business plan for commercial bank

How to Write a Successful Commercial Bank Business Plan (+ Template)

Creating a business plan is essential for any business, but it can be especially helpful for commercial bank businesses that want to improve their strategy or raise funding.

A well-crafted business plan not only outlines the vision for your company but also documents a step-by-step roadmap of how you will accomplish it. To create an effective business plan, you must first understand the components essential to its success.

This article provides an overview of the key elements that every commercial bank business owner should include in their business plan.

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What is a Commercial Bank Business Plan?

A commercial bank business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Commercial Bank Business Plan?

A commercial bank business plan is required for banks and investors. The document is a clear and concise guide to your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Commercial Bank Business Plan

The following are the critical components of a successful commercial bank business plan:

Executive Summary

The executive summary of a commercial bank business plan is a one- to two-page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your commercial bank company
• Provide a summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast, among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started and provide a timeline of milestones your company has achieved.

You may not have a long company history if you are just starting your commercial bank business. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company or been involved in an entrepreneurial venture before starting your commercial bank firm, mention this.

You will also include information about your chosen commercial bank business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is a crucial component of a commercial bank business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the commercial bank industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support your company’s success)?

You should also include sources for your information, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, commercial bank customers may include small businesses, startups, and entrepreneurs.

You can include information about how your customers decide to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or commercial bank services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will differ from competitors and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your commercial bank business may have:

• Proven industry experience
• Extensive knowledge of the market
• Robust and innovative products and services
• Strong financial position
• Excellent customer service

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, or launch a direct mail campaign. Or you may promote your commercial bank business via PR, by being quoted in the media, or by writing articles for industry publications.

Operations Plan

This part of your commercial bank business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, your Operations Plan will outline the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a commercial bank business include reaching $X in sales. Other examples include adding new products, entering new markets, or expanding your distribution channels.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific commercial bank industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here, you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Commercial Bank Firm

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : Everything you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Commercial Bank Firm

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include cash flow from:

• Investments

Below is a sample of a projected cash flow statement for a startup commercial bank business.

Sample Cash Flow Statement for a Startup Commercial Bank Firm

Finally, you will also want to include an appendix section including:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your commercial bank company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

Now that you know how to write a business plan for your commercial bank, you can get started on putting together your own.  

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How to Write a Business Plan to Start a Bank

Feb.29, 2024

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Table of Content

Bank Business Plan Checklist

A bank business plan is a document that describes the bank’s goals, strategies, operations, and financial projections. It communicates the bank’s vision and value proposition to potential investors, regulators, and stakeholders. A SBA business plan should be clear, concise, and realistic. It should also cover all the essential aspects of the bank’s business model.

Here is a checklist of the main sections that you should keep in mind while building a bank business plan:

• Executive summary
• Company description
• Industry analysis
• Competitive analysis
• Service or product list
• Marketing and sales plan
• Operations plan
• Management team
• Funding request
• Financial plan

Sample Business Plan for Bank

The following is a bank business plan template that operates in the USA. This bank business plan example is regarding ABC Bank, and it includes the following sections:

Executive Summary

ABC Bank is a new bank for California’s SMBs and individuals. We offer convenient banking services tailored to our customers’ needs and preferences. We have a large target market with over 500,000 SMBs spending billions on banking services annually. We have the licenses and approvals to operate our bank and raised $20 million in seed funding. We are looking for another $30 million in debt financing.

Our goal is to launch our bank by the end of 2024 and achieve the following objectives in the first five years of operation:

• Acquire 100,000 customers and 10% market share
• Generate $100 million in annual revenue and $20 million in net profit
• Achieve a return on equity (ROE) of 15% and a return on assets (ROA) of 1.5%
• Expand our network to 10 branches and 50 ATMs
• Increase our brand awareness and customer loyalty

Our bank has great potential to succeed and grow in the banking industry. We invite you to read the rest of our microfinance business plan to learn about how to set up a business plan for the bank and how we will achieve our goals.

Industry Analysis

California has one of the biggest and most active banking industries in the US and the world. According to the Federal Deposit Insurance Corp , California has 128 financial institutions, with total assets exceeding $560 billion.

The California banking industry is regulated and supervised by various federal and state authorities. However, they also face several risks and challenges, such as:

• High competition and consolidation
• Increasing regulation and compliance
• Rising customer demand for digital and mobile banking
• Cyberattacks and data breaches
• Environmental and social issues

The banking industry in California is highly competitive and fragmented. According to the FDIC, the top 10 banks and thrifts in California by total deposits as of June 30, 2023, were:

Customer Analysis

We serve SMBs who need local, easy, and cheap banking. We divide our customers into four segments by size, industry, location, and needs: 

SMB Segment 1 – Tech SMBs in big cities of California. These are fast-growing, banking-intensive customers. They account for a fifth of our market share and a third of our revenue and are loyal and referable.

SMB Segment 2 – Entertainment SMBs in California’s entertainment hubs. These are high-profile, banking-heavy customers. They make up a sixth of our market and a fourth of our revenue and are loyal and influential.

SMB Segment 3 – Tourism SMBs in California’s tourist spots. These are seasonal, banking-dependent customers. They represent a quarter of our market and a fifth of our revenue and are loyal and satisfied.

SMB Segment 4 – Other SMBs in various regions of California. These are slow-growing, banking-light customers. They constitute two-fifths of our market and a quarter of our revenue and are loyal and stable.

Competitive Analysis

We compete with other banks and financial institutions that offer similar or substitute products and services to our target customers in our target market. We group our competitors into four categories based on their size and scope: 

1. National Banks

• Key Players – Bank of America, Wells Fargo, JPMorgan Chase, Citibank, U.S. Bank
• Strengths – Large customer base, strong brand, extensive branch/ATM network, innovation, robust operations, solid financial performance
• Weaknesses – High competition, regulatory costs, low customer satisfaction, high attrition
• Strategies – Maintain dominance through customer acquisition/retention, revenue growth, efficiency

2. Regional Banks

• Key Players – MUFG Union Bank, Bank of the West, First Republic Bank, Silicon Valley Bank, East West Bank
• Strengths – Loyal customer base, brand recognition, convenient branch/ATM network, flexible operations
• Weaknesses – Moderate competition, regulatory costs, customer attrition
• Strategies – Grow market presence through customer acquisition/retention, revenue optimization, efficiency

3. Community Banks

• Key Players – Mechanics Bank, Bank of Marin, Pacific Premier Bank, Tri Counties Bank, Luther Burbank Savings
• Strengths – Small loyal customer base, reputation, convenient branches, ability to adapt
• Weaknesses – Low innovation and technology adoption
• Strategies – Maintain niche identity through customer loyalty, revenue optimization, efficiency

4. Online Banks

• Key Players – Ally Bank, Capital One 360, Discover Bank, Chime Bank, Varo Bank
• Strengths – Large growing customer base, strong brand, no branches, lean operations, high efficiency
• Weaknesses – High competition, regulatory costs, low customer satisfaction and trust, high attrition
• Strategies – Disrupt the industry by acquiring/retaining customers, optimizing revenue, improving efficiency

Market Research

Our market research shows that:

• California has a large, competitive, growing banking market with 128 banks and $560 billion in assets.
• Our target customers are the SMBs in California, which is 99.8% of the businesses and employ 7.2-7.4 million employees.
• Our main competitors are national and regional banks in California that offer similar banking products and services.

We conclude that:

• Based on the information provided in our loan officer business plan , there is a promising business opportunity for us to venture into and establish a presence in the banking market in California.
• We should focus on the SMBs in California, as they have various unmet banking needs, preferences, behavior, and a high potential for growth and profitability.

Operations Plan

Our operational structure and processes form the basis of our operations plan, and they are as follows:

• Location and Layout – We have a network of 10 branches and 50 ATMs across our target area in California. We strategically place our branches and ATMs in convenient and high-traffic locations.
• Equipment and Technology – We use modern equipment and technology to provide our products and services. We have computers and software for banking functions; security systems to protect branches and ATMs; communication systems to communicate with customers and staff; inventory and supplies to operate branches and ATMs.
• Suppliers and Vendors – We work with reliable suppliers and vendors that provide our inventory and supplies like cash, cards, paper, etc. We have supplier management systems to evaluate performance.
• Staff and Management – Our branches have staff like branch managers, customer service representatives, tellers, and ATM technicians with suitable qualifications and experience.
• Policies and Procedures – We have policies for customer service, cash handling, card handling, and paper handling to ensure quality, minimize losses, and comply with regulations. We use various tools and systems to implement these policies.

Management Team

The following individuals make up our management team:

• Earl Yao, CEO and Founder – Earl is responsible for establishing and guiding the bank’s vision, mission, strategy, and overall operations. He brings with him over 20 years of banking experience.
• Paula Wells, CFO and Co-Founder – Paula oversees financial planning, reporting, analysis, compliance, and risk management.
• Mark Hans, CTO – Mark leads our technology strategy, infrastructure, innovation, and digital transformation.
• Emma Smith, CMO – Emma is responsible for designing and implementing our marketing strategy and campaigns.
• David O’kane, COO – David manages the daily operations and processes of the bank ensuring our products and services meet the highest standards of quality and efficiency.

Financial Projections

Our assumptions and drivers form the basis of our financial projections, which are as follows:

Assumptions: We have made the following assumptions for our collection agency business plan :

• Start with 10 branches, 50 ATMs in January 2024
• Grow branches and ATMs 10% annually
• 10,000 customers per branch, 2,000 per ATM
• 5% average loan rate, 2% average deposit rate
• 80% average loan-to-deposit ratio
• $10 average fee per customer monthly
• $100,000 average operating expense per branch monthly
• $10,000 average operating expense per ATM monthly
• 25% average tax rate

Our financial projections are as per our:

• Projected Income Statement
• Projected Cash Flow Statement
• Projected Balance Sheet
• Projected Financial Ratios and Indicators

Select the Legal Framework for Your Bank

Our legal structure and requirements form the basis of our legal framework, which are as follows:

Legal Structure and Entity – We have chosen to incorporate our bank as a limited liability company (LLC) under the laws of California.

