How to Make a Business Plan for a Loan: 6 Steps to Follow

Use the following six steps to organise your business plan and prepare the information a lender may need to assess your proposal.

Step 1: Write a concept statement

Start by explaining the core idea behind your business. Describe your mission and vision, the products or services you offer, your target customers, and the value your business provides. Explain what differentiates your offering from alternatives in the market.

Include the business name, location, ownership structure, and stage of operations where relevant. The aim is to give the reader a clear understanding of what the business does and the need it intends to meet.

Step 2: Research the market and industry

Research your target market, customers, suppliers, competitors, and the wider industry. Use relevant information to explain the demand for your product or service, the price customers may be willing to pay, and the factors that could affect sales.

Identify your competitors and explain how your business will position itself. Support key claims with evidence where possible, and avoid relying on assumptions that cannot be explained or substantiated.

Step 3: Create a business plan outline

Once you have gathered the relevant information, organise it into a clear outline. A practical structure includes an executive summary, business description, market analysis, marketing plan, operations or production plan, management details, financial projections, loan purpose, repayment plan, and supporting documents.

You can use a suitable business-plan template, including a government-provided template where relevant, as a starting point. Adapt the outline to your business and the lender’s document requirements rather than treating any single template as mandatory for every application.

Step 4: Develop the key elements of your business plan

The main sections should explain the business opportunity, how you will operate, and how the proposed borrowing fits into your plans.

Executive summary

Summarise your business, its products or services, target market, management, funding requirement, and intended use of the loan. Although it appears near the beginning, it is often easier to write this section after completing the rest of the plan.

Marketing plan

Describe your offering, target customer groups, pricing, competitors, and the channels you will use to reach customers. Set out your sales goals and explain how your marketing activities are expected to support them.

Production or operations plan

Explain how the business will deliver its products or services. Depending on the business, this may cover suppliers, production stages, equipment, staffing, premises, inventory, capacity, delivery, and the time and funds needed for each activity.

Financial plan and loan repayment

The financial plan should give a realistic view of your business’s financial position and expected performance. Include the following, where applicable:

• Cash-flow statements and forecasts.
• Break-even analysis.
• Return-on-investment calculations for the planned expenditure, where relevant.
• Sales and profit forecasts for the next three years.
• The amount of funding required and a breakdown of how it will be used.
• The proposed repayment period and the cash flow available to meet instalments.

Make the assumptions behind your forecasts clear. Consider sales volumes, prices, cost of goods, wages, rent, taxes, seasonal demand, and other material expenses. If your business is already operating, use historical figures to support the projections.

If you are planning to apply for a business loan, explain how the funds will be used and how repayments are expected to be made. Use the Business Loan EMI Calculator to estimate instalments and assess affordability, and review the business loan interest rates and charges before deciding on the amount and tenure.

If you have identified a specific funding requirement, reviewing an available offer can help you understand the next steps. Check your pre-approved business loan offer to review whether an offer is available to you; eligibility, approval, and final terms depend on the lender’s assessment.

Step 5: Add supporting information

Use an appendix to provide evidence that supports the claims and figures in your plan. Depending on your business and the lender’s requirements, this may include:

• Financial documents and relevant contracts or lease agreements.
• Market research and competitor information.
• Bank statements and financial records.
• Business registrations, licences, and permits.
• Receipts, quotations, or invoices that support planned expenditure.
• Patents or other intellectual-property records, where relevant.

Label the documents clearly and make sure the information is consistent with the figures and statements in the main plan. Submit only documents that are relevant and requested or accepted by the lender.

Step 6: Review and refine your plan

Review the complete business plan before submitting it. Check that the funding requirement, use of funds, financial forecasts, and repayment plan are consistent throughout. Proofread the document for spelling, grammar, missing sections, and unclear statements.

Ask an accountant, mentor, or trusted adviser to review the assumptions if needed. A clear and complete plan can help the lender understand your proposal, but it does not guarantee approval.

