How to Create a Winning Business Plan for Banks & Lending Institutions

Tools and plans for creating a Winning Business Plan for Banks & Lending Institutions


"In preparing for battle I have always found that plans are useless, but planning is indispensable." - Dwight D. Eisenhower

A business plan outlines your vision, strategy, and tactics for accomplishing your business goals. This form of a business plan assumes that banks and lending institutions are your target audience.

There are 3 main types of business plans depending on their target audience. While they have a lot in common, they are significantly different and selecting the correct one is important. See Comparison between business plan types for more information.


What drives you?

To help determine what's important to you and what you want to achieve both in your business and personal life, you might want to answer these questions about your short and long-term goals:

  • What is important to you personally?
  • How you define personal success?
  • How do you expect your own business to achieve these goals?
  • Since stating your business, have your reasons for owning a business changed?
  • What do you hope to achieve financially?

Collect Key Business Documents

You may be asked for current information from one or more of the following business documents:

  • Incorporation papers, if they exist
  • Shareholder Agreements, if they exist, including:
    • Names of the shareholders
    • % share of the company each shareholder owns
  • Financial statements, including audit reports, if they exist:
    • balance sheet
    • income statement
    • cash flow
    • forecasts
  • Banking statements
  • Investment statements
  • Personal banking statements - for you and your spouse (if applicable)
  • Personal investment statements - for you and your spouse (if applicable)
  • Government revenue agency Notice of Assessment - for you and your spouse (if applicable)
    • In Canada, that is the Canada Revenue Agency (CRA)
    • In U.S.A, that is the Internal Revenue Service (IRS)

Proforma Information

This is information common to most businesses. Some of which may be optional and can be omitted.

Cover Sheet

Your business plan's cover sheet should be attractive and contain the following information:

  • Legal Name of Business
  • Operating name of business (Different jurisdictions have different names for this):
  • Operating As (OA) business name (if different from legal name)
  • Fictitious Name Trade Name
  • Address including street, unit#, city, postal/zip code, country
  • Mailing Address (if different from above)
  • Telephone number
  • Fax number
  • Email address of principal(s)
  • Web site address
  • Company logo
  • Picture of product or service in action

Table of Content

For longer documents, it is helpful to the reader to have a Table of Contents. Most word processors can produce these automatically from the section headings styles you use in your document. For example, a document containing styles Heading1s, Heading2s, and Heading3s can produce a three level table of contents based on these headings.

Basic Business Information

  • A single sentence describing what your business does.
  • Form of business ownership (Legal name for form of ownership)
    • Sole proprietorship
    • Partnership
    • Incorporated
  • Date business established
  • Date of business name registration
  • Date of incorporation (may be same as above)
  • Who are the owners/shareholders of the business?
    • Name
    • % of ownership for each owner/shareholder
  • Number of employees
  • Full-time or Part-time
  • The product or service your business provides
  • Does your company do business outside of Canada?
    • Important because of your foreign exchange exposure and how this can affect your forecast.
  • Industry sector (SIC code with description)
  • Professional advisors over last few years:
    • Accountants
    • Lawyers
    • Consultants
  • Key person insurance
    • How much?
    • With whom?
  • Succession planning
    • What plans exist in case of owners/key personnel's death, illness or retirement?
  • Other related/associated companies/joint ventures:
    • If you or your company have other business relationships, for each, provide:
      • Company name
      • Person(s) directly involved
      • Person(s) position in company
      • Relationship chart between all parties involved.

Basic Financial Information

More details will be requested later, but this is the most basic.

