What an SBA loan business plan is for
When you apply for an SBA-guaranteed loan, the lender is deciding two things: whether the business can repay the loan from its cash flow, and whether the owners have put enough of their own money and experience into it. The business plan is where you answer both. Lenders read the funding request and the financial projections most closely, test every assumption, and compare the plan against the lending rules, including the 10 per cent minimum equity injection for start-ups and changes of ownership that took effect on June 1, 2025.
This template gives you both halves. The Word plan follows the SBA's traditional business plan format: executive summary, company description, market analysis, organization and management, products and services, marketing and sales, funding request, financial projections and appendix, with prompts that tell you what a lender expects in each. The Excel workbook does the numbers: a loan request sheet that calculates the monthly payment and checks that sources equal uses and that the equity injection meets the minimum, a 12-month cash flow, a three-year projected profit and loss with interest from the loan amortization and the debt service coverage ratio for each year, and a break-even analysis. A lender document checklist completes the package.
When to use it
Use it when you are applying for an SBA 7(a), 504 or microloan to start a business, buy an existing business or franchise, or expand, and the lender has asked for a business plan with projections. It also works for conventional bank loans and for meetings with SBA resource partners such as SCORE and Small Business Development Centers.
The workbook ships with fictional example figures for a bakery so you can see every formula working; replace the yellow cells with your own. If you are buying a business, add the seller's historical financials and the purchase agreement, and confirm with your lender how any seller note will be treated.
What's inside
The full list of sections and fields in this template, in the order they appear.
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Business plan sections
- Cover details
- Executive summary
- Company description
- Market analysis and competitors
- Organization and management
- Products and services
- Marketing and sales
- Funding request
- Financial projections
- Appendix
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Loan Request sheet
- Loan amount
- Rate and term
- Monthly payment
- Annual debt service
- Uses of funds
- Sources of funds
- Balance check
- Equity injection and 10% check
- Seller note limit
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Cash Flow 12 Months sheet
- Opening cash
- Sales
- Loan and equity
- Thirteen expense lines
- Loan payment
- Purchases
- Net cash flow
- Closing cash
- Lowest balance
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Projected P&L sheet
- Years 1 to 3
- Growth rates
- Gross profit
- Operating expenses
- EBITDA
- Depreciation
- Interest from amortization
- Net income
- Debt service coverage ratio
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Break-Even sheet and checklist
- Gross margin
- Fixed costs
- Break-even sales
- Margin of safety
- Lender document checklist
Preview pages
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Page 1 -
Page 2 -
Page 3
How to complete the plan
- Start with the numbers. Enter your loan request, uses of funds and sources in the workbook's Loan Request sheet.
- Check the equity injection. Make sure the owners' cash meets the 10 per cent minimum if you are a start-up or buying a business.
- Build the cash flow. Enter realistic monthly sales and every expense for the first 12 months.
- Set growth assumptions. Enter sales and expense growth for years 2 and 3 on the Projected P&L sheet.
- Test repayment. Check the debt service coverage ratio and the lowest cash balance, and adjust until the plan is realistic.
- Write the market and marketing sections. Use real data and name your competitors.
- Describe the owners. Show the experience that qualifies you to run this business.
- Write the executive summary last. Summarize the request and the repayment case on one page.
- Gather the documents. Use the checklist, including SBA Forms 1919 and 413.
Example: the workbook's sample figures
The workbook's example is a fictional bakery, Maple Street Bakery LLC, opening in a leased storefront:
Uses of funds: leasehold improvements $85,000, equipment $95,000, inventory $15,000, working capital $73,000, closing costs and fees $12,000: total project cost $280,000. Sources: SBA 7(a) loan $250,000 over 10 years at 10.5%; owner cash $30,000, which is 10.7% of the project cost and meets the minimum. Loan payment: $3,373 a month, or $40,480 a year. Year 1: sales $478,000, EBITDA $51,600, debt service coverage 1.27 times; lowest month-end cash $56,980. Years 2 and 3: debt service coverage 1.97 and 2.41 times; break-even sales $461,648 a year.
The plan explains that sales assumptions are based on 240 customers a day at an average ticket of $6.50 plus two wholesale café accounts, and shows what happens if sales are 10 per cent lower.
SBA rules to know
These are the federal rules and practices this plan is built around.
- SBA traditional business plan format. Nine common sections, with the funding request and financial projections central for lenders.
- Equity injection (SBA SOP 50 10 8, effective June 1, 2025). At least 10 per cent of total project costs for start-ups and complete changes of ownership; seller notes count only on full standby and up to half the injection.
- Loan programs. 7(a) loans up to $5 million; microloans up to $50,000; 504 loans for real estate and major equipment.
- Personal guarantees. Owners of 20 per cent or more generally guarantee SBA loans.
- Borrower forms. SBA Form 1919 (Borrower Information Form) and Form 413 (Personal Financial Statement).
- Repayment ability. Lenders look for cash flow that covers debt service with a margin, commonly a coverage ratio of at least about 1.15 to 1.25.
Mistakes that get SBA applications declined
The common problems are projections with no stated assumptions, sales that jump to full capacity in month one, cash flow that leaves no working capital, an equity injection below the minimum or from an undocumented source, uses of funds that do not match the quotes, a debt service coverage ratio below 1.0 in year one, and a market section with no named competitors. Building the numbers in the workbook first and writing the plan to match them avoids each of them.
Frequently asked questions
Do you need a business plan for an SBA loan?
SBA lenders generally ask for one, especially for start-ups and business acquisitions, together with financial projections and the assumptions behind them. Existing businesses also provide historical financial statements and tax returns. A clear plan with realistic numbers is often what separates an approved application from a declined one.
How much equity do you need for an SBA loan?
Under SBA's lending rules effective June 1, 2025 (SOP 50 10 8), start-ups and complete changes of ownership need an equity injection of at least 10 per cent of the total project cost. A seller note can count toward it only if it is on full standby for the life of the loan and makes up no more than half of the required injection. Lenders may require more.
What debt service coverage ratio do SBA lenders want?
The debt service coverage ratio compares the cash a business generates to its annual loan payments. Many lenders look for at least about 1.15 to 1.25, meaning the business earns $1.15 to $1.25 for every $1 of debt payments. The workbook calculates it for each projected year.
What should be in the funding request section?
The amount, loan program, term and estimated rate, a sources and uses of funds table showing exactly what the money will buy, the owners' equity injection and its source, and the collateral and personal guarantees offered.
What is the largest SBA 7(a) loan?
The standard 7(a) program allows loans of up to $5 million. Microloans go up to $50,000, and the 504 program finances real estate and major equipment. Your lender will recommend the program that fits your project.
