From the amount of money being divided or placed on the required spaces, you must add them up. Add the ones that fall on the first month then follow up with the rest. Only then should you add the other subtotals to get the total amount for your funding requirement. If you think there is something missing or wrong, repeat until you get it right or until it is the same amount of money that is being required for the whole funding.

Step 4: Check on the Details before Handing Them

Lastly, before you hand the overall project funding requirement spreadsheet, check the details. Proofreading your spreadsheet for anything you may have overlooked will really make a huge difference and will also be helpful. In case you think your total is not adding up, this is also the right time to recheck if you miss any.

What is a project funding requirement?

Project funding requirements are a type of tool that may look like a list or a checklist. This tool presents itself as a means of listing down the funding requirements that are needed for a project to be completed.

Why do you need a project proposal before a project funding?

In order to get proper funding for your projects, you must go over a project proposal first. The proposal acts as a summary of what you plan for your projects, the tools and the budget that are also going to be used for the project. The proposal gives an outline of the project, the use and what is expected.

What can you expect in a project funding requirement?

The amount of money needed for the project. The tools, the manpower and the initial testing. These are all part of the project funding requirements, or the ones you will expect to see in a project funding.

You may notice that in any project you make, funding is part of the requirement. When you plan to start a project of any kind and your proposal has been approved, make sure to have the proper funding for everything to go smoothly. 

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Small Businesses Seek Funding Despite Tough Lending Market

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Small businesses continue to face challenges beyond their control. In the past year alone, they’ve weathered increasing prices, high interest rates and stricter credit standards. Despite these obstacles, many entrepreneurs are moving forward with plans to get much-needed financing.

In fact, 67% of U.S. small-business owners plan to pursue funding for their business within the next 12 months, according to a new NerdWallet survey conducted online by The Harris Poll among 335 small-business owners.

Accessing financing during an ever-changing economic climate, however, can be difficult and expensive. While a loan can help fund the purchase of new equipment, stock shelves, hire employees and otherwise help a business survive or even thrive, it can also become a burden if payments become overwhelming.

Here are three tips to help small-business owners find and get the most affordable capital right now.

1. Leverage your existing financial relationships

Nearly half (45%) of small-business owners plan to pursue a traditional term loan in the next 12 months — and 18% are specifically looking for a bank loan, according to the survey.

Bank business loans tend to offer long repayment terms and low interest rates, but can be difficult to qualify for — especially since lenders have tightened their credit standards over the past year. Getting a bank loan isn’t impossible, however.

Some banks, especially local or community institutions, may be more flexible with their qualification requirements or offer other benefits, like interest rate discounts, if you already have a relationship. Consider starting your bank loan search with the institution that administers your business bank account or one that has issued you a loan in the past.

2. Strengthen your application profile

With or without an existing financial relationship, applying for a small-business loan can be intimidating: 17% of small-business owners are concerned about being rejected for the funding they need for their business in the next 12 months, according to the survey. To improve your chances of approval, you can:

Build your credit score

A strong credit score shows lenders that you repay your debts. In general, the stronger your credit history, the better loan rates and terms you’ll receive. To build your credit score , you can look for errors on your credit reports and dispute them with the appropriate credit bureau, make debt payments more frequently and pay down or pay off existing debt.

Offer collateral

Traditional lenders, like banks and credit unions, may require you to secure your loan with collateral . Offering additional collateral (e.g., equipment, inventory, real estate) — or providing it when it isn’t required — can help bolster your loan application, as it offsets the risk a lender faces when working with your business.

Double-check your paperwork

When you complete a loan application, it’s important to verify all requirements and read each question carefully. Providing incorrect or outdated information can significantly slow down the application process — and sometimes result in an automatic rejection.

If you’re applying for a loan online, for instance, and the lender uses automated underwriting technology, inputting inaccurate data can trigger a rejection regardless of the strength of your credentials. Before submitting your application, it can also be helpful to ask an employee, partner or business advisor to review it.

3. Seek expert advice

Although banks remain the most common source of credit for small businesses, there are many other funding options entrepreneurs can consider, including online loans, small-business grants , and equity financing. Twenty-one percent of small-business owners, however, say understanding all of the financing options available to them is a concern for their business in the next 12 months, according to the survey.

To help guide your funding search, it can be useful to work with a free or low-cost business advisor through an organization like SCORE or your local small-business development center. Experts from these organizations can help you organize your finances, compare funding options, and even prepare and submit loan applications.

Some lenders, like community financial development institutions (CDFIs) and nonprofit organizations, offer similar advisory services, in addition to their own loan options.

This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet February 13-15, 2024, and February 20-22, 2024, among 335 U.S. adults ages 18 and older who own a small business. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 6.4 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected] .

NerdWallet disclaims, expressly and impliedly, all warranties of any kind, including those of merchantability and fitness for a particular purpose or whether the article’s information is accurate, reliable or free of errors. Use or reliance on this information is at your own risk, and its completeness and accuracy are not guaranteed. The contents in this article should not be relied upon or associated with the future performance of NerdWallet or any of its affiliates or subsidiaries. Statements that are not historical facts are forward-looking statements that involve risks and uncertainties as indicated by words such as “believes,” “expects,” “estimates,” “may,” “will,” “should” or “anticipates” or similar expressions. These forward-looking statements may materially differ from NerdWallet’s presentation of information to analysts and its actual operational and financial results.

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