Current banking arrangements

  • Bank and branch location used for business accounts with account numbers
  • Bank and branch location used for personal accounts with account numbers
  • Loan(s) outstanding:
    • Type of loan(s)
    • Amount of loan(s)
    • Repayment terms for each loan

Financial Requirements

  • How much have you personally invested in your business to date?
  • How are you going to fund your business going forward?
  • What major business purchases have you made this year?
  • What major business purchases do you plan to make next year?
  • Do you need to borrow money?
  • How much do you plan to borrow?
  • What type of financing do you require?
    • Please select all that apply:
      • Business line of credit
      • Equipment loan or term loan
      • Business mortgage
      • Other
      • Specifically, what will your bank loan(s) be used for?
      • How will you repay your loan(s)?
  • What type of security can you offer?
    • Cash
    • Principal residence
    • Owner-occupied business property
    • GICs
    • Savings bonds
    • Equipment
    • Leaseholds
    • Personal guarantee
    • Other
  • Required Financial Statements
    • Balance Sheet - if business has income and expenses, shows assets, liabilities, and shareholders equity.
    • Income Statement - if the business has income and expenses, shows income, expenses, and profit.
    • Cash Flow Forecast - your estimated sources of income and anticipated expenses for the next 3-5 coming years.

The Royal Bank of Canada® has an excellent set of sample financial statements. Click any link below:


The finance section is your chance to see whether your business will survive financially. It is also an important benchmark by which you can gauge your progress against your original projections.

To prepare your financial plan, you will need to determine the type and amount of expenses your business will incur. This information forms the basic financial statements for your business.

These financial statements should show the expected results for the first or current year of operations. They should also include three to five year projected estimates based on documented assumptions regarding future events or operations for your business. If you are creating a business plan for an ongoing business, include past financial statements.

Be realistic in your financial projections and be skeptical of overly optimistic projections. You may even want to include best, worst and most likely case scenarios.


There are two types of expenses: one-time expenses and operating expenses:

  • One-time expenses are costs incurred only once when setting up your business. For example, registration fees, and incorporation fees).
  • Operating expenses are ongoing costs that allow you to stay in business. This includes monthly payments such as salaries, rent, utilities. It also includes occasional expenses such as annual auditing fees, legal fees, and consulting fees.

These figures are important for two reasons: they are need as part of your business plan for your cash flow and balance sheet statements; and they help determine how much financing you will need to get your business to a break-even point (when income equals expenses) and an estimate of when this will happen.

One-Time Expenses

The One-Time Expenses section can include, but is not limited to:

  • Down payments on:
    • Purchase of property
    • Deposit on rent
    • Deposit on fixtures
    • Deposit on equipment
    • Deposit on purchase or lease of vehicles such as cars/trucks
    • Deposits on utilities such as phone, electricity, heating, etc
  • Facility improvements:
    • Decorating and remodeling
    • Equipment/fixture installation
    • Leasehold improvements
    • Starting inventory, if applicable
    • Promotion for opening, if new business
    • Licenses and permits
    • Incorporation costs, if new business
    • Product development costs or franchise fees, if new business
    • Other unexpected one-time expenses

Operating Expenses

Your Operating Expenses section can include, but is not limited to:

  • Management salaries
  • Other staff salaries
  • Rent or mortgage payments
  • Raw materials
  • Write-offs, if any
  • Depreciation, if any
  • Amortization, if any
  • Storage Distribution
  • Office supplies (eg. postage, pens, paper, etc.)
  • Telecommunications (e.g. telephone, Internet service, mobile, etc.)
  • Office equipment (eg. computer, printer, network devices)
  • Electricity
  • Insurance, including workers' compensation board/commission premiums
  • Promotion (eg. Advertising, sponsorship, public service activities)
  • Selling expenses
  • Travel and entertainment expenses
  • Professional services (eg. Consultants, accountants, lawyers, etc.)
  • Maintenance (eg. plant, office, equipment, etc.)
  • Repayment of loan capital and interest
  • Other financial expenses (eg. sales discounts, bad debts)
  • Other expenses

Income Statement

An income statement shows your profit or loss for a given period of time, (eg. from the beginning to the end of the month. It details all revenues, expenses and other costs. The income statement and the cash flow statement it should both be prepared on a monthly or quarterly basis. This gives management an idea of the health of the business and allows them to be anticipate issues that need attention.

The income statement is mainly an accounting tool used to measure a business' performance. The cash flow statement is used to monitor a business' cash position and is important for the day-to-day running of the business.

Cash Flow Statement

Your cash flow statement shows how much money your business has at a given a moment in time. Your cash flow is positive if your cash inflows (collected revenue) exceed cash outflows (disbursements). Your cash flow is negative if your cash outflows exceed your cash inflows.

