A business plan prepared for a BDC financing application should help a reviewer understand what the business does, why financing is needed, how the money will be used and whether the operating plan and cash flow support the request. It should be specific to the company and transaction—not a generic template filled with promotional language.
This guide focuses on building the plan. For product categories, eligibility considerations and application documents, read our Business Development Bank of Canada loan guide. The Biz Plans is independent of BDC and cannot determine eligibility or approval.
Before You Write: Define the Financing Case
Begin with a one-sentence project definition: the amount sought, the intended use, the implementation date and the business result expected. Then check the current BDC product information and application instructions. Product eligibility and documentation vary, and a polished plan cannot fix a request that does not fit the offering.
Create a document register before drafting. Collect incorporation and ownership records, historical statements, interim results, tax and debt information, bank records, supplier quotes, leases, purchase agreements, customer evidence and management resumés that apply to the project. Mark each figure as verified, estimated or still to be confirmed. This discipline prevents the narrative, budget and model from drifting apart.
Recommended Business Plan Structure
Executive Summary
Write this last. In one or two pages, identify the business, its customers, current traction, management, financing request, use of funds and forecast outcome. State the request directly. Avoid slogans, unsupported superlatives and lengthy company history.
Company and Business Model
Describe legal structure, ownership, location, history, products or services, pricing and how the company earns money. Explain the operating stage and material licences or dependencies. For an established business, summarize historical progress and connect the proposed investment to the existing operation.
Project Objectives and Milestones
Translate the financing into an implementation plan. List major purchases, hiring, construction, launch or transition steps; assign responsibility; and provide realistic dates. Milestones let a reviewer see when funds are deployed and when the project can begin contributing to revenue or efficiency.
Operations Plan
Explain facilities, production or service delivery, suppliers, inventory, technology, quality controls, staffing and capacity. Show the present operation and what changes after financing. If a supplier, customer or employee is critical, acknowledge that reliance and describe a contingency.
Write a Precise Funding Request
State how much financing is requested, when it is required and how it fits with owner investment, retained cash or other financing. Do not conceal uncertainty by using a round number with no supporting schedule. Reconcile the request to the sources-and-uses table and financial model.
| Funding source | Use of funds | Evidence |
|---|---|---|
| Owner investment | Deposit or initial project costs | Bank evidence or contribution schedule |
| Requested financing | Equipment, property, acquisition or eligible project costs | Quotes, agreement or detailed budget |
| Operating cash or other financing | Working capital and contingency | Cash records and model assumptions |
Explain the Use of Funds
Itemize equipment, renovations, acquisition consideration, technology, professional costs and working capital as applicable. Explain the commercial reason for each item, timing, tax treatment where relevant to the model and whether the amount comes from a quote or assumption. Do not imply that every cost is eligible; confirm eligible uses with BDC.
Connect spending to activity. A machine purchase, for example, should flow to installation timing, production capacity, labour needs, depreciation, sales capability and cash flow. Working capital should be linked to inventory, receivable and payable cycles rather than described as a general cushion.
Present Management and Market Evidence
Management and Ownership
Give relevant evidence for each leader: industry experience, operating responsibilities, financial oversight and results. Explain ownership percentages, governance and decision-making. If the team lacks a key capability, identify the planned hire or adviser rather than ignoring the gap. For an acquisition, address the seller’s transition and continuity with employees, suppliers and customers.
Target Market and Customers
Define the customer precisely by segment, geography, need and buying behaviour. Distinguish the total market from the realistically serviceable market. Use dated, credible sources, then explain what those facts mean for this company. Customer interviews, contracts, letters of intent, pipeline evidence and historical sales can complement third-party research when accurately described.
Competition and Positioning
Compare relevant competitors or alternatives on factors customers actually use: offering, price, location, speed, specialization, capacity or service. Explain why the company can win without claiming it has no competition. The positioning must be consistent with pricing, marketing costs and forecast share.
Sales and Marketing Plan
Map the path from lead generation to sale. Identify channels, sales roles, conversion rates, sales cycle, repeat purchases and retention. For each forecast revenue stream, state the number of customers or units, average price and timing. Marketing activity that cannot be connected to measurable sales assumptions adds little value.
Build Financial Assumptions and Projections
The forecast should quantify the written plan. Depending on the request, this may include projected income statements, cash-flow forecasts and balance sheets. Established companies should use historical results as the starting point and explain material changes; start-ups should support assumptions with market evidence, capacity and a detailed launch budget.
Revenue Projections
Build sales from operational drivers rather than applying an unexplained growth percentage. Show units, customers, prices, occupancy, billable hours or contracts as appropriate. Reflect seasonality, launch timing, sales capacity and realistic conversion. Separate signed or recurring revenue from pipeline opportunities and management targets.
