Why would a bank want a business to produce a business plan before agreeing to give a loan?

• A business plan shows the ability of the business to repay
• A business plan shows the planning a business made about tackling potential issues. For example, cash flow problems
• A business plan provides important business information. For example, if there is demand for a product
• A business plan shows what security the business has which can be used to support any loan. For example, security can be in the form of assets.