How to write a business plan a lender will actually read

A credit assessor can have a stack of files on their desk. Yours may get a few minutes at first look. If the request, the repayment source and the key numbers aren’t obvious in that time, the file goes to the back of the pile or comes back with questions.

That is the lens to use for a business plan. Forget the plan that sits in a drawer to remind you of your vision. This guide is about the document that sits in front of a lender, and what it should contain so that a stranger can say yes.

What do lenders actually want from a business plan?

Business.gov.au says lenders usually want a plan so they can see an overview of your finances and “a clear plan for success”, and that you should keep it current. It also names what may be requested alongside it: ID, cash flow statements and other financial reports, forecasts, leases, and your personal financial position.

Behind the paperwork, an assessor is working through four questions:

1. What exactly is being asked for? Amount, purpose, term.
2. Where will repayments come from? Specific income, not general optimism.
3. What if it goes wrong? Security, buffer, other income, a second way out.
4. Do these people know what they’re doing? Experience, track record, own money in the deal.

Organise every page around those. Anything that doesn’t help answer one of them can be cut.

What goes on page one?

Make page one a standalone summary. Many assessors never get past it before deciding how much effort to spend.

Include:

• The request: “$180k over four years to buy a second van, kit it out and fund three months of wages for a new technician.”
• How the funds will be used, in dollars, by line.
• What you are putting in yourself.
• The repayment source, with a figure: “The new van is forecast to add about $9k a month in gross margin; repayments are about $4.5k a month.”
• The security offered, if any.
• Three or four headline numbers: last year’s turnover, current monthly takings, forecast margin, and the month you break even on the new activity.

Notice that this page contains no history of the founder and no mission statement. Those can follow.

What sections should the rest include?

This order suits a typical small business and comes to roughly ten pages.

Section	Length	What it must show
Business overview	Half a page	Structure, ABN, ownership, location, how long you’ve traded
Products and customers	1 page	What you sell, who buys, why they choose you, your pricing
Market and competitors	1 page	Who else serves them and where you sit; local facts, not national statistics
Operations and people	1 page	Who does what, key staff, suppliers, premises, licences
Sales and marketing	1 page	Where leads come from, cost per lead, return
Financial history	1 page	Last two years’ results, trend in monthly takings
Forecast	2 pages	Monthly cash flow for 12 months, profit forecast, assumptions
Risks and responses	1 page	Biggest five risks, each with a fallback
Attachments	n/a	Quotes, contracts, lease, licences, resumes

Business.gov.au also has a SWOT analysis tool and a SMART goals guide on its planning pages, which can help you find the risks section’s content, though lenders prefer concrete risks like “our largest customer is 35 per cent of revenue” to generic SWOT bullets.

How do I build the forecast lenders trust?

The forecast is where plans are won or lost. A few principles:

Monthly, not annual. An annual profit figure hides the months where cash runs out. A cash flow forecast month by month shows whether you can pay the loan and the wages in the slowest month. If you need a shorter horizon, our 13-week cash flow forecast guide shows the method.

Assumptions written down. List each one: average sale, conversion rate, supplier terms, debtor days, wages, rent. Lenders compare them with your bank statements and with norms for your industry. An assumption that conflicts with your own history is the quickest way to lose credibility.

Timing of GST, BAS and payroll. Many first-time plans ignore the cash timing of GST and PAYG, which can make a profitable forecast look cash positive when it isn’t. Include it.

Break-even. Show the month the new activity covers its own costs. The break-even calculator gives a quick starting figure.

A downside case. Re-run the forecast with sales 20 per cent lower for three months. Show the result and what you would cut. A plan that shows its own stress test is more convincing than one that insists nothing can go wrong.

Pitched to a bank or any other lender, this is the section that earns the loan. If your plan is for a bank, take the process seriously: banks are often the cheapest money, and a thorough plan helps you if your trading history and documents fit their criteria.

Doubting whether the figures hold together? Share the headline numbers and get a straight answer on how a lender would read them.

How do I write a plan with no trading history?

New businesses can’t point to last year’s results, so the plan has to carry more weight from other evidence:

• Your experience. Years in the trade, previous roles, qualifications and licences.
• Hard commitments. A signed lease, supplier quotes, pre-orders or letters of intent from customers.
• Your own money. Savings invested show you carry the first loss.
• Comparable businesses. Local examples of similar operators with their approximate size, described factually.
• A cautious ramp-up. Lenders expect slow starts. A forecast that reaches full capacity in month three will be discounted.

Our page on the first business loan explains how lenders see new ABNs, and how to fund a startup in Australia compares the other options.

A worked example of a before-and-after

Consider a mobile dog-grooming business in its second year, asking for a $55k loan for a larger van and fit-out.

Before: Four pages describing the owner’s love of animals, a paragraph saying “demand is strong,” and a forecast with one annual total of $140k revenue.

After: A front page stating the $55k request, the $15k owner contribution and the monthly repayment. Takings by month for the last 14 months, showing a steady rise from $6k to $9.8k. Booking-system evidence that the diary is full three weeks ahead. A forecast showing the bigger van adds capacity for 10 more appointments a week at an average price the owner has actually charged. A downside case with lower bookings for two months, and the owner’s response: pause a planned hire. A supplier quote and a copy of the lease on the parking space.

Nothing about the business changed. The second version simply answers the assessor’s questions before they are asked.

Common mistakes to avoid

• Copying a template and leaving the generic text. Assessors see the same paragraphs repeatedly.
• Hockey-stick forecasts. Growth that ignores seasonality or the time to win customers.
• Hiding the awkward bits. An overdue lodgement, an old default or a poor year reads better when you raise it yourself. See how to explain a bad year to a lender.
• No link between the plan and the statements. If the plan says $12k a month and your statements show $8k, explain the gap.
• Too long. Thirty pages of narrative suggests the writer doesn’t know what matters.

Ready to test the plan against real options?

Once the plan is written, the next step is working out which type of lender it suits. We can do that for you. Put the amount, purpose and timing into our form: sixty seconds or so, and your credit file isn’t looked at just because you asked.

Your plan won’t be scattered across the market. One of our people reads your situation and rings you to talk it through. Fill the form in accurately, since the right match depends on details like trading history, security and how fast you need funds.

Show me where my plan fits →