Financial planning
Preparing a business loan application
By Fundability · Updated
A business loan application needs to explain the purpose of borrowing and how the business expects to meet repayments. Prepare consistent records, a cash-flow forecast and supporting assumptions, then check the specific lender’s current requirements. Approval and terms are the lender’s decision.
Explain the purpose and repayment logic
State the amount, use of funds and timing. Connect borrowing to a business activity and explain how cash generation supports repayment. Do not assume that a revenue forecast alone demonstrates repayment capacity.
Use a downside scenario to examine delays, lower receipts and higher costs. Discuss the implications with a qualified adviser if you need help judging affordability, security or personal obligations. This guide provides preparation information, not a borrowing recommendation.
Organise the records the lender requests
Requirements differ by lender, product and company. Use the lender’s checklist as the authority. A well-organised data room or document folder can make preparation easier but does not certify the records.
- Business plan and explanation of borrowing purpose.
- Cash-flow forecast and documented assumptions.
- Historical accounts or management information, where available and requested.
- Company and ownership information requested by the lender.
- Evidence supporting the proposed expenditure and repayment plan.
Reconcile the application with your records
Use consistent periods and definitions across the form, plan and model. Explain unusual or one-off items. Keep actual results separate from forecasts and check that loan repayments are reflected in the cash-flow scenario.
If you are also seeking equity or a grant, explain those assumptions and distinguish committed funding from funding still being discussed. Do not present a possible award as available cash.
Use tools without overstating their role
Fundability’s current document tools can support preparation of a business plan and projections. Additional grant and loan application capabilities are described on the public roadmap as developing, so confirm the current scope before purchasing for that purpose.
Compare the lender’s actual terms and obtain professional advice where needed. A Fundability assessment is not a lending decision, a credit rating or a guarantee of approval.
Frequently asked questions
- Does a good business plan guarantee a loan?
- No. Lenders apply their own criteria and evaluate the circumstances, affordability and terms of the application.
- Is a fundability rating a credit score?
- No. Fundability’s educational assessment of readiness is separate from a lender’s credit assessment and approval process.