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Obtaining Financing

Commercial lenders, such as banks and finance companies, expect to see a business plan before they will lend money to a business. The same holds true for government lenders. Even when there is sufficient collateral to pledge as security for the loan, a business plan is still likely to be required because it shows where the business is going and how the money will be used.

A business plan will be more important if you’re seeking investment capital. Investors, especially venture capitalists, tend to be more demanding than lenders because their risks are greater. Unless a plan can convince them that financing a business will enable them to earn a substantial return on their investment.