Members – We have two members who own and control our bank: Earl Yao and Paula Wells, the founders and co-founders of our bank.

Manager – We have appointed Mark Hans as our manager who oversees our bank’s day-to-day operations and activities.

Name – We have registered our bank’s name as ABC Bank LLC with the California Secretary of State. We have also obtained a trademark registration for our name and logo.

Registered Agent – We have designated XYZ Registered Agent Services LLC as our registered agent authorized to receive and handle legal notices and documents on behalf of our bank.

Licenses and Approvals – We have obtained the necessary licenses and approvals to operate our bank in California, including:

• Federal Deposit Insurance Corporation (FDIC) Insurance
• Federal Reserve System Membership
• California Department of Financial Protection and Innovation (DFPI) License
• Business License
• Employer Identification Number (EIN)
• Zoning and Building Permits

Legal Documents and Agreements – We have prepared and signed the necessary legal documents and agreements to form and operate our bank, including:

• Certificate of Formation
• Operating Agreement
• Membership Agreement
• Loan Agreement
• Card Agreement
• Paper Agreement

Keys to Success

We analyze our market, customers, competitors, and industry to determine our keys to success. We have identified the following keys to success for our bank.

Customer Satisfaction

Customer satisfaction is vital for any business, especially a bank relying on loyalty and referrals. It is the degree customers are happy with our products, services, and interactions. It is influenced by:

• Product and service quality – High-quality products and services that meet customer needs and preferences
• Customer service quality – Friendly, professional, and helpful customer service across channels
• Customer experience quality – Convenient, reliable, and secure customer access and transactions

We will measure satisfaction with surveys, feedback, mystery shopping, and net promoter scores. Our goal is a net promoter score of at least 8.

Operational Efficiency

Efficiency is key in a regulated, competitive environment. It is using resources and processes effectively to achieve goals and objectives. It is influenced by:

• Resource optimization – Effective and efficient use and control of capital, staff, and technology
• Process improvement – Streamlined, standardized processes measured for performance
• Performance management – Managing financial, operational, customer, and stakeholder performance

We will measure efficiency with KPIs, metrics, dashboards, and operational efficiency ratios. Our goal is an operational efficiency ratio below 50%.

Partner with OGSCapital for Your Bank Business Plan Success

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Highly Efficient Service! I am incredibly happy with the outcome; Alex and his team are highly efficient professionals with a diverse bank of knowledge.

Are you looking to hire business plan writers to start a bank business plan? At OGSCapital, we can help you create a customized and high-quality bank development business plan to meet your goals and exceed your expectations.

We have a team of senior business plan experts with extensive experience and expertise in various industries and markets. We will conduct thorough market research, develop a unique value proposition, design a compelling financial model, and craft a persuasive pitch deck for your business plan. We will also offer you strategic advice, guidance, and access to a network of investors and other crucial contacts.

We are not just a business plan writing service. We are a partner and a mentor who will support you throughout your entrepreneurial journey. We will help you achieve your business goals with smart solutions and professional advice. Contact us today and let us help you turn your business idea into a reality.

Frequently Asked Questions

How do I start a small bank business?

To start a small bank business in the US, you need to raise enough capital, understand how to make a business plan for the bank, apply for a federal or state charter, register your bank for taxes, open a business bank account, set up accounting, get the necessary permits and licenses, get bank insurance, define your brand, create your website, and set up your phone system.

Are banks profitable businesses?

Yes, banks are profitable businesses in the US. They earn money through interest on loans and fees for other services. The commercial banking industry in the US has grown 5.6% per year on average between 2018 and 2023.

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Bank Business Plan Template

Written by Dave Lavinsky

Bank Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their banks.

If you’re unfamiliar with creating a bank business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a bank business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Bank Business Plan?

A business plan provides a snapshot of your bank as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for Your Bank Business

If you’re looking to start a bank or grow your existing bank, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your bank to improve your chances of success. Your bank business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Banks

With regards to funding, the main sources of funding for a bank are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for banks.  

Finish Your Business Plan Today!

How to write a business plan for a bank.

If you want to start a bank or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your bank business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of bank you are running and the status. For example, are you a startup, do you have a bank that you would like to grow, or are you operating a chain of banks?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the bank industry.
• Discuss the type of bank you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of bank you are operating.

For example, you might specialize in one of the following types of banks:

• Commercial bank : this type of bank tends to concentrate on supporting businesses. Both large corporations and small businesses can turn to commercial banks if they need to open a checking or savings account, borrow money, obtain access to credit or transfer funds to companies in foreign markets.
• Credit union: this type of bank operates much like a traditional bank (issues loans, provides checking and savings accounts, etc.) but banks are for-profit whereas credit unions are not. Credit unions fall under the direction of their own members. They tend to serve people affiliated with a particular group, such as people living in the same area, low-income members of a community or armed service members. They also tend to charge lower fees and offer lower loan rates.
• Retail bank: retail banks can be traditional, brick-and-mortar brands that customers can access in-person, online, or through their mobile phones. They also offer general public financial products and services such as bank accounts, loans, credit cards, and insurance.
• Investment bank: this type of bank manages the trading of stocks, bonds, and other securities between companies and investors. They also advise individuals and corporations who need financial guidance, reorganize companies through mergers and acquisitions, manage investment portfolios or raise money for certain businesses and the federal government.

In addition to explaining the type of bank you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients served, the number of clients with positive reviews, reaching X number of clients served, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the bank industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the bank industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your bank business plan:

• How big is the bank industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your bank? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your bank business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, small businesses, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of bank you operate. Clearly, corporations would respond to different marketing promotions than individuals, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other banks.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes trust accounts, investment companies, or the stock market. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of bank are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide loans and retirement savings accounts?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a bank business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of bank company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide savings accounts, auto loans, mortgage loans, or financial advice?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your bank. Document where your company is situated and mention how the site will impact your success. For example, is your bank located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your bank marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your bank, including reconciling accounts, customer service, accounting, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign up your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your bank to a new city.  

Management Team

To demonstrate your bank’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing banks. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a bank or successfully running a small financial advisory firm.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you see 5 clients per day, and/or offer sign up bonuses? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your bank, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a bank:

• Cost of furniture and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your bank location lease or a list of accounts and loans you plan to offer.  

Writing a business plan for your bank is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the bank industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful bank.  

Bank Business Plan Template FAQs

What is the easiest way to complete my bank business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your bank business plan.

How Do You Start a Bank Business?

Starting a bank business is easy with these 14 steps:

• Choose the Name for Your Bank Business
• Create Your Bank Business Plan
• Choose the Legal Structure for Your Bank Business
• Secure Startup Funding for Your Bank Business (If Needed)
• Secure a Location for Your Business
• Register Your Bank Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Bank Business
• Buy or Lease the Right Bank Business Equipment
• Develop Your Bank Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Bank Business
• Open for Business

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Other Helpful Business Plan Articles & Templates

12 Steps to Starting a Successful Commercial Bank Business

By henry sheykin, resources on commercial bank.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

As the financial industry continues to expand, with a projected growth rate of 4.7% annually through 2028, there's never been a better time to enter the market with a new commercial bank. This guide outlines how to start a bank business , focusing on the strategic launch of "Luminous Bank", a modern commercial banking startup poised to redefine financial services with its headquarters in New York City. From securing crucial banking licenses to executing a targeted bank customer acquisition campaign , each step is detailed to provide potential bank founders with a clear pathway to success.

• Develop business plan.
• Ensure regulatory compliance.
• Secure funding.
• Establish tech infrastructure.
• Hire essential staff.
• Implement marketing strategy.
• Prepare business location.
• Form partnerships.
• Finalize launch strategy.

9-Steps To Start a Business

Before embarking on the journey to open a commercial bank like Luminous Bank, it's essential to thoroughly prepare and strategize. This involves understanding the regulatory landscape, securing adequate funding, and establishing a comprehensive business framework. Below is a detailed checklist that outlines the critical steps required to launch a successful commercial bank.

Business Plan Creation

Developing a comprehensive business plan for a Commercial Bank, specifically for the startup Luminous Bank, requires meticulous attention to detail and an expansive approach. This document is indispensable as it not only guides the operational setup and strategic direction of the bank but also plays a vital role in persuading potential investors and stakeholders of the bank's viability and potential for success.

Starting with an executive summary that encapsulates the bank's mission to revolutionize the banking experience through personalized services and advanced technology, the business plan must clearly define the bank’s short-term and long-term objectives. It should include a thorough market analysis , identifying target demographics, customer needs, and how Luminous Bank will meet these needs more effectively than its competitors.

An exploration of the competitive landscape is crucial. This will document key players in the banking sector, particularly in New York, and differentiate potential opportunities for Luminous Bank. The plan must detail the products and services intended for launch, supported by robust financial forecasts including projected revenues, profit margins, and a break-even analysis to underscore financial planning.

Essential Tips for Crafting a Robust Business Plan

• Focus on unique selling points (USPs) of Luminous Bank that would attract both individuals and businesses, emphasizing convenience, security, and innovation in banking products and services.
• Include clear, actionable strategies for risk management and regulatory compliance, particularly considering banking startup regulatory requirements and FDIC compliance for new banks .
• Prepare a detailed marketing strategy that outlines the commercial bank marketing strategies intended to propel the bank’s visibility and customer acquisition at launch.

The business plan should elaborate on the operational strategy, focusing on the development of bank technology infrastructure and the implementation of secure banking platforms to ensure reliability and security for customers’ financial transactions. Furthermore, the blueprint will highlight the organizational structure, from the executive level down to support staff, ensuring that roles and responsibilities are clearly delineated to facilitate a smooth operation.

This document will serve not only as a foundational blueprint guiding Luminous Bank toward its operational launch but also as a critical communication tool for engaging with entities essential to the bank’s growth, such as venture capitalists for bank funding and partners within the banking sector.

Overall, a well-crafted business plan is a beacon that guides the setup and sustains the growth phases of a Commercial Bank, aligning all stakeholders to a unified vision and operational strategy.

