| Course | BUS 484 Entrepreneurship |
|---|---|
| Module | Module 6 |
| Paper type | Venture financing plan |
| Length | About 1,119 words, 7 pages |
| Format | APA 7 student paper |
| School | Aspen University |
| Program | Business Administration |
| Updated | October 2026 |
Free sample paper for BUS 484 Module 6
A Bucket Truck, a Chipper and $156,000: A Financing Plan for a Tree-Care Startup in Chattanooga, Tennessee
Student Name
Business Administration Program, Aspen University
BUS 484: Entrepreneurship
Instructor Name
Month Day, Year
A Bucket Truck, a Chipper and $156,000: A Financing Plan for a Tree-Care Startup in Chattanooga, Tennessee
Jake Morrison has worked for eleven years as a climber and crew leader for a contractor that clears trees along utility lines in southeastern Tennessee. He holds an arborist certification and has watched residential customers in Chattanooga wait weeks for tree removals after storms. He plans to start his own company, serving homeowners, homeowners associations and property managers with pruning, removals, stump grinding and storm response. The venture needs equipment that a crew cannot work without, and it needs money to survive until customers pay. This paper sets out how much he needs, where it will come from and whether the business can carry the cost.
What the Venture Needs
The heaviest purchases are a used bucket truck with a 60-foot reach, priced at $68,000, and a used chipper at $31,000. A stump grinder adds $14,000, a dump trailer $6,000 and saws, ropes, climbing gear and protective equipment $9,000, for equipment totaling $128,000. Insurance deposits, a business license, a website and initial advertising come to $8,000. Morrison also wants a $20,000 cash reserve to cover payroll and fuel during the first winter, when residential work slows. The total need is $156,000.
How New Firms Are Actually Financed
Popular images of startup financing center on investors and pitch competitions, but research tells a different story. Using the Kauffman Firm Survey, which followed thousands of businesses from their founding, Robb and Robinson (2014) found that new firms relied heavily on outside debt such as bank loans and credit lines, far more than on money from friends and family or on outside equity. Cassar (2004) found that startups with more tangible assets, which can serve as collateral, used more debt, especially long-term bank debt. A tree-care company fits this pattern well: most of its needs are trucks and machines that a lender can repossess and resell.
For smaller amounts, federal microloans of up to $50,000 are available through nonprofit intermediary lenders, which often provide business training alongside the loan (U.S. Small Business Administration, n.d.). These loans can pay for working capital, supplies and equipment but not for paying off existing debt or buying real estate.
Sources and Uses
The table shows how each source of money matches a use.
Morrison's own $37,000 is about 24% of the total, which signals commitment to lenders and keeps the debt manageable.
| Source | Amount | Use | Terms assumed |
|---|---|---|---|
| Founder's savings | $37,000 | $15,000 down payment on truck and chipper; trailer, stump grinder deposit and startup costs | No repayment; full ownership retained |
| Equipment loan from a regional bank | $84,000 | Balance of truck and chipper | 9% over five years, secured by the equipment |
| SBA microloan through a nonprofit lender | $20,000 | Remaining stump grinder cost, gear and part of the reserve | 8% over six years |
| Loan from Morrison's parents | $15,000 | Cash reserve | No interest, repaid over three years |
| Total | $156,000 | Equipment $128,000; startup costs $8,000; reserve $20,000 | Not applicable |
What the Debt Will Cost
On the equipment loan, $84,000 at 9% for 60 months produces a monthly payment of $1,743.70. The microloan of $20,000 at 8% for 72 months requires $350.66 a month. The family loan of $15,000 over 36 months without interest requires $416.67 a month. Together the three payments total $2,511.03 a month, or about $30,132 a year.
Morrison's projections, based on prices quoted by competitors and on the volume a two-person crew can handle, show first-year revenue of $310,000 and cash flow before loan payments of about $68,000. Dividing $68,000 by $30,132 gives a debt service coverage ratio of about 2.26, meaning the business would generate more than twice the cash needed for its payments. Regional banks commonly look for coverage of at least 1.25, so the plan leaves room for a weaker year.
What the Lender Will Look For
A regional bank reviewing the equipment loan will look beyond the coverage ratio. It will ask for two years of Morrison's personal tax returns, a personal financial statement and proof of the $37,000 he is investing. It will want evidence that the projections are grounded, so Morrison has assembled letters from two property management companies stating their intention to use his crew, quotes for the truck and chipper and a list of competitors' posted prices. The bank will file a lien on the equipment and may ask for his personal guarantee, which is common for new businesses and means his personal assets back the loan if the company cannot pay.
Options Set Aside
Equity investors were considered and rejected. A local tree-care company can grow steadily but is unlikely to produce the rapid, large returns that angel and venture investors seek, and selling a share of the company would give up control and future profits for money that lenders will provide against equipment. Crowdfunding was also considered. Mollick (2014) found that crowdfunding success depends on signals of quality and on the founder's social network, and that most funded projects deliver what they promise, though often late. Crowdfunding works best for products backers can preorder, such as games or gadgets. A service company has little to offer backers in advance, so the effort would likely raise little.
A larger SBA 7(a) loan was a third option. It could cover the whole amount in one loan, but the application takes longer and requires more documentation than an equipment loan, and Morrison wants to buy the truck before the spring season.
