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Business Planfor a Bank Loan
How to write a business plan that holds up in the credit review: chapter by chapter, from the bank’s perspective.
Have your financial section written
How to write a business plan that holds up in the credit review: chapter by chapter, from the bank’s perspective.
Have your financial section writtenIf your company is younger than three years, the annual financial statements the bank normally bases its judgement on are missing. The business plan replaces the missing track record and is therefore the single most important document of your application.
Smaller applications are decided by your relationship manager; above a certain size, the back office reviews as well: people who do not know you and only see your document. Your relationship manager has to defend the application internally, and the business plan is their most important tool for that.
As for length: 10 to 20 pages of text plus the financial section; the executive summary at most two pages. Write it last.
Upload the financial plan you created with Planvik, and the business plan chapters “Capital Requirements and Financing” and “Financial Plan” are generated from it automatically: finished text with tables and key figures, as a Word file to paste into your business plan.
No upload: everything runs directly in your browser.
Capital requirements and financial plan, fully worded.
And paste it straight into your business plan.
Four samples created automatically from the Planvik financial model:
After the summary, the reviewer goes straight to the financial section; many even start there. The financial section is the most important chapter of your business plan. The text around it provides the reasoning for what the numbers show. The basis is a bank-ready financial plan covering profitability, liquidity and debt service. At the centre of the review is a single calculation: debt service capacity. It answers whether your company can pay interest and principal from ongoing operations on a lasting basis. Banks use a simplified formula for this:
| Net income (plan year) | €60,000 |
| + Depreciation (non-cash) | €25,000 |
| = Cash flow (practitioner formula) | €85,000 |
| − Owner drawings / owner salary | €36,000 |
| − Reserve for replacement investments | €15,000 |
| = Debt service limit | €34,000 |
The exact calculation differs from bank to bank, for example on replacement investments and adjustments. The simplified derivation from net income plus depreciation (practitioner formula) is common, independent of the cash flow statement in your financial plan. For limited companies, the managing director’s salary is already part of personnel expenses; the drawings line applies to sole proprietors and partnerships.
The bank compares your planned debt service, i.e. interest plus repayment per year, with this limit. As a rule of thumb from lending practice, utilisation below 50 percent is considered comfortable; from around 90 percent it becomes critical, because even a small revenue fluctuation endangers repayment. The same question from a different angle is answered by the DSCR, which we explain in detail here.
A checkpoint many underestimate: year three. Many promotional loans start with two repayment-free years. After that, debt service jumps, and the bank looks at exactly this year particularly closely. Your plan has to show that cash flow already carries the load by then.
Open each chapter for the guiding questions your text has to answer, and the point the reviewer looks at.
The complete structure as a free Word template: all 9 chapters with the guiding questions right in the document, so you never face a blank page. Optionally with your logo on the cover; the logo stays on your device.
In practice, chapters 8 and 9 are the biggest hurdle. With Planvik you create your professional financial plan yourself: you answer clear questions, and your individual, bank-ready Excel financial model is built from them.
Create your financial plan nowAccording to the German DIHK founders report, 41 percent of founders have not thought their financing through sufficiently, a third show commercial gaps, and around 32 percent overestimate future revenue. The typical weak points follow from this:
10 to 20 pages of text plus the financial section are sufficient. The executive summary at the beginning takes at most two pages and is written last.
You can get help, but you must be able to explain every number yourself in the bank meeting. Loan officers recognise bought plans quickly, and a plan the applicant barely knows costs credibility immediately.
Considerably more conservatively than your project feels. According to the German DIHK, around 32 percent of founders overestimate their future revenue. A common rule from advisory practice: set first-year revenue 30 to 50 percent below gut feeling and plan a ramp-up phase of 3 to 6 months. Banks read cautious numbers as professional risk assessment.
There are official routes in Germany: with the KfW ERP start-up loan (StartGeld, up to €200,000, up to 5 years after starting business), KfW carries 80 percent of the house bank’s risk. Alternatively, the regional guarantee banks provide default guarantees of up to 80 percent. Both belong actively in your financing chapter.
The bank earns from repayment, an investor from growth. For the bank, years 1 to 3 matter most, with a focus on liquidity and debt service, calculated conservatively and with a thought-through worst case. Growth story, exit and market vision, which convince investors, help little in a loan application.
For established companies, the annual financial statements carry the credit assessment. A business plan or project description is then mainly required for larger investment projects, acquisitions or guarantee applications.
Not as a submission. The canvas is a good tool to sort your business model on one page beforehand, and you can attach it to the appendix. For the credit decision, banks expect the classic business plan with a complete financial section, because only that makes debt service, liquidity and profitability traceable.