Regulatory Compliance

Navigating the complex landscape of banking regulations is a foundational step in launching Luminous Bank . This involves meticulous adherence to both federal and state regulations. For a Commercial Bank starting in New York, obtaining the necessary banking licenses from the Federal Reserve and the FDIC is imperative. Additionally, coordination with New York State banking authorities ensures that all regulatory bases are covered.

Ensuring compliance goes beyond mere acquisition of licenses; it encompasses a thorough understanding of and adherence to the banking regulations set forth by these bodies. This ensures that the bank operates legally and upholds the highest standards of security and reliability. Notably, regulations cover a wide range of operations from customer privacy and data security to anti-money laundering protocols.

Comprehensive compliance sets the groundwork for secure and trustworthy banking operations, enabling Luminous Bank to build robust relationships with clients and stakeholders while navigating the banking industry's competitive landscape.

Key Tips for Efficient Regulatory Compliance

• Engage with experienced banking compliance consultants early in the planning process to ensure all regulatory requirements are clearly understood and integrated into the business model.
• Invest in scalable banking technology solutions that are designed to comply with current regulatory standards and are adaptable to future changes in the banking regulations.
• Regularly train staff on compliance matters to mitigate risks and ensure they are familiar with the complexities of banking laws and regulations.

Attaining and maintaining regulatory compliance is not merely about legal necessity; it is crucial in securing the trust of potential clients and partners. This strategic step supports the long-term viability and ethical standing of Luminous Bank in the financial market. Every component, from banking licenses to detailed compliance strategies, plays a significant role in crafting a secure and competitive commercial banking startup.

Capital Acquisition

To effectively launch Luminous Bank, securing the required $10 million in funding is essential. This financial foundation will support startup costs, initial operations, and robust marketing campaigns. Capital can be raised through a combination of venture capitalists, angel investors, or traditional bank loans, each offering distinct advantages and challenges.

Engaging venture capitalists might be a strategic option as they provide not only capital but also valuable business expertise and networking opportunities that can propel a new bank forward. However, they typically seek significant control or higher returns on their investment, which might influence the bank's strategic direction.

Angel investors are another avenue. These individuals provide capital for startups, usually in exchange for convertible debt or ownership equity. They can be more flexible than venture capitalists and may bring personal experience and contacts to the table, though they might offer less capital than venture capitalists.

Alternatively, securing a bank loan could be considered more traditional but requires demonstrating a sound business plan and potential for profitability to lenders. This method might involve less surrendering of equity but comes with the responsibility of regular repayments with interest.

Key Tips for Successful Capital Acquisition

• Prepare a detailed and compelling business plan that highlights market potential, competitive advantage, and financial projections to convince investors of the viability and profitability of the commercial bank.
• Build a strong management team with experienced banking professionals; this increases credibility and investor confidence during the capital acquisition phase.
• Consider a mix of funding sources to balance control and financial risk, optimizing the commercial bank's strategic flexibility and financial stability.

In conclusion, securing the necessary funding is a critical step in the journey to launching a successful commercial bank. By carefully considering the source of capital and approaching the right investors with a well-planned strategy, Luminous Bank can establish a strong financial base to support its ambitious goals.

Technology Infrastructure

Establishing a robust technology infrastructure is a critical foundation for any aspiring commercial bank. At Luminous Bank, we prioritize the integration of advanced banking technology solutions to ensure we offer secure, reliable, and user-friendly services to our customers. Key components involve developing comprehensive online and mobile banking platforms that not only meet but exceed current security standards and user expectations.

Partnering with leading online banking technology providers enables Luminous Bank to equip itself with scalable and secure banking platforms. These technological partnerships are essential in crafting an infrastructure that supports not only day-to-day banking operations but also innovative banking services tailored to the needs of modern consumers and businesses.

Effective Strategies for Building a Commercial Bank's Technology Infrastructure

• Choose Scalable Solutions: Opt for technology that can grow with your bank, accommodating increased customer numbers and more complex operations without degrading performance or security.
• Emphasize Security: Invest in top-tier security technologies to safeguard customer data against cyber threats, thus enhancing trust and compliance with global banking standards.
• Focus on User Experience: Ensure that the interfaces of your online and mobile platforms are intuitive and customer-centric, facilitating a seamless banking experience that can attract and retain users.

The establishment of a strong technology infrastructure serves not only to streamline operations but also positions a commercial bank as a forward-thinking institution ready to tackle the challenges of a dynamic financial landscape. Luminous Bank's commitment to top-grade banking technology solutions underscores our dedication to operational excellence and customer satisfaction.

Hiring Key Staff

The foundation of any successful Commercial Bank hinges on the strength and expertise of its team. For Luminous Bank, assembling a cadre of seasoned professionals is not just a step but a strategic imperative. Key positions such as the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) need leaders who not only understand the banking industry competitive landscape but are also visionaries in financial market trends. Compliance officers are equally crucial, ensuring that all operations adhere to banking startup regulatory requirements such as those set by the FDIC.

Essential Tips for Recruiting Top Banking Talent

• Utilize industry-specific recruiting firms renowned for their network and deep understanding of the financial sector.
• Emphasize the innovative culture and growth potential of starting with a new Commercial Bank, appealing to top-tier candidates seeking impactful careers.
• Offer competitive packages that include not just salaries but also incentives and benefits aligned with roles in high-stakes banking environments.

Customer service representatives form the front line of any bank and are pivotal for bank customer acquisition campaigns and retention. Their hiring process should focus on individuals with strong interpersonal skills and a grasp of secure banking platforms , essential for day-to-day operations and enhancing customer satisfaction.

In summary, the recruitment strategy for Luminous Bank should emphasize not only the experience and qualifications necessary for high-level decision-making and compliance adherence but also the soft skills crucial in fostering strong customer relations and operational excellence. This balanced approach in hiring will equip Luminous Bank with a resilient and responsive team ready to meet the challenges of the modern financial landscape.

Marketing And Branding

In the competitive landscape of commercial banking, establishing a robust marketing and branding strategy is paramount for Luminous Bank. The primary goal is to carve out a unique market position that highlights the personalized service, technological innovation, and security we offer. To achieve this, a multi-faceted marketing plan will be developed, focusing not only on traditional media but also on digital platforms to optimize customer reach and engagement.

Key components of the strategy include the development of a strong brand identity. This involves creating a memorable logo, an impactful tagline, and a cohesive visual style that resonates with both individual and business clients. Consistency across all marketing materials underpins the brand's credibility and helps in establishing a trustworthy presence.

Promotional strategies will be tailored to highlight the benefits of choosing Luminous Bank. Initial launch promotions may include offering zero fees on new accounts for the first six months or competitive interest rates on savings accounts. These offers not only attract attention but also provide a direct incentive for potential customers to engage with the bank.

Effective customer acquisition campaigns will be crucial. Utilizing online marketing tools such as targeted ads, SEO, and social media platforms can drive significant traffic and conversions. Moreover, partnerships with fintech firms could provide innovative solutions that entice tech-savvy customers and disrupt normal banking experiences.

Essential Tips for Successful Bank Marketing

• Segment your market : Understand the different needs of your target demographics. Tailored messaging can dramatically increase the effectiveness of marketing campaigns.
• Leverage data analytics : Use data-driven insights to refine marketing strategies and improve customer engagement metrics. This will help in optimizing the allocation of marketing resources for better ROI.
• Focus on customer experience : Ensure that all marketing communications clearly convey the bank's commitment to convenience, security, and personalized service. A satisfied customer is often a repeat customer and a source of valuable referrals.

For Luminous Bank, distinguishing itself in a burgeoning field of established players and new entrants will require a targeted approach that intertwines innovative banking solutions with strategic marketing tactics. The comprehensive marketing and branding initiative will not only pave the way for immediate customer engagement but will also set the foundation for long-term sustainability and growth in the commercial banking sector.

Location Setup

Establishing the headquarters for Luminous Bank in New York City is a strategic decision aimed at leveraging the dense financial ecosystem of this global finance hub. The headquarters will not only serve as the nerve center for all operations but will also symbolically situate Luminous Bank within the competitive landscape of major commercial banks.

To ensure optimal accessibility and convenience for both employees and clients, selecting a location with robust transport links is crucial. Proximity to major transportation hubs, such as subway stations and bus routes, enhances client interactions and staff commutes. Equally important is the security feature of the location — a vital component in the banking industry that instills trust and safeguards the interests of stakeholders.

Planning the layout of the physical branch offices involves thorough considerations not only about aesthetics but also about functionality. Each branch should reflect the bank’s commitment to modernity and customer service. It includes everything from the ergonomic setup of the workspaces to the technological equipment that facilitates efficient banking transactions.

In addition to the static features, dynamic elements like customer flow management must be well-designed to create a favorable first impression and an enduring user experience. The design should intuitively guide the customer to various sections of the branch, minimizing wait times and enhancing service efficiency.

Key Tips for Efficient Branch Office Setup

• Engage with an experienced commercial real estate agent who specializes in corporate properties to find locations that align with strategic business goals and customer accessibility.
• Invest in state-of-the-art security systems , including surveillance cameras, biometric scanners, and secure vaults, to ensure the safety of both clients and assets.
• Implement eco-friendly designs and materials to resonate with modern consumers’ preferences for sustainability, thereby enhancing corporate responsibility and brand image.

Every aspect from the conceptualization to the realization of Luminous Bank’s physical locations must mirror the ethos of innovation, security, and customer-centricity that Luminous Bank stands for. Moreover, ensure these spaces are compliant with all regulatory requirements including FDIC compliance and Americans with Disabilities Act (ADA) standards to provide an inclusive environment.

Partnerships And Alliances

Securing robust partnerships and alliances is critical to the successful establishment and growth of a Commercial Bank. By forging strategic relationships with financial institutions, fintech companies, and other relevant stakeholders, Luminous Bank can leverage these partnerships to gain significant technological advantages, expand customer reach, and enhance service offerings.

Collaboration with financial institutions not only broadens the horizon for diverse financial products and greater financial stability but also enhances the bank's credibility. Engaging with seasoned players in the banking sector provides access to mentorship, crucial banking insights, and improved risk management practices.

