Loan Officer Business Plan Template
If you want to start a loan officer company or expand your current loan business, you need a business plan.
The following Loan Officer business plan template gives loan officer businesses the key elements to include in a winning business plan. In addition to this template, a solid plan will also include market research to help you better understand the mortgage industry, the real estate market and your specific target market. It will also help you craft a strong loan officer marketing plan and financial projections.
Loan Officer Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a new mortgage loan officer located in downtown [Location]. Our mission is to help as many customers as possible get a mortgage so they can buy their dream home. Online mortgage applications are run by machines that don’t bother to know the human filling out the application. As such, many people get denied for loans that they could be approved for. At [Company Name], we see the human and aim to help as many people as we can get the mortgages they need.
[Company Name] is run by [Founder’s Name] who has worked for banks for twenty years. He has considerable experience helping people get approved for a loan and has thorough knowledge of the regulations and laws of the industry. He has a passion for helping people buy their dream homes and is committed to helping as many people as possible get approved for a mortgage.
Products Served
[Company Name]’s primary service is to help our clients get approved for a mortgage. This process includes interviewing the clients, gathering their credit history, looking for mortgage options, completing paperwork, and informing clients whether or not they were approved for the loan.
Customer Focus
[Company Name] will primarily serve the residents within a ten-mile radius of our location. The demographics of these customers are as follows:
- 84,730 residents
- Median income of $55,000
- 45% married
- 35% with children under 18
- 55% in management/professional occupations
- Median age of 37
Management Team
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [Founder’s Name] has been a certified loan officer for twenty years and has worked for several banks. His considerable knowledge and expertise of the industry will prove invaluable as we help our clients get the mortgage they need to buy their dream home.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- [Company Name] will help meet the demand for loan officers. Many people in the area are eager to get a mortgage but are afraid of being rejected. They are eager to talk to a professional about their options.
- Our location is in a high-volume area with easy access from multiple residential and commercial district zones.
- The management team has a track record of success in the loan officer business.
- The local area is currently underserved and does not have many mortgage loan officers.
Financial Highlights
[Company Name] is currently seeking $160,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $50,000
- Office supplies and equipment: $10,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new loan officer firm that is dedicated to helping its clients get approved for a mortgage so they can buy their dream home. Most people apply for mortgages online or through their bank. Online applications are determined by machines who don’t consider the human when making an approval decision. Banks are rarely any better, and are extremely picky when choosing who to give a mortgage to. [Company Name] will help clients who are struggling to get approved find a good mortgage so they can finally make their dreams come true.
[Company Name] is run by [Founder’s Name] who has worked for banks for twenty years. He has considerable experience helping people get approved for a loan and has thorough knowledge of the regulations and laws of the industry. He has a passion for helping people buy their dream homes and is committed to helping as many people as possible get approved for a mortgage.
[Company Name]’s History
Upon surveying the local customer base, and finding a potential office, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [Date of Incorporation].
The business is currently being run out of [Founder’s Name] home office, but once the lease on [Company Name]’s office location is finalized, all operations will be run from there.
Since incorporation, the Company has achieved the following milestones:
- Found office space and signed Letter of Intent to lease it
- Developed the company’s name, logo and website located at [website]
- Hired an interior designer for the decor and furniture layout
- Determined equipment and fixture requirements
[Company Name]’s Products/Services
At [Company Name], our mission is to get as many customers approved for a mortgage loan as possible. We believe that everyone deserves a chance to get a home, no matter their credit history. As such, we will provide the following services to make this mission a reality:
- Interview customers to determine financial eligibility and feasibility of granting loans
- Find the best loan options possible for each customer
- Fill out mortgage application paperwork
- Set up payment plans
- Communicate lender approval decision
III. Industry Analysis
One of the biggest issues of today is the lack of affordable housing. Many people are eager to buy a home, but can’t due to rising housing costs. Since incomes have hardly risen to meet these increased prices, very few people can afford to buy their dream home.
As such, many people are struggling to find mortgages and turn to loan officers for help. Loan officers bring considerable expertise and knowledge to the table to help their clients navigate the mortgage process. They can refer particular loans and lenders based on their clients’ credit history and increase their chances of getting approved.
Loan officers who have the greatest chance of success in the market will create a hybrid process that integrates both technology and the human touch. Many millennials and young adults prefer to use technology throughout the mortgage process. However, since they are consulting a loan officer, they will want to talk to a human at some point to discuss this important decision.
According to Allied Market Research, the mortgage industry is expected to grow at a CAGR of 9.5% from now until 2031. This is an incredible opportunity for loan officers. The demand for mortgages will continue to grow, meaning that loan officers have a great chance of running a successful business and earning large commissions.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents of [Location] and the immediately surrounding areas as well as those who work in [Location].
The area we serve is populated mostly by the middle- and upper-middle class; as a result, they have both the need for loan officer services and the means to pay for it.