A cash flow statement should be prepared on a monthly basis, or at minimum, quarterly. This gives management an idea of the health of the business and allows them to be anticipate issues that need attention. The importance of anticipating and planning for these fluctuations can't be overstated.

There is a very important difference between your income statement and your cash flow statement:

  • Your income statement reports the changes in your cash position from the start of a given period of time to its end.
  • Your cash flow reports your cash at a given point in time. There is no period associated with a cash flow statement. You would use it to tell you your cash position now.

In preparing your Income Statement and Cash Flow Statement, watch out for:

  • Using overly optimistic sales growth estimates - most businesses grow gradually.
  • Ignoring seasonal fluctuations - does your business depend on warm weather?
  • Underestimating the cost of increased sales in terms of expenses or cash outflows.
  • Assuming that collections will always be made in 30-60 days - they may take longer.

Balance Sheet

Like a cash flow statement, a balance sheet is a report of the financial state of your business at a given moment in time. Unlike a cash flow statement, it reports on your assets, liabilities and equity, not just your revenue and disbursements. It shows the net worth of the business.

A balance sheet includes current assets such as accounts receivable, inventory on hand, and cash balance. It should also report such fixed assets such as property, equipment, furniture, fixtures, and vehicles.

Current liabilities might include accounts payable and debts that you must pay within a year such as to suppliers and creditors. Long-term liabilities include long-term loans, like mortgages, equipment loans or loans you make to the business. Shareholder's equity is permanent funds put into the business by yourself or by others who invested in your business for a share of ownership (capital stock) and retained earnings.

The Royal Bank of Canada® has an excellent set of examples. To see the Finance section of a sample business plan, click on any of the example company logos below:

Risks & Conclusions

Every business is risky. Thus, you need to think through and outline possible risks to your business. This shows that you understand the risks and, as far as you can, have made allowances for them. Give details on how you plan to minimize the risks.

For credibility, clearly tell your reader all your known risks within the appropriate sections of your business plan. For example, discuss the human resource risks of not being able to find skilled labour.

Consider the following risks:

  • Industry related risks.
    • For example, changes in the law covering your industry.
  • The business you bought carried liabilities.
    • For example, what if the business you leased or bought has an outstanding balance in its account with your provincial workers' compensation board/commission.
  • Demand for your goods or services decreases.
  • The number of your competitors increases.
  • Producing your product or service.
  • Your marketing plan fails. Human resources risks.
    • Changes to your management team, advisors and your employees.
  • A key employee quits.
  • A key employee gets hurt on the job.
  • You run out of cash.
    • The steps you would take to resolve problem.
  • Your major supplier has financial difficulties.
    • You have lined up other suppliers.
  • Environmental risks from your product or service face?


A business plan is one of the most important tools you will have to start and grow your business. It should also be a ¨living¨ document that you keep updated.

Clearly restate the goals and objectives for your business.

If your plan has been designed to get financing - state the amount you need and how you will use it.

Your conclusion section should be concise, clear and leave a positive impression.

The Royal Bank of Canada® has an excellent set of examples. To see the Risks and Conclusions section of a sample business plan, click on any of the example company logos below:

Sample Business Plans

The Royal Bank of Canada® has an excellent set of examples. To see full sample Business Plans, click on any of the links below:


There are many excellent resources on the Web for creating business plans. Some of the available resources are listed below.

  1. Planning your business, Royal Bank of Canada® — One of the best free Business Plan guides we have found. Also, they have some excellent examples.
  2. Writing a Business Plan, Scotia Bank — One of the best free interactive business plan builders. They also include a web-based Business Plan Guide.
  3. My Business Planner, TD Canada Trust — A simple to follow free template for creating a business plan geared to banks and lending institutions.
  4. Your Guide to Business Planning, CIBC — A free business plan template based on a PDF file which you can download. Geared for banks and lending institutes.
  5. Bplans — A comprehensive site on business and marketing plans, including free examples, proprietary templates and commercial software for generating plans.


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