Integrating fintech partnerships into our operations stands as a cornerstone for innovation. These collaborations will enable Luminous Bank to implement state-of-the-art banking technology solutions. From secure banking platforms that guarantee customer data safety to advanced algorithms that improve credit assessment, the technological uplift from these partnerships is indispensable.

Moreover, working alongside non-financial companies can broaden the scope of services Luminous Bank offers, making the bank a versatile entity in the financial market. These relationships might pave the way for unique products tailored to the changing needs of consumers, thereby distinguishing Luminous Bank in a competitive commercial banking startup landscape.

Key Tips for Effective Banking Partnerships

• Conduct thorough financial market analysis to identify potential partners whose vision aligns with that of Luminous Bank.
• Engage legal experts to ensure all collaborations comply with banking startup regulatory requirements and other legal obligations.
• Consider partnerships with online banking technology providers to enhance the digital experience for users, focusing on ease of access and transaction security.

The strategic alliances formed by a commercial bank should be dynamic and adaptable to technological advancements and evolving consumer needs. These partnerships are not simply beneficial; they are essential for a successful launch and the long-term sustainability of the bank in a rapidly evolving financial sector.

Launch Plan

Executing a successful launch for a Commercial Bank like Luminous Bank is a complex, yet exhilarating challenge that involves multi-faceted promotional activities and careful strategic planning. The initial phase focuses on organizing a memorable launch event that not only introduces Luminous Bank to the market but also solidifies its brand presence among potential clients and stakeholders.

Key elements of the launch include an invitation-only event that targets industry influencers, potential large-scale customers, and media personnel. This event should serve as both an introduction to Luminous Bank's innovative banking solutions and a showcase of its commitment to technological advancement and customer service. Strong emphasis will be placed on how Luminous Bank stands out from traditional banking institutions, particularly through its digital platforms and personalized service offerings.

Following the high-profile launch, a series of targeted promotional activities should be rolled out. These are designed to attract early adopters and build a robust initial customer base. Strategies such as introductory offers, partnerships with local businesses, and community-focused financial literacy workshops will be essential. Additionally, a digital marketing campaign leveraging social media, email newsletters, and online banking forums will help in maintaining momentum post-launch.

• Expand advertising efforts to encompass both traditional and digital media.
• Use customer feedback from early adopters to refine service offerings.
• Initiate a referral program to increase word-of-mouth marketing.

The phased roll-out to other major cities will depend heavily on the analysis of operational performance and customer feedback from the initial launch in New York City. Metrics such as customer acquisition rates, service uptake, and satisfaction scores will guide the expansion strategy. Adjustments will be made to ensure that as the bank scales, it continues to meet the expectations of a diverse client base while maintaining regulatory compliance and operational excellence.

Insights for a Successful Bank Launch

• Engage local communities through sponsoring events and charitable activities to build brand affinity.
• Align with tech partners to ensure your banking technology solutions are robust and appealing to tech-savvy customers.
• Monitor real-time feedback during the initial launch phase to swiftly address any operational hiccups.

Overall, the launch plan for Luminous Bank should be as dynamic and forward-thinking as the banking services it aims to provide. By blending innovative marketing strategies with meticulous operational planning, Luminous Bank will not just launch, but will soar, setting a new standard in commercial banking.

Launching Luminous Bank encompasses careful planning and strategic execution across multiple domains—from securing funding and ensuring regulatory compliance to implementing cutting-edge technology and hiring top-notch staff. With a robust foundation and a clear roadmap, Luminous Bank is poised to offer unparalleled banking services, aiming to become a benchmark of customer satisfaction and financial success in the competitive banking landscape of the United States.

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How to get started creating your business plan, a successful business plan can help you focus your goals and take actionable steps toward achieving them. here’s what to consider as you develop your plan..

Regardless of whether or not you’re pitching to investors and lenders, starting a business requires a plan. A business plan gives you direction, helps you qualify your ideas and clarifies the path you intend to take toward your goal.

Four important reasons to write a business plan:

• Decision-making:  Business plans help you eliminate any gray area by writing specific information down in black and white. Making tough decisions is often one of the hardest and most useful parts of writing a business plan. 
• A reality check:  The first real challenge after deciding to launch a new venture may be writing the business plan. Through the process, you may realize your business idea is a bit flawed or not yet fully developed. This may feel like extra work, but the effort you put into improving your idea during this step can bolster your chance of future success. 
• New ideas: Discovering new ideas, different approaches and fresh perspectives are invaluable parts of the business planning process. Working closely with your concept can lead to unexpected insights, shifting your business in the right direction. 
• Developing an action plan: Your business plan is a tool that will help you outline action items, next steps and future activities. This living, breathing document shows where you are and where you want to be, with the framework you need to get there.

Business plan guide: How to get started

Use this exercise to gather some of the most important information. When you're ready to put an outline together, follow our standard business plan template (PDF) and use this business plan example to use as a guide as you fill in your outline. Once your outline is finalized, you can share it with business partners, investors or banks as a tool to promote your concept.

• Vision: Your vision statement sets the stage for everything you hope your business will accomplish going forward. Let yourself dream, pinpointing the ideas that will keep you inspired and motivated when you hit a bump in the road. 
• Mission: A mission statement clarifies the purpose of your business and guides your plan, ultimately answering the question, "Why do you exist?" 
• Objectives: Use your business objectives to define your goals and priorities. What are you going to accomplish with your business, and in what timeframe? These touchstones will drive your actions and help you stay focused. 
• Strategies: Your objectives describe what you’re going to do, while your strategies describe how you’re going to do it. Consider your goals here, and identify the different ways you’ll work to reach them. 
• Startup capital: Determine what your startup expenses will be. Having a clear idea will allow you to figure out where the money is coming from and help you spend what you have in the right areas. 
• Monthly expenses: What do you estimate your business’ ongoing monthly expenses will be? This may change significantly over time — consider what your expenditure could be immediately after launch, in three months, in six months and in one year. 
• Monthly income: In order to cover your expenses (and hopefully make a profit), you will need to estimate your income. What are your revenue streams? It's always wise to diversify your income. That way, you won’t be tied to one stream that might not be lucrative as quickly as you need it to be. 
• Goal-setting and creating an action plan: Once you have all the specifics outlined, it's time to set up the step-by-step action items explained in the companion guide, a standard business plan outline. This process will utilize the hard work you've already done, breaking each step down in a way that you can follow.   

A business plan isn’t necessarily a static document that you create once and then forget about. You can use it as a powerful tool by referencing it to adjust your priorities, stay on track and keep your goals in sight.

Business plan: An outline

Use this exercise to gather important information about your business.

Answer these questions to start your planning process. Your responses will provide important information about your business, which you can use as an overview to develop your plan further.

• What is your dream? 
• What do you feel inspired to do or create?
• What keeps you motivated, even in the face of uncertainty?  
• Why does this business exist? 
• What purpose(s) or need(s) does it fulfill for customers?   

Objectives 

• List the goals of your company, then number them in order of importance. 
• What will the business accomplish when it’s fully established and successful? 
• How much time will it take to reach this point?  
• For each goal or objective listed above, write one or more actions required to complete it.   

Startup capital 

• List any and all startup expenses that come to mind. 
• Next to each: 
• Estimate the cost of any expenses you can. 
• List the most likely source of the funding. 
• Circle the high-priority expenses. 
• Assess whether your available capital is going toward the high-priority items. If not, reconsider the way you will allocate funds.  

Monthly expenses

• If you can, estimate your business’ ongoing monthly expenses immediately after launch, in three months, in six months and in one year. 
• If you can’t, what information will you need in order to estimate your expenses?  

Monthly income 

• What are your revenue streams? Estimate your monthly income accordingly. 
• Which revenue sources deliver fast or slow returns? Are there other sources you could consider to diversify assets?  
• After completing your outline, reference your responses as you work through a traditional business plan guide. This next step will allow you to expand and add more detailed information to your plan. 
• When you’re ready to make your formal plan, reference this companion guide, a standard business plan outline  (PDF). We've also included a  business plan example  to help as you fill in your outline. 

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Sample Commercial Bank Business Plan

Here is how to write a commercial bank business plan .

The financial services sector of any economy can never be complete without the services offered by commercial banks.

Commercial and private banks are profit-based. They grant loans, accept deposits, and also offer other types of financial services like electronic banking (including the transfer of funds among others).

Commercial Banking Business Plan Sample

In writing your commercial bank business plan, the following sections should not be left out.

These are basic to having a successful and implementable plan. They include the executive summary section, the company description, market analysis, and competitive analysis sections.

Additional sections include a description of management and organization, breakdown of products and services, marketing plan, sales strategy, request for funding, and financial projections.

Each of these is key to writing a comprehensive commercial bank business plan.

Executive Summary Section

As the name suggests, your commercial bank business plan should have the executive summary section. This should be the first section of your plan. Though this is the usual pattern, it is written last.

This is understandable because it summarizes your entire plan.

Now, the executive summary section of your business shouldn’t belong. It should be a page or two at most. To provide your reader with an enjoyable presentation of what your commercial bank business is about, it should follow a basic format;

Questions that will need to be answered here include what your commercial bank business is about, how it fits into the marketplace, and the problem it solves. One of the common problems it solves involves reaching the unbanked population with basic as well as innovative commercial banking services.

What is the cost of starting a commercial banking business and how much financing do you need? The investor(s) is interested in how their investments plus interest will be recouped. So, what is the return on investment like?

Your vision and mission statements must be added including how the ownership structure of your commercial bank operations is.

Company Description

A detailed description of your commercial bank business must be provided under this section. Important information must be provided here including your goals, as well as your target market.

There should be a discussion of how your banking operations will stand out from the rest. Also, you must state how your services and products (if any) will be helpful to clients or your target market.

Market Analysis

This is one of the most crucial parts of your commercial bank business plan. Here, an in-depth assessment of the financial services industry is required to enable you to have a full grasp of specific gaps you need to fill.

