Map Your Business, Make Your Case: Business Plans and What Lenders Look For 

§ November 10th, 2026 § Filed under Uncategorized § No Comments

What Lenders Want to Know

Financial institutions want to answer one question before funding a business loan. Will your business have enough cash to make the loan payment each month? 

Lenders primarily look at the five Cs of Credit:

• Capacity – is there enough money to pay the debt? 
• Credit/Character – what is your history, have you paid bills on time? For a startup (or even an existing business) your personal credit will be considered.
• Capital – what money or equity are you putting into the business? Do you have a cushion for setbacks?
• Collateral – do you have other assets that can help secure the loan? 
• Conditions – how will you use the money, and how does the market outlook affect your ability to repay the loan? 

Lenders also look at your background and experience and whether your numbers are believable, especially in comparison to other businesses in your industry. 

The requirements can vary considerably depending on the lender. In addition to the business and financial plan, most will want personal and business tax returns, a personal financial statement, bank statements, business formation documents, estimates for equipment, furnishings, build out/renovations, and anything else you will need before you launch. Ask for the lender’s checklist early. 

Business Plans: If You Think It, Ink It

As promised, let’s take a look at business plans. 

Do you need one? Yes! A business plan provides a map to get to your goal. Do you need to write it down? Also yes! 

One of my favorite phrases is “If you think it, ink it.” I cannot count the number of great ideas I have had that I didn’t write down, largely because I don’t remember them. Don’t lose out on the idea because you depended on your memory.

Choose the Format for Your Audience 

If the plan is for your own use, make it as long as it needs to be to provide the map. There are certain pieces (signposts, landmarks, etc., if I’m going to stay with that map analogy) that need to be in any business plan, but adjust the detail to fit the purpose.

I’m a big fan of the Lean Canvas, a one-page picture of your business model. Ash Maurya adapted it from Alexander Osterwalder’s Business Model Canvas to focus on the customer’s problem and a possible solution. It encourages you to understand the problem before spending time and money solving it.

That’s why I like it: you can get your basic ideas on paper quickly, identify assumptions to test with customers, and expand the details later. My other major reason is that it is a quick way to get the basic ideas down on paper. Those ideas can then be fleshed out for more substantial business plan formats. 

So at its core, a business plan, no matter who the audience is, needs to identify the problem being solved, the customer, what makes your solution different, the solution (features), key metrics (how you plan to measure success), channels (how you will reach your customers), costs, and revenue streams. If you are doing something that cannot be easily copied or bought elsewhere, that should also be included. 

All those sections should be included in any plan. 

Other Planning Tools

These tools serve different purposes and can work together:

One-page written business plan – primarily for an internal audience, but may be all a financial institution needs if the requested funding is low. 

Traditional business plan – a detailed plan usually needed when presenting to a lender, partner, or investor.

Feasibility study – focused primarily on the market and costs and whether the idea is financially promising before starting.

Pitch deck – short visual presentation that explains the opportunity used for initial partner or investor meetings.

Financial plan – usually part of the traditional business plan, outlining startup costs, ongoing revenue and expenses, and cash flow.

If you are looking for investors or partners, you will likely need a combination of these. 

The SBA’s Traditional Plan Outline

The SBA identifies nine common sections. Use the ones that fit your business and the reader’s requirements:

• Executive summary
• Company description
• Market analysis
• Organization and management
• Service or product line
• Marketing and sales
• Funding request
• Financial projections
• Appendix

The SBDCNet provides a ton of resources for small businesses including business plan templates. Check out the market research links and small business snapshots as well. 

Let AI Help You Get Started

An AI platform can help you organize your ideas, identify gaps, and draft a business plan. Describe your business, customers, experience, and what you know about costs and pricing, then ask it to interview you before writing. Work through one section at a time, checking the facts and financial assumptions as you go. Leave out sensitive personal or customer information, and remember: AI can make invented numbers sound remarkably confident. Use it as a writing partner, not a crystal ball.

Sample prompt: “Help me develop a business plan for my [type of business] in [location]. My target customers are [describe customers], and I offer [products or services]. The plan is for [my own use/a lender/a potential partner]. First, ask me questions one at a time to gather the information you need. Then draft one section at a time in plain language for my review. Do not invent market research or financial figures. Flag missing information, clearly label assumptions, and help me identify what I need to verify.”

Get Help Before You Pay for It

When you write your plan, consider your audience. A financial institution is not looking for marketing copy; it wants to reduce risk. Put across your idea and plan from the recipient’s viewpoint. Explain the business opportunity, acknowledge the risks, and show how you will manage them. 

Before paying someone to write your plan, explore the help available locally. America’s SBDC has a nationwide network.

In San Antonio, the UT San Antonio SBDC provides no-cost business advising and no-cost or low-cost training, with access to international trade and government contracting assistance:

We’re also fortunate to have Launch SA, which offers advising, workshops, and connections to other resources. 

Whatever format you choose, make sure you understand the plan and the numbers. It’s your business, and you’re the one who has to follow the map. As you would on any journey, adjust your route when necessary.  

Finding the Funding

§ November 1st, 2026 § Filed under Uncategorized § No Comments

You’ve done all the pre-work on this business. This is where some Next Act and Accidental Entrepreneurs diverge. If you are a Next Act Entrepreneur who has owned a successful business, you may have a number of advantages such as ongoing revenue from the existing business, savings, connections, and access to partners and investors who bring not only funding but customers. 