Customer Segmentation
[Company Name] will primarily target the following customer segments:
- Families: Families are the most common demographic looking for a new home. Therefore we expect most of our interactions to be with families who are looking for the perfect home to create memories in.
- Professionals: People in professional occupations have the income to get a mortgage and buy a home. Therefore we expect most of our target demographic will come from professional occupations.
- Young Couples: After young couples are together for a while or get married, they are ready to settle into a permanent home. This demographic typically doesn’t have an extensive credit history and is buying a home for the first time. Therefore, they have the greatest need for a loan officer.
V. Competitive Analysis
Direct & Indirect Competitors
The following firms are located within a ten mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Mortgage Officers
Mortgage Officers is a loan officer company that employs over twenty loan officers. These professionals come with a variety of backgrounds and expertise, meaning the company can help its clients thoroughly throughout the mortgage process. They help their clients through every step of the process, from having a detailed interview with clients about their credit history to thoroughly explaining the approval decision and what clients need to do next. Clients are never left alone during the process and are guided by experts every step of the way.
J.D. Mortgages
J.D. Mortgages is run by J.D. Smith, who has worked in the mortgage business for thirty years. He has considerable knowledge of the mortgage industry and the local housing industry which helps to serve his clients more effectively than most loan officers. He also brings an old-school charm, as he prefers to meet all his clients in person and fill out paperwork manually rather than on a computer. As such, he is particularly popular with elderly demographics who are in the process of getting a mortgage.
Alexa Bartholemew, Loan Officer
Alexa Bartholemew is a new loan officer that just opened up her office last year. Since then, she has gained a considerable clientele through her empathy, knowledge, and helpfulness. She has several great ratings online and has helped dozens of clients get approved for their mortgages. As such, she is expected to be a popular competitor in the local area.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is near the center of town, in the financial district of the city. It’s visible from the street with many working professionals walking to and from work on a daily basis; giving passersby a direct look at our firm, most of which are part of our target market.
- Client oriented service: [Company Name] will have a full time assistant to primarily keep in contact with clients and answer their everyday questions.
- Management: [Founder’s Name] has been extremely successful working in the mortgage sector and will be able to use his previous experience to grant his clients detailed insight into getting approved for a mortgage. His unique qualifications will serve customers in a much more sophisticated manner than [Company Name]’s competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows many of the local leaders, newspapers and other influences. As such, he will be able to build a large clientbase in no time.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Client-focused loan officer services, where the Company’s interests are aligned with the customer
- Service built on long-term relationships
- Big-firm expertise in a small-firm environment
Promotions Strategy
[Company Name] expects its target market to be residents living within a ten-mile radius. [Company Name]’s promotion strategy to reach these potential customers includes:
Website/SEO
[Company Name] will develop a professional website that provides information about the mortgage process, what we do, and how we can help our clients. It will also invest in SEO so that the company’s website will appear at the top of search engine results.
Social Media
[Founder’s Name] will create the company’s social media accounts and invest in ads on all social media platforms. The company will use targeted marketing to appeal to our target demographics.
Referrals
[Company Name] understands that the best promotion comes from satisfied customers. The company will encourage its clients to refer their friends and neighbors by providing discounts for new clients. This strategy will increase in effectiveness after the business has already been established.
Advertising
[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.
Publications
[Company Name] will place print advertisements in key local publications, including newspapers, area magazines, and local sport programs. Additionally, the Company will print brochures and place them in specific locations frequented by target individuals, such as premium stores and professional service providers.
Direct Mail
[Company Name] will use a direct mail campaign to promote its brand and draw clients, as well. The campaign will blanket specific neighborhoods with simple, effective mail advertisements that highlight the credentials and credibility of [Company Name] as a loan officer.
Pricing Strategy
[Company Name] will charge a 1% commission for each loan that is approved.
VII. Operations Plan
Functional Roles
In order to execute [Company Name]’s business model, the company needs to perform many functions, including the following:
Administrative Functions
- Bookkeeping
- Marketing
- Website maintenance
Service Functions
- Discuss finances and credit history with customers
- Find ideal loan options
- Fill out paperwork
- Discuss approval decision with customers
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [Founder’s Name] has been a certified loan officer for twenty years and has worked for several banks. His experience has given him the thorough knowledge and expertise needed to help all of his clients.
Though [Founder’s Name] is an experienced loan officer, he has never run his own company. Therefore, he will hire an experienced assistant to help him run the operations of the firm.
Hiring Plan
[Founder’s Name] will be the only loan officer for the company. He will hire an experienced assistant to help him with administrative duties. [Founder’s Name] may hire other experienced loan officers as the company grows.
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from the commissions earned off approved loans. [Founder’s Name] will charge a 1% commission for each loan.
The major cost drivers for the company include the lease, labor expenses, overhead, and marketing expenses.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $160,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $50,000
- Office supplies and equipment: $10,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of clients per month | |
|---|---|
| FY 1 | 10 |
| FY 2 | 15 |
| FY 3 | 20 |
| FY 4 | 25 |
| FY 5 | 30 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