A loan business plan should show a lender what the business does, how much money it needs, how the money will be used, and how it will be repaid. The six steps above cover the core parts. The following details can also help a lender assess the proposal:

• An executive summary with the requested loan amount and intended use.
• A business description, legal structure, and details of the products or services offered.
• The management team’s relevant skills and experience.
• Market and competitor analysis supported by data.
• A sales and marketing plan, plus an operations or production plan that can support projected sales.
• Financial statements and forecasts, including the assumptions behind them.
• A breakdown of the use of funds, such as equipment, stock, or working capital.
• A repayment plan showing the cash flow available for instalments.
• Key risks and the steps planned to manage them.
• Supporting documents in an appendix.

Tailor the plan to the lender’s requirements and keep the main document focused and easy to follow. A business plan supports the application, but it does not guarantee approval.

Financial projections should be detailed enough to show how the business earns, spends, and repays, while remaining realistic and explainable. The plan should include cash-flow information and relevant financial statements, with forecasts for the next two to three years where appropriate.

A practical approach is to include:

• Monthly cash-flow forecasts for the first year and annual figures for subsequent years.
• Clear assumptions for sales growth, cost of goods, wages, rent, and the expected borrowing cost.
• Historical figures, where available, so projections can be compared with actual performance.
• A break-even analysis and repayment schedule showing when and how the loan can be repaid.
• Figures that reconcile with bank statements, tax returns, and other business records.

Avoid projections that assume unusually high growth without evidence. A cautious forecast that you can explain is more useful than an ambitious estimate that you cannot support.

A business plan does not determine the interest rate on its own. The rate depends on the lender’s policies and assessment, which may consider the applicant’s credit profile, the business’s financial health and track record, the loan amount, and the tenure.

A clear plan can help explain repayment capacity, show that business risks have been considered, and support a funding request that matches the business’s needs. It may strengthen the overall application, but it does not guarantee approval, a higher loan amount, or a lower interest rate.

Compare current rates and charges, and use an EMI calculator to understand the potential repayment cost before applying.

Yes. A weak or incomplete business plan can contribute to a loan rejection or a lower sanctioned amount, particularly when the lender relies on the plan to understand the business and assess repayment capacity. Common weaknesses include:

• No clear explanation of how the loan will be used or repaid.
• Unrealistic forecasts that do not match historical records or market conditions.
• Insufficient market research or competitor analysis.
• Missing details about the management team or operations.
• Errors, unclear language, or missing supporting documents.

Lenders also assess credit history, bank statements, financial records, eligibility, and other information. A strong plan alone cannot guarantee approval, so review all application requirements before submission.

Once your business plan sets out the purpose of the loan, the expected results, and a realistic repayment strategy, the next step is to review funding options that may match your requirements. A business loan may help eligible businesses fund needs such as working capital, inventory, equipment, or expansion, depending on the lender’s product terms and assessment.

Bajaj Finance offers Business Loans ranging from Rs. 2 lakh to Rs. 80 lakh, with repayment tenures from 12 to 96 months, subject to eligibility and approval.

The interest-rate range is 14% to 23.50% per annum, and processing fees can be up to 4.72% of the loan amount, inclusive of applicable taxes. Other charges may apply depending on the loan variant and transaction. Review the latest fees and charges, loan agreement, and repayment schedule before accepting an offer.

Basic eligibility criteria include Indian nationality, self-employed status, business vintage of at least three years, a CIBIL score of 650 or higher, and an age of 21 to 80 years, with the upper age limit applying at loan maturity. Required documents generally include KYC documents, a PAN card, proof of business ownership, and other financial documents as requested. 

Before applying, check your business loan eligibility to understand the applicable requirements and assess whether the loan may suit your business needs. Meeting these criteria does not guarantee approval, as the final loan amount and terms are subject to the lender’s assessment.

• Click the 'Check Loan Offer' button to open the online application form.
• Enter basic details, including Name, PAN, Date of Birth, PIN Code, and Business details, and click 'CONTINUE'.
• Complete banking verification and continue.
• View your offer details, select the loan type — Term Loan, Flexi Dropline Loan, or Flexi Hybrid Loan — and choose the repayment tenure.
• Review the details and submit the business loan application.