Risks and Safeguards
Borrowing creates fixed obligations that do not shrink when work does. Three risks stand out. A slow winter could drain the reserve; to guard against it, Morrison will offer discounted dormant-season pruning contracts to homeowners associations in the fall. An injury to Morrison, who is also the company's lead climber, could stop work entirely; he will buy disability insurance and train his second crew member as a climber within the first year. Damage to the bucket truck would halt the most profitable jobs; the equipment loan requires full insurance, and he has arranged to rent a truck from a dealer if repairs take longer than a week. Storm work after major weather events, which pays well, is treated as an upside and not counted in the projections.
Conclusion
Morrison's financing plan follows what research shows about real startups: substantial owner investment, debt secured by tangible equipment, a small government-backed loan for flexible needs and modest help from family. The combined payments of about $2,500 a month are covered more than twice by projected cash flow, and the plan names the risks that could change that picture. Equity and crowdfunding were set aside for reasons specific to this business, not by default. The plan is ready to present to a lender.
References
Cassar, G. (2004). The financing of business start-ups. Journal of Business Venturing, 19(2), 261-283. https://doi.org/10.1016/S0883-9026(03)00029-6
Mollick, E. (2014). The dynamics of crowdfunding: An exploratory study. Journal of Business Venturing, 29(1), 1-16. https://doi.org/10.1016/j.jbusvent.2013.06.005
Robb, A. M., & Robinson, D. T. (2014). The capital structure decisions of new firms. Review of Financial Studies, 27(1), 153-179. https://doi.org/10.1093/rfs/hhs072
U.S. Small Business Administration. (n.d.). Microloans. https://www.sba.gov/funding-programs/loans/microloans
What the BUS 484 Module 6 instructions ask for
Aspen's catalog says BUS 484 traces new ventures from the first idea to launch, and paying for that launch is a standard module topic. The Module 6 prompt in your classroom will set the specifics; this example interprets it as a financing plan for one venture. Start by stating how much money the venture needs and what it will buy, since lenders and investors judge requests against uses. Review the main sources of startup capital and what research says about how new firms actually raise it. Match each source to a use, ideally in a table. Show the cost of each source, including interest rates, monthly payments or the share of ownership given up. Test whether the venture can afford its obligations. Explain why you rejected the sources you did not choose, and finish with the risks and how you will manage them.
How the BUS 484 Module 6 example is put together
The paper starts with Morrison's eleven years clearing trees along utility lines and his plan to serve homeowners and property managers. A short review covers Robb and Robinson's work on the Kauffman Firm Survey, Cassar's study of startup capital structure and the SBA's microloan program. A sources and uses table lists $128,000 of equipment, $8,000 of insurance deposits, licensing and marketing, and a $20,000 cash reserve, paid for by four sources. Worked payments follow: $1,743.70 a month on the equipment loan, $350.66 on the microloan and $416.67 on the family loan. Projected cash flow of $68,000 a year gives coverage of about 2.26 times. Sections explain why equity and crowdfunding were set aside and how the plan handles a slow winter, an injury or a damaged truck.
Where the marks sit in the BUS 484 Module 6 rubric
When an instructor grades a financing plan, the questions are whether the capital need is justified, whether sources are realistic and correctly described, whether the arithmetic is sound and whether risks are addressed. This example ties every dollar requested to a specific use and every source to a specific use, leaving no doubt about which purchase each loan covers. Payment amounts are calculated with stated rates and terms, and the coverage ratio is shown with its inputs. Robb and Robinson's Review of Financial Studies article, Cassar's Journal of Business Venturing article, Mollick's crowdfunding study and the SBA's description of microloans are each cited where they shape a decision. Credit for judgment comes from the section on rejected options and from safeguards that answer specific risks rather than general reassurance.
BUS 484 Module 6 help from the desk
A common weakness in Module 6 papers is a funding request with no breakdown, such as asking for $150,000 to start a business. Show what each dollar buys. Another is listing every possible source, from angel investors to grants, without asking which ones fit the venture; a tree-care company is unlikely to attract venture capital, and saying why shows understanding. Check payment calculations with a loan calculator and state the rate and term you assumed. Include the founder's own money, because lenders expect it. Do not forget working capital; many startups budget for equipment and run short of cash in the first slow season. If you cite a government program, describe its terms from the agency's own page and avoid repeating figures from a blog, since loan limits and terms change and a wrong number weakens an otherwise careful plan.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Aspen University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
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BUS 484 Module 6 questions, answered
What does BUS 484 Module 6 usually ask for?
Aspen's BUS 484 covers financing a new venture in this module, so a plan that states the capital needed, compares sources and shows the venture can afford its obligations is typical. Follow your classroom instructions.
What is a sources and uses table?
A table that lists where a venture's money will come from and what it will be spent on, with the two columns adding to the same total.
What is debt service coverage?
The ratio of the cash a business generates to the loan payments it must make; lenders generally want it comfortably above 1.0 so payments can be made in a weak year.
Where can I find a free BUS 484 Module 6 sample paper?
The whole financing plan is shown above: a tree-care startup needing $156,000, with a sources and uses table, worked loan payments, a coverage ratio and the reasons other sources were rejected.
How large can an SBA microloan be?
The SBA describes microloans of up to $50,000 made through nonprofit intermediary lenders, which is why the plan uses one for working capital and smaller equipment.