2 Similarities and 2 Differences Between the Bank Business Plan and Information Memorandum

 

There are many times throughout the lifecycle of your business you will need to create specialized business documents. Two of the most popular and common are the Bank Business Plan and Information Memorandum. These are completely distinct documents, yet they are more similar than you may realize.

Understanding the differences and similarities can help round out your understanding of business documents. It may even give you some insight if you are considering writing your document yourself.

Similarities

Key Sections – When you first look at these documents you will see that they at first glance they really do look similar. This is because you will see several of the same sections. The sections that almost always appear in both include an Executive Summary, Industry Analysis, Sales & Marketing Plan, and the Financials to name a few.

It’s important to note that even though the same sections may appear in both documents, the contents and focus may be quite different. We’ll touch more on this in the next section.

Overall Layout – Not only are many of the sections the same but in general they will follow a similar order. Both documents will open with an Executive Summary and end with the Detailed Financials. The order of the other sections may be a bit more diverse. Though, this is true from business plan to business plan or Information Memorandum to information memorandum as well.

The reason for these variations themselves may vary. It can be anything from the business model to the intended audience and may have little to do with the type of document. The important point here, is that at first glance, these documents are quite similar.

Differences

The Purpose – What really sets a bank business plan and information memorandum apart are their intended purpose. In the case of a bank business plan, you are attempting to get someone to loan you money. In contrast the purpose of the information memorandum is to entice investors or buyers to buy a share of or outright purchase your entire business.

The Audience – Getting into more detail, you’re writing these documents to appeal to two very distinct audiences. On one hand, for the Bank Business Plan, your audience is a bank representative or loan officer. In this case, their biggest concern is whether or not you will be able to pay back your loan. They will primarily review your document from a stability and cash flow perspective.

Meanwhile, investors or buyers are mainly interested in growth potential to ensure a good return on investment. That is why, although you’ll have the same general information in the financial section, what you focus on and how it is presented will differ. Here, your audience is likely less risk-averse with the trade off of the chance for more return.

Professionals See This Clearly

It can be anxiety-inducing trying to decide what to do for your specific document. You need to consider so many factors. Given the importance a bank business plan or information memorandum can have on the overall success of your business, many people choose to hire Professional Business Plan Writers. Fees for the most experienced may feel steep but, it is an important investment in your future success, regardless of what the end goal is for you.