The most common private providers of debt financing include
banks, savings and loans, and commercial finance companies
(hereinafter referred to collectively as banks). These providers
tend to be more conservative than equity investors because they
are loaning depositor's money. Nevertheless, they are in the
business of lending money and constantly looking for
opportunities that meet their criteria to make loans.
In addition to other requirements, banks will insist on a
business plan in the same way a potential employer will want to
see a resume. The resume does not tell the whole story, you will
have to do that during the interview process.
The resume is generally the first thing a potential employer
will see and is used as much to identify unqualified candidates
as identify potential hires. The potential list is always much
smaller than the unqualified list. The challenge is to have a
sufficiently persuasive resume to land you on the potential list
so that you can take the next step, that of securing an
The business plan is your resume when applying for a bank loan.
It says something about who you are, what you plan to do, and
how you plan to do it. It is important that your business plan
be sufficiently convincing to place you on the potential list
making possible the next step, that of presenting your plan in
person where you have the opportunity to convince the lender to
move your application from the potential list to the approve
First impressions are critical. You may only get one chance.
Business Plan Store will prepare you to make the best of that
SBA loans come in a variety of flavors. It is important to do
your research to determine which flavor is applicable to your
The SBA loan program is authorized by the Code of Federal
Regulation, Title 13 (Business Credit and Assistance), Chapter I
(Small Business Administration), Part 120 (Business Loans).
Section 120.2 (Description of Business Loan Programs) states
that "loans provide financing for general business purposes and
(i) A direct loan by SBA;
(ii) An immediate participation loan by a Lender and SBA; or
(iii) A guaranteed loan (deferred participation) by which SBA
guarantees a portion of a loan made by a Lender."
Section 120.151 describes the statutory limits for total loans
to a single borrower as follows: "The aggregate amount of the
SBA portions of all loans to a single Borrower, including the
Borrower's affiliates as defined in Sec. 121.103 of this
chapter, must not exceed a guaranty amount of $1,000,000, except
as otherwise authorized by statute for a specific program. The
maximum loan amount for any one 7(a) loan is $2,000,000."
Section 120.191 (The contents of a business loan application)
states, "For most business loans, SBA requires that an
application for a business loan contain, among other things,
Your business plan must pass this scrutiny for loan approval.
The Business Plan Store will prepare your business plan to to put
your business in the best possible light to meet this challenge.