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Equipment SBA Loan: How to Write Business Plan For Application
How to Write a Business Plan For Your Equipment SBA Loan Application
How to Write a Business Plan For Your Equipment SBA Loan Application

How to Write a Business Plan For Your Equipment SBA Loan Application

How to Write a Business Plan For Your Equipment SBA Loan Application

When your business has big expansion plans, it requires preparation. You need to gather the paperwork to illustrate your company’s objectives, strategies, finances, and other information relevant to the project.

It is common for entrepreneurs to seek funding through Small Business Administration (SBA) 504 loans for fixed assets. If eligible, small businesses can enjoy an array of SBA loan benefits like equipment financing, real estate financing, a low down payment, up to 90% coverage, and more.  

By following these steps in drafting your business plan, you can become one step closer to maximizing your chances for approval.

Step One: Executive Summary

A well-written business plan starts with an executive summary: an overview of your company’s goals and financial needs. A concise section that comprises no more than two pages, its purpose is to grab the reader (or SBA) ’s attention with an expertly-crafted business story. Here, you can briefly describe your products or services, the market you serve, and your company’s competitive advantage. With the right persuasion, you can pitch your financial request.

Step Two: Company Description

The company description is your opportunity to dive into your company’s history, ownership structure, and management team. Narrate the nature of your business and the roles involved within your team, as well as provide additional details on your company’s strengths—such as proprietary technology, superior customer service, or a unique market position. This will prove to the reader why your company deserves an SBA 504 loan and the legitimacy behind your intentions to acquire new or improved equipment.

Step Three: Market Analysis

How well does your business know its current market? A market analysis is a thorough qualitative and quantitative examination of market statistics.  

In this section, you will demonstrate your understanding of your target market and willingness to build a smarter business strategy. Statistics to include are market size, growth rate, and demographics. Likewise, indicate any market gaps your business has experienced recently and your plans to address them. With insightful market analysis, the reader can pinpoint your company’s strengths and weaknesses.

Step Four: Products or Services

Along with market statistics, history, and goals, you must let your products or services shine, too. List relevant features, benefits, and how they serve your target audience. Provide specific pricing information, pricing strategy, and any registered patents or trademarks.

Step Five: Marketing and Sales

Going off Step Four, your marketing and sales strategy goes hand-in-hand with the goods or services you offer. You must also include how you will reach your target market with the marketing channels you use and how your sales strategy trumps the competition. Additionally, give the reader a clear picture of your sales forecast, which outlines your revenue projection for the next three to five years.

Explore More: SBA 504 Lending Equipment Loans

Step Six: Management and Operations

As mentioned in Step Two, your management structure is a key detail that must be elaborated on in your business plan. To do this, you can create an organizational chart that outlines your team’s structure, responsibilities, and day-to-day operations within the supply chain. To push the persuasive tactics further, showcase your employees’ qualifications, experience, and industry-specific licenses or certifications. You can also highlight your inventory management practices and manufacturing processes if relevant.

Step Seven: Financial Projections

Arguably the most important element of your business plan, your finances can make or break your chances of securing an SBA equipment loan. Why? Because it demonstrates your ability to repay the equipment loan. To prove your business’s financial stability, include a detailed financial forecast that contains profit and loss projections, personal and business financial statements, personal and business tax returns (past three years), active bank accounts, and equipment cost documentation.

Ready to Start Your SBA 504 Loan Application? 504 Capital Is Here to Help.

With a clear and concise business plan, you can prove your business’s worth to your lender and earn their financial trust. With all of the proper documents in order, you become one step closer to securing your SBA 504 equipment loan and another step closer to obtaining the equipment your business needs to see peak growth.

For more information on SBA equipment loan benefits or how you can begin the 504 application process, reach out to our Virginia, Maryland, and North Carolina professionals here.

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