Last reviewed: 29 September 2026 · Reviewed by IFM's qualified accountant
GOV.UK says a business plan covers objectives, strategies, sales, marketing and financial forecasts and is needed when seeking a bank loan or investment. The lender still makes its own credit decision and may require security or guarantees.
What should you know about start with the request?
State the amount, facility type, purpose, timing and proposed term in the opening page. Explain why that form of finance matches the asset or cash cycle.
A short working-capital gap may suit an overdraft or revolving facility; equipment with a useful life may suit term or asset finance. Persistent operating losses need a credible turnaround or equity solution, not vague borrowing.
Show owner investment and existing facilities. Disclose other applications and contingent commitments accurately.
What should you know about executive summary?
Write one page covering the business, customers, track record, management, current performance, opportunity, funding request, repayment source and principal risks. Write it last after the evidence is complete.
Avoid slogans and unsupported market claims. A lender needs a clear route from demand to cash.
Use consistent figures. If the summary says £200,000 funding and the cash forecast uses £250,000, explain the contingency or correct the mismatch.
What should you know about business and ownership?
Set out legal entity, trading history, ownership, group structure, locations, products, key licences and regulatory status. Include company number and registered details only as verified.
Explain how revenue is earned: contract length, pricing, delivery, billing and payment terms. Describe suppliers, staff and assets needed.
Show the owners' experience and responsibilities without inflated claims. Identify succession or key-person dependency and mitigation.
What should you know about customer and market evidence?
Define the target customer and the problem solved. Support demand with signed contracts, order history, pipeline stages, retention, enquiries or credible research.
Name important concentrations and dependencies. Losing one customer is more significant where it represents half of revenue than where income is diversified.
Explain competitors and alternatives honestly. “No competition” usually indicates the market has not been understood.
What should you know about historic financial performance?
Provide statutory accounts where available, recent management accounts, bank statements and tax status requested by the lender. Reconcile management numbers to filed accounts and explain material adjustments.
Analyse revenue, gross margin, operating profit, cash generation, working capital, debt and owner transactions. Separate exceptional items with evidence, but do not remove recurring costs to manufacture an adjusted profit.
Explain adverse periods directly and show what changed. A credible problem analysis is stronger than silence.
What should you know about forecast profit and loss?
Build monthly forecasts from price, volume, customers, capacity and timing. Link direct costs to sales and create a role-level payroll plan.
Show overhead contracts, inflation assumptions, marketing, insurance and professional costs. Include realistic owner remuneration.
Provide base and downside cases. The lender will test lower sales, slower collections and higher costs even if the plan does not.
What should you know about cash-flow forecast?
Forecast when cash enters and leaves, including VAT, payroll taxes, Corporation Tax or Self Assessment, capital spending, finance fees, interest and repayments. Start from reconciled cash.
Show the lowest cash point, facility draw, headroom and covenant position. A profitable forecast can still fail through slow customer payment or stock investment.
GOV.UK's business-planning guidance points to financial forecasts; the lender needs cash repayment, not accounting profit alone.
What should you know about balance sheet and working capital?
Forecast receivables, stock, payables, taxes, loans, assets and equity. Reconcile retained profit and cash. An unbalanced model undermines confidence.
Explain debtor days, supplier terms and stock cycle. Show how growth changes working-capital need.
Adequate accounting records are a Companies Act duty for companies and also provide the evidence needed for lender monitoring.
What should you know about repayment and security?
State the primary repayment source from operating cash and test it under downside assumptions. Show interest and principal in the forecast from the expected draw date.
Describe proposed assets, debentures or guarantees accurately. Personal guarantees create personal risk and require independent legal advice.
Do not present asset value as repayment without considering valuation basis, existing charges, sale costs and time.
What should you know about risks and mitigations?
List the few risks that can materially affect repayment: customer concentration, key staff, supplier dependency, regulation, price pressure, cyber incidents, delivery capacity and owner health. Pair each with a practical control, trigger and contingency.
Avoid calling every risk low. The quality of monitoring and response matters more than optimistic scoring.
Include insurance and continuity arrangements only where actually verified; never invent cover or credentials.
What should you know about appendices?
Attach forecasts with assumptions, historic accounts, management reports, aged debtors and creditors, ownership chart, key contracts, leases, asset quotes, tax evidence and management biographies. Redact personal data appropriately and use the lender's secure channel.
Version the plan and forecasts. Record which version the lender received and answer follow-up questions consistently.
What should you know about review before submission?
Recalculate formulas, tie opening balances to records and confirm taxes, payroll and VAT. Challenge the sales ramp and hiring dates. Ask someone not involved in drafting to read for gaps.
Submit before funding becomes an emergency. Due diligence, valuation and legal work take time, and approval is never guaranteed.
See management information and consultancy for the relevant service page. Use the Deadline Finder for standard first accounts, first confirmation statement and Corporation Tax dates. For VAT, payroll, personal tax and other obligations, check the tax deadlines calendar and your official records.
What should you know about questions a lender is likely to ask?
Why this amount, why now and why this facility? What has the owner invested? How does the business repay if sales are lower, customers pay late or costs rise?
Which customers, suppliers or people are critical? What security exists, what is already charged and which guarantees are proposed? Are taxes and filings current?
Prepare clear answers with evidence. If an assumption is uncertain, say so and show the control or contingency.
What should you know about data room control?
Create an index and use the lender's secure portal. Include only relevant personal data and keep a record of access and versions.
Tie every forecast opening balance to the latest management accounts. Label draft and final documents and withdraw superseded versions where the portal allows.
What should you know about during due diligence?
Answer the question asked, promptly and consistently. Update the lender if a material contract, dispute, tax issue or forecast changes; silence can damage trust more than the issue.
Record costs, conditions precedent, covenants and reporting obligations before accepting. Model them in cash and management reporting.
What should you know about after approval?
Approval is not cleared money. Complete legal documents, security and conditions before committing the funds to suppliers.
Once drawn, compare actual use with the stated purpose, monitor covenants and report on schedule. The business plan becomes a control document for repayment, not a marketing file to discard.
What should you know about if declined?
Ask for the principal reasons and address the underlying risk before applying elsewhere. More applications do not correct weak cash generation, poor records or an unsuitable facility.
Consider whether the plan points to a smaller project, more owner equity, staged growth or operational changes. A refusal can be useful evidence that the financing structure needs revision.
What should you know about keep the plan current?
Update actual results, cash and material events while the application is open. A lender may request a newer month-end pack before completion.
After funding, compare performance with the base and downside cases. Escalate covenant or repayment pressure early and retain the evidence supporting management's response.
What should you read next?
Management accounts, small-business KPIs and management information services.
What do people also ask about this topic?
What should you know about start with the request?
State the amount, facility type, purpose, timing and proposed term in the opening page. Explain why that form of finance matches the asset or cash cycle.
What should you know about executive summary?
Write one page covering the business, customers, track record, management, current performance, opportunity, funding request, repayment source and principal risks. Write it last after the evidence is complete.
What should you know about business and ownership?
Set out legal entity, trading history, ownership, group structure, locations, products, key licences and regulatory status. Include company number and registered details only as verified.
What should you know about historic financial performance?
Provide statutory accounts where available, recent management accounts, bank statements and tax status requested by the lender. Reconcile management numbers to filed accounts and explain material adjustments.
Which official sources support this guide?
- https://www.gov.uk/write-business-plan
- https://www.gov.uk/business-finance-support
- https://www.gov.uk/running-a-limited-company/company-and-accounting-records
General guidance, not advice for your situation.
