What does an SBA business plan have to show your lender?
Repayment from cash flow (the SOP's primary source of repayment), equity and collateral, for your lender's credit memorandum. SBA says SOP 50 10 8.1 applies to applications received by SBA on or after 1 October 2026, so ask your lender which edition governs your file.
| What the Standard 7(a) memorandum must document (Section B, Ch. 1) | What a plan and model have to supply |
|---|
| The business, its history and management depth, and the lender's rationale, including competition | Company, management and market sections |
| Repayment: coverage "must be equal to or greater than 1.15 on a historical and/or projected cash flow basis and 1:1 on a global basis" | An EBITDA bridge with each add-back justified, a complete debt schedule and a global schedule |
| Start-ups, new businesses and other applications based on projections: projections and assumptions that reflect a "debt service coverage equal to or greater than 1.15 within 2 years" from funding or the end of construction | Projections reaching the two-year point, with written assumptions for revenue growth, expense reductions and industry trends |
| A pro forma balance sheet, ratios and working capital adequacy over at least the next 12 months | A pro forma balance sheet at closing, the ratios and a 12-month cash flow |
| Equity, discussed in detail: the lender, or SBA on a non-delegated loan, decides whether "the equity position, any required equity contribution, and the pro forma debt-to-worth are acceptable" | Sources and uses reconciled to total project cost |
| Collateral: an "Assessment of collateral adequacy adjusted in accordance with Appendix 19" | A fixed asset schedule with prior liens |
Scope is set by package: Standard and Premium add the full lender financial model and repayment-ability analysis.
What the numbers cost. On a $600,000 ten-year fully amortizing loan at an assumed 10.0 percent (an arithmetic input, not a rate quote) with no other business debt, annual debt service is 12 x $7,929.04 = $95,148.48: 1.15 needs $109,420.75 of EBITDA, and the 1.25:1 of an Initial Acquisition needs $118,935.60, which is $9,514.85 more and is tested on the acquired business's past results, so we build a purchase plan from the seller's historical financials (SBA loan to buy a business). On a Standard 7(a) or 7(a) Small loan, a start-up injects at least 10 percent of total project costs, not of the loan: $35,000 on a $350,000 project, where 10 percent of the $315,000 loan would be $31,500.
How do revisions work?
Essential includes one revision round; Standard and Premium are unlimited within the agreed scope. A revised sensitivity six weeks later, because an equipment quote changed, is a revision. A new site or loan structure is new work, quoted first.
When is this the wrong thing to buy?
- You have not spoken to a lender yet. Get a bank or CDC to indicate what they would lend first; it changes the document.
- The gap is cash flow or equity. A plan cannot stand in for either. Without reasonable assurance of repayment from cash flow, the Standard 7(a), 7(a) Small and SBA Express credit standards say "the loan request must be declined, regardless of the collateral available or outside sources of repayment". Collateral: see SBA collateral requirements.
- Your lender asked for a feasibility study. Different document, different standard: an independent opinion allowed to conclude the project does not work. See feasibility study services and SBA feasibility study requirements.
- You only need the numbers. If the narrative is written and the bank wants a model it can interrogate, buy a financial model alone.
Raising equity instead? Business plan services and pitch decks. Immigration: visa business plans. Market evidence alone: market research. Writing it yourself: the free business plan template.
SBA requirements we have verified
- Overview. SBA loan requirements, SBA ineligible businesses, does the SBA require a business plan.
- Cash flow and equity. Debt service coverage, equity injection, the 504 equity calculator, SBA loan fees.
- Security. Collateral, personal guarantees, environmental requirements.
- Deal type. Buying a business, franchise loans, 504 loans, special purpose property list, owner occupancy, SBA feasibility study requirements.
- Not an SBA loan. USDA B&I loan requirements, bank loan business plan guide.
How we verified this
Every quotation was checked against raw source text retrieved on 10 and 11 October 2026.
- SBA SOP 50 10 8.1 with Technical Policy Updates, effective 1 October 2026: the Word file on SBA's SOP 50 10 page, last updated 7 October 2026, searched for the words business plan (six occurrences) and for a five-year projection requirement (none).
- SBA Information Notice 5000-882227, published 25 September 2026, for the applications SOP 50 10 8.1 applies to.
- 13 CFR 120.150 (annual edition, current text), which states no coverage ratio and no equity percentage: the coverage floors and the 7(a) start-up 10 percent are SOP policy. 13 CFR 120.910 (annual edition, current text) for the 504 contribution.
- SBA, Write your business plan (sba.gov), retrieved 11 October 2026, for the five-year outlook.
Not verified, so left out: how often lenders ask for a plan, lender floors above the SOP's, approval rates.
