Quick answer
A business plan is a written document setting out what a business does, who its customers are, how it will make money and what it needs to get there, including the funding. Lenders mostly ask for one when there's little trading history to judge: startups, business purchases, franchises and big expansions. For established businesses, financial statements and bank records usually matter far more than the plan.
Key points
- Covers the business, market, operations, risks and financial projections
- Most important for startups, acquisitions and expansions with no track record yet
- Credit teams focus on the funding request, the forecast and the repayment logic
- A one-page plan is a sensible starting point and can grow into the full version
A business plan is the written case for your business: what it sells, who buys it, how it runs and how the numbers work. When you’re borrowing, it doubles as your argument for why the lender will get its money back.
What goes into a business plan?
Templates vary, but most cover the same ground:
| Section | What it answers |
|---|---|
| Summary | What the business does and what you’re asking for |
| The business | Structure, ABN, owners, key people and experience |
| Market and customers | Who buys, why, and who else competes for them |
| Operations | Premises, suppliers, staff, equipment |
| Risks | What could go wrong and how you’d respond |
| Finances | Projected profit and loss, a cash flow forecast, funding needed and how it’ll be used |
Business Queensland suggests starting with a one-page version covering your value proposition, customers, risks, projected income and expenses, then expanding it. That’s good advice for anyone who has stalled at a blank template.
Why a lender asks for one
Lending is about predicting whether repayments will be made. When a business has years of tax returns and steady bank statements, the past does most of the predicting, and a plan adds little. When there’s no history, the plan is all the lender has.
That’s why plans matter most for:
- Startup business loans, where the ABN is new and the forecast carries the application
- Business acquisition loans, where the lender wants to know how you’ll keep the customers you’re buying
- Franchises, fit-outs and second locations, where the spend comes before the revenue
Have a plan ready and a clear amount in mind? Run it past us for an honest view of what lenders might offer.
What credit teams actually read
Be honest with yourself here: a credit analyst with a pile of files will not read 40 pages. They tend to go straight to three things.
- The funding request. How much, for what, and over what term. Vague asks (“around $100k for growth”) get vague answers.
- The forecast. Are the sales assumptions believable compared with similar businesses? Do the costs include your own wage, GST, super and loan repayments?
- The repayment logic. If sales come in 25% below forecast, can the loan still be paid? Showing that you’ve tested a weaker scenario builds more confidence than an optimistic one.
Our longer guide on writing a business plan lenders will read works through each section in detail.
An Australian example
Tom and Priya are buying an established bakery in Ballarat for $420k and need $250k of finance. The vendor’s financials show the past, but the lender wants to know what changes under new owners. Their eight-page plan explains that Priya, a qualified baker, will replace a departing head baker, that wholesale café accounts are on written agreements, and that a weekend market stall will be dropped. The forecast includes their own wages and the new loan repayments, plus a version with wholesale sales down by a fifth. The lender’s questions focus on the café contracts, and the plan answers them before they’re asked.
Related terms
A plan leans on a profit and loss statement and a forecast, and our break-even calculator helps you find the sales level the plan must clear. If this is your first time borrowing, read our page on taking out a first business loan, and keep the business loan documents checklist handy.
Plan written, now for the funding
A good plan shows where the business is heading; the right loan helps it get there. Our enquiry takes about a minute to fill in, and no credit check happens when you send it. It reaches our team only, not a scattering of lenders, and a person who has read your details gives you a call. Give us accurate figures from your plan, and we can steer you towards a lender likely to back it the first time round.
Frequently asked questions
Do I need a business plan to get a business loan?
Not always. Established businesses applying for working capital or equipment finance are usually assessed on bank statements, BAS and financial statements instead. A plan becomes important for startups, business purchases, franchises and large projects, where the lender has to judge the future rather than the past.
How long should a business plan be for a lender?
Long enough to answer the lender's questions and no longer. For a small loan, a few pages with a clear funding request and a 12-month cash flow forecast is often enough. Larger or riskier deals need more detail on the market, management and assumptions.
Is there a free business plan template in Australia?
Yes. Business Queensland offers a free downloadable template and suggests starting with a one-page plan, and business.gov.au lists other templates. Whichever you use, adapt it to your industry rather than filling in every heading for the sake of it.
How often should I update my business plan?
At least once a year, and whenever something significant changes, such as raising capital, adding staff or entering a new market. A plan written three years ago for a different business model won't help a loan application today.
Should my accountant write my business plan?
Your accountant can help with the financial projections and check the numbers hang together, and lenders often value that. The rest is better written by you, because a lender wants to see that the owner understands the business and its risks.