Expense Projections
Model direct costs consistently with sales and explain gross-margin changes. Include payroll by role and start date, rent, utilities, marketing, insurance, professional fees, maintenance, software, taxes and other operating costs. Document inflation or supplier pricing assumptions. Avoid holding expenses flat while projecting rapid expansion unless capacity supports it.
Capital, Working Capital and Financing
Record capital purchases in the cash-flow forecast and balance sheet rather than treating all spending as an immediate operating expense. Model inventory, receivables and payables using defensible timing assumptions. Show financing proceeds when received and separate interest from principal repayments. Opening cash, assets and debt must reconcile to current records.
Break-Even and Sensitivity Analysis
Calculate the sales level needed to cover fixed and variable costs, while recognizing that accounting break-even differs from cash sufficiency. Test at least one credible downside: slower sales, lower price, margin pressure, higher costs or a delayed opening. Explain management actions available if that case occurs.
For help building integrated statements, see our financial modelling and projection service and financial forecasting resource.
Demonstrate Cash Flow, Repayment Capacity and Risk
Cash flow should show when customers pay, when suppliers and staff are paid, when capital costs occur and when proposed debt payments begin. Identify minimum cash periods and the working-capital buffer. Do not use annual profit as a substitute for monthly cash analysis where timing is important.
Describe repayment capacity using the projections without presenting it as certain. Explain assumptions about loan amount, rate, amortization and payment timing as provisional unless verified in offered terms. If the project depends on refinancing, asset sales or unusually fast growth, make that visible.
Risk Analysis and Mitigation
Prioritize risks that could materially affect cash flow or execution: customer concentration, supplier dependency, permits, construction delays, labour shortages, price pressure, foreign exchange, technology implementation or key-person reliance. For each, state the trigger, potential impact, mitigation owner and practical response. Generic statements that “management will monitor risk” are not enough.
Tailor the Plan to the Business Stage
Start-up Financing Case
A start-up plan must compensate for limited operating history with careful evidence and transparent assumptions. Explain founder experience, customer discovery, pre-launch commitments, required licences, start-up costs and the sequence from financing to opening. Build revenue from achievable capacity and customer acquisition, not only from a broad market-size statistic. Include enough monthly detail to show the cash effect of launch delays and slower early sales.
Established-Business Expansion
Use historical results as the baseline and separate existing operations from the incremental project. Explain current capacity, why the constraint exists, what the investment changes and when added output can be sold. Reconcile interim performance to the latest fiscal statements. If projected growth or margins differ materially from history, quantify the drivers rather than attributing the change generally to expansion.
Business Acquisition
Distinguish the buyer, target and combined business. Address purchase price, financing sources, working capital, transaction costs, ownership, seller involvement and management transition. Analyse customer concentration and normalize unusual historical items carefully. Post-acquisition projections should reflect credible synergies, integration costs and financing payments; do not treat hoped-for savings as certain.
Present the Plan for a Lender Review
Use a clear hierarchy, numbered tables and consistent terminology. Date third-party sources and label management estimates. Put detailed resumés, quotes, research and schedules in appendices, then refer to them from the main text. Check that every amount is identical across the executive summary, funding request, use-of-funds table and projections.
Before submission, ask someone unfamiliar with the company to answer five questions from the document: What is being financed? Why now? Who will execute it? What evidence supports demand? How does cash flow support the plan? If any answer is unclear, revise the plan rather than adding decorative detail.
Common Business-Plan Mistakes to Avoid
- Starting with a template instead of the transaction: structure the plan around the actual decision and document request.
- Using vague funds: reconcile each project cost to a quote, agreement or explicit assumption.
- Forecasting from ambition: link sales to price, volume, capacity, timing and evidence.
- Ignoring historical results: explain why future margins or growth differ from recent performance.
- Confusing profit with cash: include working capital, capital spending, taxes and debt payments.
- Hiding risks: a balanced downside analysis is more credible than claiming the project is risk-free.
- Submitting inconsistent documents: reconcile names, dates, ownership, debt and amounts everywhere.
- Making approval claims: no consultant or plan can guarantee lender eligibility, timing or approval.
Final Business Plan Checklist
- The financing amount and timing are explicit.
- Sources equal uses and evidence supports material costs.
- Management responsibilities and gaps are addressed.
- Market claims are sourced and tied to the sales plan.
- Revenue, cost, staffing and capital assumptions are documented.
- The statements reconcile and include proposed debt service.
- Cash pressure and a reasonable downside case are visible.
- Risks have specific mitigations.
- The plan uses Canadian spelling and consistent terminology.
- Current BDC requirements have been confirmed directly.