I try to discourage anyone from starting unless they have enough savings or other income to cover basic living expenses. Very few businesses can support you for the first six months (or longer). I learned this the hard way. When I started my own business, the only thing that saved me in those early months was turning my previous employer into my first customer. 

Think of Funding as a Ladder

If you have fewer resources, start with the least risky source of money and move up only when you need to.

1. Let customers fund your business. If you are starting a consulting, training, or other low-cost service business, sell something first. Do the work, get paid, and reinvest as much as you can. You may start smaller and grow more slowly than you imagined, but starting without debt is a very good place to be. 

2. Use savings carefully. If you need more to launch, you may have to use personal savings. Decide in advance how much you can safely invest without draining everything. Be especially careful with credit cards. A zero-interest offer can look wonderful until the promotional period ends before the business can pay it off. Plus high utilization rates and personally guaranteed debt can hurt your ability to qualify for other financing. 

3. Ask about a personal loan. A new business has no track record, so in some cases a personal loan may be more realistic. Talk with your bank or credit union. Be clear that the money will be used for a business and make sure the loan terms permit that use. While you’re there, ask what they would require for a future business-loan application. You may hear, ‘We don’t fund startups,’ or you may leave with a useful checklist. 

4. Ask friends and family, but with paperwork. If they are willing to help, put the agreement in writing including the repayment terms. I don’t care if you have been best friends since elementary school or it’s your grandmother. It’s much better to have a written agreement that you both have signed than to avoid family events until you pay them back.  

5. Learn how SBA-guaranteed loans work. The SBA generally does not make business loans directly. Instead, it guarantees a portion of loans made by participating lenders, which can make it easier for some startups to qualify. SBA Microloans are made through nonprofit intermediary lenders. 

6. Be very cautious about putting major personal assets at risk. Home-equity loans and retirement funds may be available in some circumstances, but losing your business is painful enough without also losing your home or retirement security. Get professional financial and tax advice before using either one. 

A Word About Grants

If your plan depends on finding a grant to start the business, rethink the plan. Grants for ordinary startups are exceptionally rare. Federal programs generally focus on specialized areas such as research, technology, manufacturing, exporting, or specific public-policy goals. Private grants and competitions do exist, but treat them as bonuses, not as your funding strategy.

Final Thoughts

Traditional startup thinking:  “How much money can I raise?”

Next Act thinking:  “What’s the smallest amount I can risk to find out whether this business works?”

Later This Month

Rather than pack too much information in one newsletter, I’ll send a second one this month, in addition to the mid-month tip. We’ll look at business plans: when you need one, what it should include, how long it should be, and whether using AI is a good tool for creating it. We’ll also cover what lenders look for in deciding to fund your business.  

Know Your Numbers Before You Open

§ October 1st, 2026 § Filed under Uncategorized § No Comments

You are about to start an “official” business. This month, we dig into the numbers. 

In my 15 years of advising small businesses, I have found that the most frequent mistakes that new and prospective business owners make is underestimating how much it will cost to start up and operate the business from month to month. 

Start With a Simple Rule

The secret to a successful business is simple. Bring in more revenue than you spend. Easy, right? The problem frequently is that new business owners underestimate the startup and ongoing costs. I have had very few who have set their prices too high. There are definitely a large number who overestimate how many sales they will make, however. 

Startup costs are those that you have to spend before you open the doors or sell your first item or service. Ongoing expenses keep the business running after you open. 

It is difficult for a business to turn a profit in the first year. No matter what industry you are in, you will likely need some money (working capital) beyond the startup costs to get you through the first six months to a year. 

Of course, all of these costs vary depending on the business. A home-based business may avoid rent and build-out costs, while some industries require licenses, certifications, equipment, or specialized training.

Use AI to Build a Starting Estimate

AI can help you create a first-pass list of likely startup and operating expenses. Give it specific details such as your location, business size, number of employees, square footage, and anything unusual about your operation. Then ask it to separate ongoing costs into fixed and variable expenses.

·       Fixed expenses: Costs that stay relatively consistent from month to month, such as rent, software subscriptions, and some insurance.

·       Variable expenses: Costs that rise or fall with sales, such as inventory, credit-card fees, commissions, packaging, and shipping.

Here’s a sample prompt for a coffee shop:

“What startup and ongoing expenses are usual for a coffee shop in Northwest San Antonio? Separate ongoing expenses into fixed and variable costs. What are typical sales for a 2,400-square-foot shop? What additional revenue streams could increase sales?”

Replace the coffee-shop details with your own. You may also want to compare responses from more than one AI tool. Treat the results as a starting point, then verify important numbers with vendors, landlords, industry sources, and professionals.

Watch the Timing of Cash Flow

Not every expense arrives monthly. Insurance, licenses, taxes, subscriptions, and other bills may be due quarterly or annually. A business can look profitable on paper and still run short of cash when a large payment comes due.

For example, if you pay a six month premium on your insurance, you need to make sure you will have the cash needed. Budgeting ahead of that payment will make you less likely to have to purchase items on credit or fall behind on monthly expenses. 

Remember: Estimates Are Still Estimates

Understand that these are all estimates. Estimates = Guesses. Research makes the numbers more realistic, but prices, sales, and timing will change. But remember that they are still estimates with validity. Expect them to change over the course of the business.. As you start to open, prices may be significantly higher than you expected. As a result, it’s always a good idea to build a contingency cushion. 

Coming Next Month

Now that you have an idea of how much you need to start and operate the business, where will the money come from? Next month, we’ll talk about sources of startup funding.