Lender-Ready Plan · sample
This is what a founder hands a bank at the end of a Lender-Ready Plan: the ask, where the money goes, three years of projections, whether the business can carry the payment, and every assumption written down.
What this is. A worked sample built for Ridgeline Bike Works, a bike service, retail and rental shop in Montezuma County that does not exist. Every figure is invented to show the format and the arithmetic. No real business, no client.
What a real plan adds. The founder's own figures, a written business plan alongside these tables, and a working spreadsheet the founder and their CPA can change.
| Use | Amount |
|---|---|
| Shop build-out and fixtures | $38,000 |
| Opening inventory (parts and accessories) | $22,000 |
| Rental fleet (14 bikes) | $26,000 |
| Tools and service equipment | $12,000 |
| Working capital reserve | $22,000 |
| Total | $120,000 |
| Source | Amount |
|---|---|
| Bank loan | $95,000 |
| Owner savings | $25,000 |
| Total | $120,000 |
The working capital reserve is the line lenders ask about first. It carries the business through the winter months, shown below.
| Line | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Service and repair | $104,000 | $124,000 | $138,000 |
| Retail parts and accessories | $88,000 | $104,000 | $118,000 |
| Rentals and guided rides | $46,000 | $54,000 | $62,000 |
| Revenue | $238,000 | $282,000 | $318,000 |
| Cost of goods sold | $76,440 | $90,520 | $102,240 |
| Gross profit | $161,560 | $191,480 | $215,760 |
| Gross margin | 67.9% | 67.9% | 67.8% |
| Rent (1,600 sq ft) | $28,800 | $29,664 | $30,554 |
| Wages (1 mechanic, seasonal help) | $50,000 | $64,000 | $72,000 |
| Owner draw | $24,000 | $36,000 | $42,000 |
| Insurance | $6,000 | $6,300 | $6,600 |
| Utilities and software | $7,200 | $7,400 | $7,600 |
| Marketing | $6,000 | $5,000 | $5,000 |
| Accounting and legal | $3,500 | $3,000 | $3,000 |
| Depreciation | $9,500 | $9,500 | $9,500 |
| Operating expenses | $135,000 | $160,864 | $176,254 |
| Loan interest | $9,707 | $9,082 | $8,387 |
| Net income | $16,853 | $21,534 | $31,119 |
Net income is before the owner's personal income tax. The business is assumed to be a single-member LLC taxed as a pass-through, which is a question for the founder's CPA.
Coverage divides the cash the business has left after paying everyone, including the owner, by the year's loan payments. Lenders commonly look for 1.25 or higher. Each lender sets its own threshold.
| Line | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Cash available for debt service | $36,060 | $40,116 | $49,006 |
| Annual loan payments | $15,383 | $15,383 | $15,383 |
| Debt service coverage | 2.34× | 2.61× | 3.19× |
A bike shop in the Four Corners earns most of its year between May and September. 5 months fall below break-even, and the working capital reserve is sized to carry them.
| Month | Revenue | Against break-even |
|---|---|---|
| Jan | $7,140 | ($10,155) |
| Feb | $7,140 | ($10,155) |
| Mar | $14,280 | ($3,015) |
| Apr | $21,420 | $4,125 |
| May | $28,560 | $11,265 |
| Jun | $30,940 | $13,645 |
| Jul | $30,940 | $13,645 |
| Aug | $28,560 | $11,265 |
| Sep | $26,180 | $8,885 |
| Oct | $19,040 | $1,745 |
| Nov | $11,900 | ($5,395) |
| Dec | $11,900 | ($5,395) |
Down from $36,060 at plan.
Below the usual threshold for that year.
Paid from the $22,000 reserve, with $18,443 left.
This is the reason the reserve is in the request rather than left out to make the loan smaller.
We build the plan and the model from the founder's own figures and decisions. The founder's CPA reviews the projections and the tax treatment before anything goes to a lender. Entity, tax and lending decisions stay with the founder's attorney, CPA and lender, and the founder submits the application.