The use of data and statistics to explain the industry as well as findings and trends is very important. That way, a likely direction is identified and you’re able to seek innovative ways to serve your target clients better.

Competitive Analysis

Commercial banking is a highly competitive sector.

As such, you’ll need to determine or analyze how your business will come, what gaps to fill and also identify your competitors (other commercial banks).

When identifying your competitors, your goal is to know their strengths and weaknesses and finding ways your commercial banking operations will stack up against such.

Description of Management & Organization

Your commercial bank business needs an organizational structure.

Here, you’ll need to elaborate on membership, qualifications, and positions within your management team to be filled. Only skilled and experienced professionals must be picked for such positions.

The structure your commercial bank will take or adopt is also important and must be clearly stated. Membership of your bank’s board of directors must also be identified and provided.

Breakdown of Products and Services

Commercial banking operations are mostly service-based.

However, depending on your areas of interest, you may want to create products such as project finance, industrial loans, leasing, syndicated loans, bills of exchange, foreign trade financing among several others.

Marketing Plan

Marketing is a basic part of commercial banking operations.

As such, you’ll need to have a detailed plan on how you intend to sell your products to clients (both new and existing). A well-written marketing plan should include market research, identify a target market, and also discuss positioning.

Other vital components include competitive analysis, market strategy, budget, and metrics. These enable you to come up with an effective marketing strategy that bolsters your operations leading to increased levels of success.

Sales Strategy

Every service or product offered by a commercial bank needs to be sold. Here, you’ll need to discuss the ways and strategies through which your services and products will be sold. There must be clarity.

Apart from the methods to be adopted, strategies may include the hiring and deployment of sales reps to specific targets or clients. With an effective sales strategy, your commercial banking operations are likely to be successful in the long run.

Request for Funding

Part of the requirements for starting a successful commercial banking operation involves getting the funding necessary. For this to be possible, you’ll need to request funding.

Here, discussions will focus on the amount required for the takeoff of your bank.

Detailed information on how these funds will be spent is also essential. You may also want to disclose future funding requirements for any projects or expansion plans to your operations (if any).

With detailed information provided on these, your chances of getting the needed funding are significantly increased.

Financial Projections

This section discusses the anticipated revenue and must include set goals or targets based on market research.

A full report of your anticipated revenue covering 12 months and also your projected earnings for a period covering 5 years must be included.

Clarity is of the essence when it comes to writing a commercial bank business plan. Not only does this help your reader fully grasp its contents, but it also enables you to strategically implement your banking operations.

Here, we’ve provided tips and guidance on how to go about writing your commercial banking business plan. The sections included here are crucial and must be covered in detail. No aspect of your operations must be left out.

Equally important is the need to fully implement its content.

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Writing a Bank Business Plan

• Written By Dave Lavinsky

When it comes to seeking funding from a bank or other financial institution, one of the most important things you can do is have a well-written business plan . This document will not only give potential lenders and investors an idea of your company’s current position and future goals but will also provide them with a clear understanding of the risks involved in lending you money or investing in your business.

What is a Business Plan?

A business plan is a document that provides a detailed description of a business, its products or services, its market, and its financial projections. It is used to secure funding from lenders or investors and to provide guidance for the business’s future operations.

Why Write a Business Plan

There are several reasons why you might want to write a plan for your business, even if you’re not looking for funding, they are:

• To clarify your company’s purpose and direction
• To better understand your industry and customers
• To develop a realistic financial plan and accurate projections
• To identify potential risks and opportunities
• To track your company’s progress over time

An effective and well-written plan is helpful for potential investors and clarifies the plans you have for any future business partners.

Sources of Business Funding for Banks

There are many sources of business funding available to banks, including:

• Equity financing: This is when you sell a portion of your business to investors in exchange for capital. This can be a good option if you need a large amount of money quickly, as it doesn’t require you to pay back the funds over time.
• Debt financing: This is when you borrow money from a lender, such as a bank, in exchange for repayment plus interest. This type of financing can be helpful if you need to keep your cash flow low in the early stages of your business.
• Grants: There are several different government and private grants available to businesses, which can often be used for start-up costs or expansion.
• Venture capital: This is when you receive funding from a venture capitalist in exchange for a portion of your company’s equity. Venture capitalists typically invest their own personal savings in high-growth businesses with a lot of potential.

Resources to Write a Bank Business Plan

To write a bank business plan, you’ll need access to a variety of resources, including:

Sample Plans for Your Business

A good place to start is by looking at some sample plans for businesses in your industry. This will give you a good idea of the types of information to include in your own plan.

Business planning software

There are a number of software programs that can help you create professional-looking plans for your business.

Market Research

When writing a business plan for a bank, it’s important to include a section on your company’s market research. This will include detailed information about your industry, your market, and your competition.

Industry Analysis

In order to accurately describe your industry and the market for your products or services, you’ll need to conduct an industry analysis. This should include information about the size and growth of the industry, the key players in the industry, and any major trends or changes that are taking place.

Target Market Analysis

To effectively market your products or services, you need to understand who your target market is. This should include information about the demographics of your target customers (age, gender, income, etc.), psychographics (lifestyle preferences, interests, etc.), and geographic (location, region).

Competition Analysis

In order to differentiate your business from the competition, you’ll need to know what they’re offering and how they’re positioning themselves in the market. This should include a SWOT analysis (strengths, weaknesses, opportunities, threats) of your competitors.

Customer Segments

A customer segment is a group of customers who share common characteristics, such as age, income, location, or lifestyle preferences. When creating business plans for a bank, it’s important to identify and target your key customer segments. This will help you focus your marketing efforts and create products and services that appeal to your target market.

There are a variety of ways to segment customers, including:

• Demographics: Age, gender, income, location, etc.
• Psychographics: Lifestyle preferences, interests, etc.
• Behavior: How they interact with your brand, what channels they use to purchase products or services, etc.
• Usage: How often they purchase your product or service, how much they spend, etc.
• Value: How much they’re willing to pay for your product or service, how much they value customer service, etc.

Once you’ve identified your customers, you can create buyer personas. These are fictional characters that represent your ideal customer within each segment. Creating buyer personas will help you better understand your target market and create more effective marketing campaigns.

Financial templates

If you’re not familiar with financial terminology or calculations, use a financial template to help you develop your business’s financial projections as well as including an income statement and balance sheets.

Accounting and Legal Advice 

It’s important to seek out accounting and legal advice from professionals who can help ensure that your business plan is accurate and complete.

Bank Business Plan Template

While there is no one-size-fits-all template for writing a business plan, there are some key elements that should be included. Here is a brief overview of what should be included:

Executive Summary

This is a high-level overview of your company, its products or services, and its financial situation. Be sure to include information on your target market, your competitive advantage, and your plans for growth.

Company Description

This section provides more detail on your company, including its history, structure, and management team. Be sure to include information on your company’s mission and vision, as well as its values and goals.

Products and Services

Here you will describe your company’s products or services in detail, including information on your target market and your competitive advantage.

Market Analysis

In this section, you will provide an overview of your market, including demographic information and information on current and future trends. This is also a good section to add the marketing plan you have developed to appeal to potential customers.

Sales and Marketing

This section will detail your sales and marketing strategy, including information on your pricing, your distribution channels, and your promotion plans.

Financial projections

This is perhaps the most important section of your business plan, as it will provide lenders and investors with an idea of your company’s financial health. Be sure to include detailed information on your past financial performance, as well as your projections for future revenue and expenses. This is also a good section to include your cash flow statements, income statements, and information about any bank accounts opened for your business.

This is where you will include any supporting documents, such as your financial statements, marketing materials, or product data sheets.

While this is not an exhaustive list of everything that should be included in your bank business plan, it covers the most important elements. By taking the time to write a well-thought-out and detailed business plan, you will increase your chances of securing the funding you need to grow your business.

Opening a bank is a detailed and complex process, but it can be enormously rewarding both professionally and financially. The best way to increase your chances of success is to write a business plan that outlines all aspects of opening and running a bank. This document should include market analysis, organizational structure, financial projections, and more. Our team has extensive experience helping entrepreneurs open banks. We have created a comprehensive business plan template that covers all the key points you need to consider when writing your own business plan. By following our template, you can be sure that you haven’t missed any essential elements in your planning process. Investing in professional help when writing your business plan gives you the best chance for success when opening a new bank.

Bank Business Plan Template FAQs

Do i need to use a business plan template.

There is no one-size-fits-all answer to this question. If you are seeking funding from a lender or investor, they may have specific requirements for the format and content of your business plan. In other cases, using a template can be helpful in ensuring that you include all of the important information in your plan.

Where can I find a business plan template?

There are a number of resources that offer business plan templates, including the Small Business Administration (SBA) and the U.S. Chamber of Commerce. Additionally, many software programs that offer business planning tools also include templates.

How long should my business plan be?

Again, there is no one-size-fits-all answer to this question. The length of your business plan will depend on the complexity of your business and the amount of detail you need to include. In general, however, most business plans range from 20 to 50 pages.

Do I need to hire a professional to help me write my business plan?

While you are not required to hire a professional to write your business plan, it may be helpful to do so. A professional can help you ensure that your plan is well-written and free of errors. Additionally, they can offer advice on how to best structure your plan and make it more likely to succeed.

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Commercial Bank Business Plan and SWOT Analysis

Commercial Bank Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Commercial Bank Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Commercial Bank business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

• Bank/Investor Ready!
• Complete Industry Research
• 3 Year Excel Financial Model
• Business Plan (26 to 30 pages)
• Loan Amortization and ROI Tools
• Three SWOT Analysis Templates
• Easy to Use Instructions
• All Documents Delivered in Word, Excel, and PDF Format
• Meets SBA Requirements

Commercial banks are one of the oldest industries within the United States. In fact, commercial banking is one of the backbones to the economy. These organizations allow  individuals to safely keep their money in a financial institution while concurrently being able to borrow funds to purchase new homes, develop new businesses, and pay for certain day-to-day expenses. In fact, one of the reasons why the commercial banking industry is the most regulated aspect of the financial system given that it is so central to every other business within the United States and abroad. The financial crisis of 2008 made it even abundantly more clear that having strong commercial regulations as it relates to banking is essential for a thriving economy.

