How to Write a Business Plan That Gets You Funded in Canada

Do you have a business plan? Many Canadian business owners don’t have one or have one and have heard the same advice over and over again. That advice being that a detailed business plan can help a company get funding. Although this can be true, in reality, lenders aren’t going to fund documents; they fund businesses that can generate and manage revenue, and that’s what your business plan needs to prove. 

Today, Bizfund is using our insider knowledge on writing a business plan for funding in Canada to help you explain your company’s financial story. We’re touching on what different lenders look for, the core sections of a fundable business plan, and the common reasons business plans get rejected. Armed with this information, you should have a better chance at knowing how to write a business plan in Canada on your own. 

What Different Lenders Actually Look For 

Not every lender reads a business plan the same way. For example, banks, government programs, and alternative lenders focus on different parts of your business, so the same plan can be received very differently. Let’s have a look at what we mean:

The Core Sections of a Fundable Business Plan

A comprehensive business plan is never a bad thing in itself, but a lengthy document isn’t going to get you funding just because you’ve included every possible detail you could think of. This is because a business plan for funding in Canada should have a clear purpose. It needs to show lenders how your business makes money and how stable that process will be over the next few months to years. That’s what they want to see. 

So, with this in mind, at a minimum, the core sections of your business plan for funding should include your business model, revenue stream, pricing, and cost structure. It should also explain your customer base and how you plan to reach them. Additionally, and just as importantly, financial projections need to be included, but you need to make sure they are grounded in realistic assumptions. 

However, it’s not as simple as just listing all of this information. You need to connect these pieces, which means explaining how you expect revenue to grow and why. You should also touch on how you will manage costs if they increase. This is where the revenue first approach comes into play for your business plan and could be the best move. With this approach, you start with how money enters the business, then build the rest of the business plan around it. 

Canadian-Specific Small Business Plan Funding 

In Canada, you’ll want to make sure your business plan includes Canada-specific information that proves you understand key guidelines surrounding taxes and the Canadian funding landscape. Even if they don’t say it, lenders expect you to understand these areas, even if you don’t list them as formal sections in your plan, but incorporate them where relevant. 

When it comes to taxes, your plan should show that you understand how GST and HST affect your cash flow. It won’t be enough to include revenue numbers if you don’t account for what you’ll need to remit later. Then, your plan should reflect where funding could realistically come from, especially if you’re asking for capital to buy equipment or open a location, or even hire staff or manage early growth. 

You’ll want to list programs like the Canada Small Business Financing Program or the Business Development Bank of Canada standalone programs in your financing or funding, use of funds, or financial projection assumptions sections. But try to avoid listing programs just to show you did your ‘research’ as that can feel forced. 

Common Reasons Canadian Business Plans Get Rejected

We know it might be hard to believe, but most plans aren’t rejected because they are poorly written but rather because business owners leave key questions unanswered. So, if you don’t want to be grouped among these company heads, you should keep the following in mind: 

1. Revenue is unclear: When an unrealistic business plan fails to show lenders how sales actually occur, lenders struggle to assess risk. So, you want to avoid vague projections without supporting detail as it can weaken your entire application.
2. Expenses are incomplete: Lenders don’t like reviewing business plans with missing or incomplete expenses. So, you don’t want to miss adding in things like payroll, taxes, and inventory. Missing these can create an overinflated view of a company’s profitability. This looks like a red flag to lenders, as it raises concerns.
3. No clear use of funds: Lenders want to know exactly how the money will be used. A general statement about growth is not enough without specifics, so be specific.

When You Don’t Need a Full Business Plan 

We know we have stressed how important it is to write a business plan that gets you funded in Canada, but… not every funding situation requires one. 

For example, if your company already has a solid track record of revenue and you can prove revenue is consistent, lenders may rely more on these financial statements and recent performance, alongside other documentation, than on your business plan. 

This is because, for traditional and alternative lenders, the focus will shift from what you project to what you can actually prove. 

Free Resources for Canadian Business Plan Writers

It’s understandable that when you’re facing writing your own business plan from scratch, you’re hesitant and unsure of what to do. 

Fortunately, with the tips we gave you, you should have a few good pointers and be headed in the right direction. However, if that isn’t enough, Canada has several well-established resources. You can use them to help you structure and hone your business plan template for Canadian financing markets.

If you’re not sure where to start resource-wise, there is the Business Development Bank of Canada. They provide templates and guidance for building financial projections. Then there is also Futurpreneur Canada, which offers mentoring alongside funding support for new businesses. 

In addition, there are also provincial small business development centres you can turn to alongside local economic development offices. These can provide practical feedback. Since many businesses aren’t aware of these resources, they remain underused. Yet, they can significantly improve the quality of your plan and, in turn, your chances of securing financing. 

Key Takeaways for Creating a Business Plan for Funding in Canada

A business plan does not need to be perfect to be effective. It needs to show how your business generates revenue and how that revenue supports the next stage of growth. If you focus on that first, the rest of the plan becomes easier to build. 
And when the time comes to apply for funding, you will be presenting something lenders can actually work with. When you’re ready, check out our merchant cash advances at Bizfund. We offer funding for companies that need an easy, simple, and fast funding solution.