Start with the cash flow, not the narrative
Most people write the story first and add the numbers at the end. Lenders read in the opposite order, and the numbers are what they examine. Writing them first also makes the narrative better, because it forces you to discover what the business actually requires before you start describing it.
The document that decides the outcome is a monthly cash flow forecast covering at least the first twelve months and preferably twenty-four. It must include the loan drawdown, the repayments, your own drawings, VAT payments if you are registered, and the timing gap between invoicing and being paid. What matters most is the lowest point in it — the month where the balance is smallest. If that is negative, the facility you are asking for is either too small or too short, and it is far better to work that out yourself than to have the lender point it out.
Assumptions are what get tested
Every forecast rests on a handful of driving assumptions: how many customers, at what price, at what margin, growing at what rate. Everything else is arithmetic. Lenders concentrate on those few numbers because they know that if the assumptions are wrong, the elegance of the spreadsheet is irrelevant.
So state each one and say where it came from. “Forty covers a day, based on the previous operator’s figures at this address.” “A £680 day rate, matching the rate paid on my last two contracts.” “Conversion at 3%, which is the average for this ad account over the past six months.” Assumptions with a source behind them are assessed. Assumptions without one are discounted, and once one is discounted the reader starts doubting the others.
Show what happens when it goes wrong
The single most effective addition to a loan application, and the one most often left out, is a downside case. Run the forecast again at 20% lower sales, or with costs 10% higher, and show whether the repayment is still covered.
This feels like arguing against yourself. It is the opposite. Lenders know the base case will not happen exactly as written — they have read thousands of forecasts. What they are trying to establish is whether you know it too, and whether the business survives being wrong. An applicant who presents a downside case and explains what they would do about it reads as someone who has thought about risk. An applicant presenting only a rising line reads as someone who has not.
The interview
Most lending processes include a conversation, and for Start Up Loans it is a substantial part of the assessment. The questions are predictable: where does the sales figure come from, what is your gross margin and why, what is the biggest risk, what happens if your main customer leaves, how will you repay if the business closes.
If you built the forecast yourself, these are easy. If someone else built it, they are not, and it shows quickly. This is the practical case for writing your own plan rather than buying one — not the cost, but the fact that you will have to defend every number in it without notes.
Where SquarePlan fits
You enter your sales, costs, drawings and the loan you are seeking. SquarePlan produces the monthly cash flow with the loan drawdown and repayments in it, the profit and loss, the break-even point and the VAT and payroll calculations underneath, then exports the lot as a formatted plan. Because it recalculates as you change assumptions, you can run the downside case in a couple of minutes and put it in the application — which is exactly the thing most applications are missing.