Commercial banks are also an important part of any community given that they extend credit for economically viable projects like small businesses, farms, real estate developments, as well as a host of other financing activities that improve the lives of people within the community. In fact, many economic studies point to the fact that the extension of credit is one of the single greatest factors in ensuring that a community can thrive on an ongoing basis. This is especially true given that credit is the lifeblood for many small businesses that need ongoing working capital as well as expansion capital.

The barriers to entry for a new commercial bank are extremely high. Typically, a minimum capital investment of at least $10 million to $20 million is required as part of the tier 1 capital needed to launch operations. Banks typically are able to lend up to 90% of the money that they have in deposits, but they are required to keep a substantial amount of equity on hand in order to defray some of the risks that may happen with credit defaults. Generally, a commercial bank cannot be owned by one single individual. It is a requirement by the FDIC as well as the US Federal Reserve system that a large-scale board of directors is maintained in order to properly carry out banking operations.

A commercial bank business plan should have a three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page it focuses significantly on how income will be generated from interest on loans as well as fees associated with checking accounts, savings accounts, and brokerage accounts. It is been one of the common trends within this industry to integrate a host of financial services into one commercial banking facility. In fact, among the 8,000 different banks within the United States about half of them maintain securities licenses so they can hold individuals retirement accounts, 401(k)s, IRAs, and related financial instruments on behalf of their customers. This trend is expected to continue in perpetuity given that vertical integration allows for commercial banks to generate significantly more profits.

The commercial bank business plan should also feature a substantial amount of demographic information. This is going to be required by the Federal Reserve as well as other banking organizations are issue licenses before operations can commence. This examination should include an overview of the population size, population density, median household income, median family income, median household value, and the demographics of people of all ages. Anyone that is over the age of 18 can acquire a bank account and it is important to understand the wealth and income levels within the target market in order to get an understanding of how much money will be held in deposits at any given time. These again are going to be pieces of information that are to be required not only in the business plan but also for applications for banking licenses.

A commercial bank marketing plan is also going to need to be developed and submitted not only to investors that are going to put up the initial $10 to $20 million of capital needed but also to licensing authorities. Foremost, most commercial banks start in more rural areas were small towns in order to get an initial customer base. Many people choose to do banking with smaller banks because they prefer the close personal relationship that they can have with their financial professionals. As such, most commercial banks position their marketing messages so that they are able to effectively differentiate themselves from large-scale money center banks. Although commercial banks are operate in a different capacity than a credit union, most local small banks do try to provide the same level of service. It is imperative

It is imperative these days that any financial institution maintain an expansive online presence as it relates to not only providing information about services offered but also functionality that allows the users to check their online balances, complete bill paying, overview any loans or lines of credit there are outstanding, and a whole host of other activities that are normally associated with financial transactions. This is now no longer an option for a business to have given that almost all large money center banks to provide their customers not only with a website they can use for financial transactions but also for mobile applications as well. Once established, many smaller commercial banks will seek to develop mobile applications that allow users to manage their finances from the convenience of their mobile phone or tablet.

A large-scale print advertising campaign is going to need to be undertaken in order to generate interest among individuals within the community for checking accounts, savings accounts, and brokerage accounts. Most importantly, this print advertising campaign needs to be carry out on every medium available within a target market radius of 25 miles to 50 miles depending on the type of location. An attorney that is familiar with banking and lending laws should review all marketing materials that are distributed by the bank in order to ensure that the business is complying with all disclosure laws at all times. This is one of the major ongoing challenges for marketing as it relates to a commercial bank given that certain statements must fall in line with legally permissible regulations.

A commercial bank SWOT analysis should be produced as well. As it relates to strengths, a commercial bank is able to generate income and pretty much every economic climate given that loans are considered to be contractual agreements and interest will continue to be paid despite whether or not the economy is doing well or poorly. Additionally, commercial banks have extremely high barriers to entry given the extremely large amount of money needed to launch operations as well as the ongoing licensing activities that need to be maintained at all times. For weaknesses, commercial banks can have a decline in the revenues or have substantial issues with the balance sheets during times of economic recession when people do not pay their financial obligations. However, most financial institutions are highly regulated so that if a loss occurs in any given time the bank will be able to remain financially stable. For opportunities, one of the ways that has been most prevalent for commercial banks to expand their operations is to acquire third-party companies. These mergers and acquisitions often create much larger financial situations are far more financially stable. Additionally, many commercial banks will seek to sell themselves to a large money center bank in order to generate a substantial return on investment from the sale of the business as a whole. Many financial institutions will also seek to establish additional locations so that they can even increase the number of deposits that they have in the form of checking accounts and savings accounts. Finally, for threats – major changes in regulation are frequent within the financial services and commercial banking industry. As such, a highly skilled attorney or law firm has extensive familiarity with commercial banking needs to be retained in order to ensure that the bank can properly operate due to any changes in financial regulation on the federal level.

A commercial bank is one of the hardest types of businesses to start but once they are operational there tend to be highly profitable companies. It is imperative that the entrepreneur that is looking to start this business have an extensive understanding of banking as well as extensive experience within this field. Banking licenses required that there is a significant amount of experience and diligence as it rates to operating these businesses on a day-to-day basis.

Commercial Bank Business Plan

1.0 Executive Summary

The purpose of this business plan is to raise $10,000,000 for the development of a commercial bank while showcasing the expected financials and operations over the next three years. Commercial Bank, Inc. (“the Company”) is a New York based corporation that will provide traditional commercial banking services for its investors in its targeted market. The Company was founded by John Doe.

1.1 The Operations

As stated above, the Company will act in a traditional banking capacity by offering loans, checking accounts, savings accounts, and other financial products normally associated with banks. At this time, Mr. Doe is securing the capital that is required in order to receive a banking license from the US Federal Reserve. The Founder is also undergoing the process of acquiring the needed licensure to operate this business.

The third section of the business plan will further describe the underwriting services and investment management services offered by the Commercial Bank.

1.2 The Financing

At this time, the Company is seeking to raise $10,000,000 for the development of the Commercial Bank’s operations. Mr. Doe is seeking to sell an 80% ownership interest in the business in exchange for this capital. 85% of the invested capital will be used for direct investments into the firm’s investments. Briefly, the capital will be used as follows:

• Financing for lending activities.
• Development of the Company’s initial branch.
• General working capital.

1.3 Mission Statement

Management’s mission is to provide the greater New York metropolitan area with an extensive line of banking and financial services that are affordable and convenient.

1.4 Management Team

The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the commercial banking industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.

1 . 5 Revenue Forecasts

1.6 Expansion Plan

The Company plans on positioning itself toward becoming a leading financial services provider among middle income people. As time continues, Commercial Bank, Inc. intends to not only expand its geographic reach by establishing relationships and offices in other major metropolitan areas but also by acquiring banks.

2.0 The Financing

2.1 Registered Name and Corporate Structure

Commercial Bank, Inc. The Company is registered as a corporation in the State of New York.

2.2 Use of Funds

2.3 Investor Equity

At this time, Mr. Doe is seeking to sell an 80% interest in the Commercial Bank in exchange for the capital sought in this business plan. Please reference the Company’s private placement memorandum regarding more information regarding the Company’s fee and ownership structure.

2.4 Management Equity

John Doe currently owns 100% of the Commercial Bank, Inc.

2.5 Exit Strategy

The Management has planned for three possible exit strategies. The first strategy would be to sell the Company to a larger entity at a significant premium. Since, the financial management and commercial banking industry maintains a very low risk profile once the business is established; the Management feels that the Company could be sold for ten to fifteen times earnings.

The second exit scenario would entail selling a portion of the Company via an initial public offering (or “IPO”). After a detailed analysis, it was found that the Company could sell for twenty to thirty times earnings on the open market depending on the business’s annual growth rate and strength of earnings. However, taking a company public involves significant legal red tape. Commercial Bank, Inc. would be bound by the significant legal framework of the Sarbanes-Oxley Act in addition to the legal requirements set forth in form S1 of the Securities and Exchange Commission. The Company would also have to comply with the Securities Act of 1933 and the Exchange Act of 1934.

3.0 Operations

Below is a description of the commercial banking services offered by the Company.

3.1 Customer Accounts

The primary service offered by Commercial Bank, Inc. is the management of checking accounts, savings accounts, and money market accounts. The bank, in turn, will use these deposits for financing customer loans and for making acquisitions of debt instruments in the secondary markets. The Company will provide Visa/MasterCard branded debit cards that can be used in any ATM or at stores that accept EBT payments.

At all times, the Company will comply with the myriad of federal, state, and central bank regulations (specifically Regulation U) that guide the operations of thrifts, trusts, and financial companies.

Through its branches, the business will be able to provide its customers with a variety of lending products including:

• First time homebuyer mortgages
• Second mortgages
• Home equity lines of credit/loans
• Commercial Mortgages
• Mortgage refinancing
• Automotive Loans
• Marine Loans
• Business Loans (SBA and traditional commercial loans)
• Student Loans
• Debt Consolidation
• Credit Cards (Secured, Unsecured, and Prepaid Cards)

4.0 Market and Strategic Analysis

4.1 Economic Analysis

This section of the analysis will detail the economic climate, the banking industry, the customer profile, and the competition that the business will face as it progresses through its business operations.

Currently, the economic climate is uncertain. The pandemic stemming from Covid-19 has created a substantial amount of turmoil within the capital markets. It is expected that a prolonged economic recovery will occur given that numerous businesses are being forced to remain closed for an indefinite period of time (while concurrently having their respective employees remain at home). However, central banks around the world have taken aggressive steps in order to ensure the free flow of capital into financial institutions. This is expected to greatly blunt the economic issues that will arise from this public health matter.

4.2 Industry Analysis

In the United States there are over 75,000 businesses that operate as depository credit institutions. Among these business, aggregates receipts over each of the last five years has been in excess of $800 billion dollars of interest and service revenue. These businesses employ over 1.7 million people.

