Opting for a business loan is one of the best moves you can make when you are in need of funding and the lenders will only ask you two simple question when you approach them- how much money do you need and how do you intend to pay it back. The answer to both these questions lies in the business plan that you make and there are some common mistakes that first time business loan borrowers end up making. Here are flaws in your business plan you need to fix:

1. Making unrealistic claims about your business: Yes, it is true that you are extremely excited about your new business and it is only natural you would be slightly biased towards it. However, try not to make unrealistic claims in your business plan that your business in the best and it is going to go great places in the next couple of years. Remember that they are the experts and one look at your business profile will tell them all you need to know.

2. Incorrect calculations: Not making the right calculations while presenting the business pitch can affect your plan. If the bank calculates that you only need Rs 5 lakhs for your business but you have asked for Rs 8 lakhs, then your business shows poor calculations and also shows you are not yourself aware of your business needs. Every aspect of your business must match with your financial requirement for approval of the loan.

3. Not considering business rivals: It is hard to expect that you business will gain monopoly of the market as soon as it is launched and that you will face no rivalry. Business rivalry can affect your profits a great degree and you would do well to include that factor in your business plan. It will only show the lender that you have a more realistic approach to your business and will consider your business loan eligibility.

4. Looking to the future: Your business plan must portray a realistic vision regarding where you expect to see your business in the next five or ten years and should create a detailed step by step format leading up to it. This will help the lender gain a clear picture of your business.

5. Bad market research: Remember that the bank comes across multiple business plans each day and they have a clear idea of how the market functions. If your business plan has incomplete or bad market research then they will clearly see through it and know if your business will at all succeed in the future or not. Put all you can in your research to ensure your business will take the right turn when launched.

6. Confusing cash with profits: Having enough cash for your business does not automatically guarantee that you would also have enough profit. Much of the cash would go back again into the business as capital and your profits would have to suffice for your personal needs as well as for the payment of your EMIs, which is also determined by the business loan interest rate. Hence, it is essential that you calculate this amount properly at the very beginning.

7. Incomplete Business Plans: Lastly, you should never submit an incomplete plan. Hire an expert to go through your plan before you submit it to the bank. Make sure there are no ambiguities in your statement and that you are not contradicting yourself anywhere.