This is a mature industry, and the future growth rate will mirror that of the economy as a whole. One of the major trends within this industry is for commercial banks to engage in a wide range of businesses including traditional banking coupled with brokerage/investment banking services. Moving forward, the Company may seek to integrate these operations into the overall service architecture of the business.

4.3 Customer Profile

The Company has established several lending procedures that will ensure that the Company’s default rate is less than 1.5% of the Company’s total loan portfolio. Among people that will use the Company’s services for borrowing money, Management has developed the following demographic profile:

• Between the ages of 28 and 65
• Household income of $35,000+
• Will borrow for an automotive or home purchase.
• Lives within 10 miles of a Commercial Bank branch

4.4 Competitive Analysis

This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.

5.0 Marketing Plan

Commercial Bank, Inc. intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Commercial Bank.

5 .1 Marketing Objectives

• Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
• Establish relationships with third party banks within the United States (for specialized syndications).
• Maintain an expansive presence among all social media platforms.
• Maintain strong relationships with regional community organizations.

5.2 Marketing Strategies

Management intends to use a number of marketing strategies to immediate generate depositors and borrowers for Commercial Bank, Inc. The Company intends to use traditional print and media advertising as well as online sales tactics which will further increase visibility of Commercial Bank.

The Company will maintain an expansive presence on the internet. The business’ website will feature integrated banking functionality so that customers can engage all of their banking needs from the platform. The website will be mobile friendly and search engine optimized. The Company will have a stand along application developed that compliments the Company’s website.

The Commercial Bank will also maintain pages among all major social media platforms including Facebook, Twitter, Instagram, LinkedIn, and related platforms. The business will use targeted advertisements on these platforms among people that live within the target market area and fall into the Company’s demographic profile.

The business will regularly distribute a number of flyers while concurrently engaging in a massive grand opening in order to inform potential depositors and borrowers of the Company’s banking operations. The grand opening period will last three to six months depending on the success of the marketing campaign. Additionally, higher interest rates and lower loan rates will be used in order to convince people to switch their checking accounts and loan needs to Commercial Bank, Inc.

6.0 Organizational Overview

6.1 Organizational Chart

6.2 Personnel Budget

7.0 Financial Plan

7.1 Underlying Assumptions

The Company has based its proforma financial statements on the following:

• Commercial Bank will have an annual revenue growth rate of 20% per year.
• The Owner will acquire $10,000,000 of equity funds to develop the business.
• The Company will earn a compounded annual return of 30% on its proprietary investment portfolio.

7.2 Financial Highlights

The Company’s revenues are sensitive to the overall condition of the financial markets. Revenues derived from the lending portfolio are directly tied to the prevailing prime credit interest rate. As such, the Company must strive to invest in high credit quality investments that have ‘staying power’ during times of economic recession or pullback. Management will enact stringent credit control and screening policies to ensure that losses resulting from defaulted loans are kept below 1.5% of the Company’s closed loan portfolio.

7.3 Source of Funds

7.4 Profit and Loss Statement

7.5 Cash Flow Analysis

7.6 Balance Sheet

7.7 Breakeven Analysis

7.8 Business Ratios

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Table of Contents

What does a loan business plan include?

What lenders look for in a business plan, business plan for loan examples, resources for writing a business plan.

A comprehensive and well-written business plan can be used to persuade lenders that your business is worth investing in and hopefully, improve your chances of getting approved for a small-business loan . Many lenders will ask that you include a business plan along with other documents as part of your loan application.

When writing a business plan for a loan, you’ll want to highlight your abilities, justify your need for capital and prove your ability to repay the debt. 

Here’s everything you need to know to get started.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

A successful business plan for a loan describes your financial goals and how you’ll achieve them. Although business plan components can vary from company to company, there are a few sections that are typically included in most plans.

These sections will help provide lenders with an overview of your business and explain why they should approve you for a loan.  

Executive summary

The executive summary is used to spark interest in your business. It may include high-level information about you, your products and services, your management team, employees, business location and financial details. Your mission statement can be added here as well.

To help build a lender’s confidence in your business, you can also include a concise overview of your growth plans in this section.

Company overview

The company overview is an area to describe the strengths of your business. If you didn’t explain what problems your business will solve in the executive summary, do it here. 

Highlight any experts on your team and what gives you a competitive advantage. You can also include specific details about your business such as when it was founded, your business entity type and history.

Products and services

Use this section to demonstrate the need for what you’re offering. Describe your products and services and explain how customers will benefit from having them. 

Detail any equipment or materials that you need to provide your goods and services — this may be particularly helpful if you’re looking for equipment or inventory financing . You’ll also want to disclose any patents or copyrights in this section.

Market analysis

Here you can demonstrate that you’ve done your homework and showcase your understanding of your industry, current outlook, trends, target market and competitors.

You can add details about your target market that include where you’ll find customers, ways you plan to market to them and how your products and services will be delivered to them.

» MORE: How to write a market analysis for a business plan

Marketing and sales plan

Your marketing and sales plan provides details on how you intend to attract your customers and build a client base. You can also explain the steps involved in the sale and delivery of your product or service.

At a high level, this section should identify your sales goals and how you plan to achieve them — showing a lender how you’re going to make money to repay potential debt.

Operational plan

The operational plan section covers the physical requirements of operating your business on a day-to-day basis. Depending on your type of business, this may include location, facility requirements, equipment, vehicles, inventory needs and supplies. Production goals, timelines, quality control and customer service details may also be included.

Management team

This section illustrates how your business will be organized. You can list the management team, owners, board of directors and consultants with details about their experience and the role they will play at your company. This is also a good place to include an organizational chart .

From this section, a lender should understand why you and your team are qualified to run a business and why they should feel confident lending you money — even if you’re a startup.

Funding request

In this section, you’ll explain the amount of money you’re requesting from the lender and why you need it. You’ll describe how the funds will be used and how you intend to repay the loan.

You may also discuss any funding requirements you anticipate over the next five years and your strategic financial plans for the future.

» Need help writing? Learn about the best business plan software .

Financial statements

When you’re writing a business plan for a loan, this is one of the most important sections. The goal is to use your financial statements to prove to a lender that your business is stable and will be able to repay any potential debt. 

In this section, you’ll want to include three to five years of income statements, cash flow statements and balance sheets. It can also be helpful to include an expense analysis, break-even analysis, capital expenditure budgets, projected income statements and projected cash flow statements. If you have collateral that you could put up to secure a loan, you should list it in this section as well.

If you’re a startup that doesn’t have much historical data to provide, you’ll want to include estimated costs, revenue and any other future projections you may have. Graphs and charts can be useful visual aids here.

In general, the more data you can use to show a lender your financial security, the better.

Finally, if necessary, supporting information and documents can be added in an appendix section. This may include credit histories, resumes, letters of reference, product pictures, licenses, permits, contracts and other legal documents.

Lenders will typically evaluate your loan application based on the five C’s — or characteristics — of credit : character, capacity, capital, conditions and collateral. Although your business plan won't contain everything a lender needs to complete its assessment, the document can highlight your strengths in each of these areas.

A lender will assess your character by reviewing your education, business experience and credit history. This assessment may also be extended to board members and your management team. Highlights of your strengths can be worked into the following sections of your business plan:

Executive summary.

Company overview.

Management team.

Capacity centers on your ability to repay the loan. Lenders will be looking at the revenue you plan to generate, your expenses, cash flow and your loan payment plan. This information can be included in the following sections:

Funding request.

Financial statements.

Capital is the amount of money you have invested in your business. Lenders can use it to judge your financial commitment to the business. You can use any of the following sections to highlight your financial commitment:

Operational plan.

Conditions refers to the purpose and market for your products and services. Lenders will be looking for information such as product demand, competition and industry trends. Information for this can be included in the following sections:

Market analysis.

Products and services.

Marketing and sales plan.

Collateral is an asset pledged to a lender to guarantee the repayment of a loan. This can be equipment, inventory, vehicles or something else of value. Use the following sections to include information on assets:

» MORE: How to get a business loan

Writing a business plan for a loan application can be intimidating, especially when you’re just getting started. It may be helpful to use a business plan template or refer to an existing sample as you’re going through the draft process.

Here are a few examples that you may find useful:

Business Plan Outline — Colorado Small Business Development Center

Business Plan Template — Iowa Small Business Development Center

Writing a Business Plan — Maine Small Business Development Center

Business Plan Workbook — Capital One

Looking for a business loan?

See our overall favorites, or narrow it down by category to find the best options for you.

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U.S. Small Business Administration. The SBA offers a free self-paced course on writing a business plan. The course includes several videos, objectives for you to accomplish, as well as worksheets you can complete.

SCORE. SCORE, a nonprofit organization and resource partner of the SBA, offers free assistance that includes a step-by-step downloadable template to help startups create a business plan, and mentors who can review and refine your plan virtually or in person.

Small Business Development Centers. Similarly, your local SBDC can provide assistance with business planning and finding access to capital. These organizations also have virtual and in-person training courses, as well as opportunities to consult with business experts.

Business plan software. Although many business plan software platforms require a subscription, these tools can be useful if you want a templated approach that can break the process down for you step-by-step. Many of these services include a range of examples and templates, instruction videos and guides, and financial dashboards, among other features. You may also be able to use a free trial before committing to one of these software options.

A loan business plan outlines your business’s objectives, products or services, funding needs and finances. The goal of this document is to convince lenders that they should approve you for a business loan.

Not all lenders will require a business plan, but you’ll likely need one for bank and SBA loans. Even if it isn’t required, however, a lean business plan can be used to bolster your loan application.

Lenders ask for a business plan because they want to know that your business is and will continue to be financially stable. They want to know how you make money, spend money and plan to achieve your financial goals. All of this information allows them to assess whether you’ll be able to repay a loan and decide if they should approve your application.

On a similar note...

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Personalized Service – At local banks, such as Commercial Bank, you can expect a personalized experience. We take the time to get to know you and your business, fostering strong customer relationships. We're an integral part of the community, and we genuinely care about helping your business grow, which, in turn, contributes to the community's growth.

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Cutting-Edge Technology – Contrary to a common misconception, larger banks don't have a monopoly on advanced technology. Commercial Bank offers the same convenient technology as major banks, including ATMs, online banking, a mobile app, and more. Having a local bank like Commercial Bank, one that you know and trust, is invaluable as your business expands. Our communities flourish through the connections we build with the people and businesses around us.

Our mission has always revolved around offering our customers the best products and services in mid-Michigan. Our primary focus is on providing you with stability and simplicity. If you're ready to make the switch to Commercial Bank, our switch kit page has all the information you need to get started, including guidance on transferring your direct deposits, automatic payments, and more. We're excited to welcome you to our family!

Commercial Bank is a member of the Federal Deposit Insurance Corporation (FDIC). The FDIC insures deposits up to $250,000 per depositor, at each insured bank. To learn more about accounts that are covered and ownership categories the FDIC has available visit FDIC: Federal Deposit Insurance Corporation .

Finding business loans can be difficult and requires more attention than personal loans. Business equity line of credits, real estate loans, vehicle loans, equipment loans, and more—whatever you need, we can help. USDA loans, SBA loans, and the Capital Access Loan program can be an obstacle for many small businesses, but we can help you navigate these unique challenges.

If you’re searching for a local community bank that cares about your business, look no further. Commercial Bank understands the local business environment and can empathize with the challenges your business faces. We are prepared to provide the resources and services your business needs to achieve success! Call today and ask for more information about our loan programs. Learn more about our  business loans and lines of credit  here.

At Commercial Bank, we have a variety of flexible and convenient business checking services to help your business thrive. Regardless of the size of your business, we will work with you to provide you with the best checking products to help you manage your cash flow. Explore  Commercial Bank’s business checking options  and choose the right one for you.

Not sure where to get a health savings account? If your business is already established, and you’d like to offer your employees a high-deductible health care plan, ask about our HSA group option. Our Health Saving Accounts for employers are an excellent way to complement your health program! Call today to  learn about the many benefits of a Health Savings Accounts  with Commercial Bank.

Technologies are rapidly shaping our society and changing the way we bank. Are you ready to take full advantage of the convenience your electronic devices offer when it comes to banking? At Commercial Bank, Remote Deposit Capture is a simple and secure way to do your business at your business .

Contact your  local treasury representative , or give us a call at 1-800-547-8531,  to find a solution for your business today

In 2021, Congress enacted the Corporate Transparency Act. This law creates a beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures. Click here to learn more. 

Banker Tips

Business Development Strategies for Bankers and Commercial Lenders

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Banker Tips > Sales > Business Development Plans for Commercial Lenders

Business Development Plans for Commercial Lenders

Author: Chris C February 8, 2017 0 Comments

Sales , Time Management

business development plan , business plan for commercial lenders , centers of influence , COIs , commercial lending , jobs in commercial banking , jobs in commercial lending

We all have goals — personal as well as professional.  The personal ones we set for ourselves all the time…I, for example, started feeling guilty recently that I had stopped playing guitar. I used to be pretty good, or at least I used to be a little less bad and it bummed me out so I set myself a goal to practice daily.  It has been a nice routine and something that I look forward to every evening after work.  I still stink but I’m getting less awful every day !

Professional goals, when you are working in the role as a lender, tend to be a big part of the job if not the biggest part of the job…we all know that.  Despite this, I run into so many lenders out there who don’t actually have a defined plan to get where they need to be each year.  It’s kind of ironic that in a business where we expect our clients to provide business plans, feasibility studies, financial projections and whole lot of other information to justify our investment in their projects, the lenders themselves so often lack their own defined plan of action.  I want to share with you today some tips in putting together a solid lender business plan.

It’s All In Your Head

First off, saying your plan is in your head is not good enough.  Just like you might scoff at the guy who tells you his plan for a craft brewery/cat cafe fusion concept is “all up here”, your business plan needs to start in your brain and end up written down so you can review it and revise it over time .  The first thing to do is easy, list out your goals.

Fishing Pole or Fishing Net?

Next, you should brainstorm a bit and consider who your target audience is.  Your best bet is to market to the people who are trusted by your prospective clients.   Your time is best spent developing relationships with those key people versus cold calling all the prospects on your list.  Think of it this way — you could spend an hour a day cold calling prospects and if you make those cold calls warm and end up getting a deal from one of those calls, you get that one deal.  You might uncover needs for some additional services or if you’re really lucky you might get a referral to a friend they have who also needs a loan.

Or, you could spend that same time developing relationships with people who deal with your ideal clients, and lots of them, on a routine basis. These people are your centers of influence or COI’s.  Targeting individual client prospects directly is like fishing with a fishing pole…best you can catch is one at a time.  Targeting COI’s is like towing a huge net along the side of the boat…you can pickup loads of fish in the same amount of time it would take you to catch just one with a pole.

My COIs are primarily comprised of commercial real estate brokers and agents, business/real estate attorneys, CPAs, business consultants, commercial insurance agents, and financial advisors.  Take some time to brainstorm the COIs that are most appropriate for you.

Now, you can jot down some main headings that cover what you want to accomplish.  For example, my main areas of focus in targeting my COIs involved the following three efforts: Marketing, Prospecting, and Networking.  Once you have those main focus areas listed, it’s time to add some goals for each.

Make your goals SMART – Specific, Measurable, Action-oriented, Realistic, and Timely .   My marketing goals included making 2 weekly posts to LinkedIn relevant to the types of deals I finance, one small weekly direct mail or e-mail campaign, and a larger monthly direct mail or e-mail campaign.  These goals all had a time frame, a number to aim for (# of posts, # of people contacted, etc.), and were realistic and easy to measure.

Wrapping Up

Now that you’ve put your plan on paper, share it.  Just like when you get on Facebook and tell the world that you are going to start going to the gym daily to keep yourself accountable, do the same with your business plan.  Share it with your manager, associate, a trusted colleague, or someone else who can help hold you to doing what you have set out to do.  And revisit it often.   Plans are fluid documents that can and will change over time .  This is a topic for another post, but quickly I will note that one of the great takeaways I had from reading The 12 Week Year is the concept of making your “year” a 12 week period instead of 12 months.  This gives you the opportunity to adjust your plan and omit activities that are not working before a full year is behind you and it also helps provide you with a greater sense of urgency as every day really counts in a 12 week year.  Plus, it takes away the “wait until next year” excuse to make changes…so forget the excuses, get your plan in place, and start working it today!

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TD risks earnings hit from US probe

Monday, 06 May 2024

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Facing scrutiny: TD officials at the bank’s AGM in April. Shareholders are clamouring for clarity on potential penalties the lender faces. — Bloomberg

Toronto: With new allegations emerging surrounding US anti-money-laundering investigations into Toronto-Dominion Bank (TD), the lender could face a much higher fine than previously expected as well as a significant hit to its long-term financial performance, according to analysts at National Bank of Canada.

The US Department of Justice is investigating the Canadian bank over its ties to a US$653mil drug-money-laundering case in New York and New Jersey, according to a person familiar with the matter.

That’s on top of another case in which one of the bank’s New Jersey branch employees was charged with accepting bribes to facilitate the laundering of drug money.

“The allegations against TD lead us to assess more severe ‘worst-case’ scenarios than what we previously contemplated,” National Bank analysts led by Gabriel Dechaine wrote in a note to clients late last Thursday, after the Wall Street Journal first reported TD’s connection to the drug-money-laundering case.

National Bank’s analysis of the latest revelations “suggests that these issues might not only result in a much larger fine than initially contemplated” – about US$2bil, rather than previous expectations of US$500mil to US$1bil – “but they could also have longer-term implications for TD’s financial performance,” Dechaine and his colleagues wrote.

TD’s future earnings potential could be slashed by more than C$1bil in the report’s worst-case scenario, a figure that includes C$250mil of higher ongoing compliance costs per year, limits on earnings growth and five years in the “penalty box” with US authorities.

The bank’s stock slumped by as much as 6.8% last Friday, eventually closing down 5.9%, its biggest one-day decline since the outset of the pandemic in March, 2020.

TD shed C$8.2bil in market capitalisation last Friday after already dropping by C$2.4bil last Thursday when shares sank in the wake of the Journal’s anti-money-laundering report.

Shopify Inc briefly passed it as the second-largest company by market capitalisation on the Toronto Stock Exchange.

“TD is a strong institution with the capital, liquidity and capacity to fund the critical effort currently underway to strengthen its anti-money-laundering programme, invest in the business and continue to serve its customers and clients with excellence,” bank spokesperson Lisa Hodgins said in an emailed statement last Friday.

“As we have said, we anticipate and continue to plan for additional monetary penalties, which are not reliably estimable at this time.”

In addition to the Department of Justice investigation, the Toronto-based lender faces three separate regulatory probes, and it has already set aside an initial provision of US$450mil for just one of those.

“We believe that a total penalty amount of US$2bil is realistic. However, fines alone aren’t the only financial consideration,” the National Bank analysts said.

The major issue is the prospect of a consent order from one or more US agencies, which could include penalties such as an asset cap on growth or restrictions on mergers and acquisitions for a period of time.

US consent orders in the 2010s and this decade against HSBC Holdings Plc and Wells Fargo & Co – for laundering tied to cartels and false-account activity, respectively – are relevant precedents, though they are “worst-case scenarios”, the National Bank analysts said, adding that they’re assuming that the issues involving TD are less severe.

“Not only were the direct financial penalties assessed against each institution very large, the long-term implications were materially negative to future performance,” Dechaine and his colleagues wrote.

TD first disclosed last year that it was under investigation by the Department of Justice, and has said repeatedly that it can’t estimate the final size of any fines or other penalties it might face tied to the anti-money-laundering investigations.

“At a high level, we learned why this is going on,” said Dan Rohinton, portfolio manager at iA Global Asset Management. The firm’s retail mutual funds have about four million TD shares.

“I don’t want to say this too flippantly, but this isn’t a run-of-the-mill internal-control issue. This is a priority issue for the United States, where drug-overdose deaths are around 100,000 per year.” — Bloomberg

Tags / Keywords: TD , finance , money laundering

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