How to create a good business loan proposal

Getting your loan proposal right is critical to its being approved, therefore what is required of you to do is to put a good loan proposal forward, once your loan proposal is right, then you will be increasing your chances of been approved. We would be taking a look at what a good loan proposal should contain

Business name and address: State your business name and address in your loan proposal as this will add some value to your request also the social security numbers principals should be included

Purpose: State the purpose of the loan and it should be clearly written out, what you intend doing with the loan; write out all the things you want to do with the money

Amount required. Make your that the amount of money you are asking for is not too low and it should not be ridiculously high.

Business details: Describe what your business is all about.

Organization Structure: State the ownership structure of the business

Management profile: Outline your business experience as well as accomplishments since your business experience will make lenders know you can repay the loan

Remember writing a good loan proposal is not complete without outlining a good business plan, lenders are also interested in your business plan as it will help in decision making. Your business plan should also contain company financial statement, because most lenders want to see this, make sure your business plan is solid, it should contain market information, financial information and business goals.

Market details should state the product and services that you provide and state why your business is unique. Also present a competitive market analysis that shows you have researched the market.

Financial information should reveals to lenders your company balance and income statement in the last three years as this will assist the lender to determine how stable your business is financially. Lenders are mainly interested in your cash flow statement, ensure that it is included and list all your business collateral; also your personal financial statement may be included.

Business Objectives: State your market strategies and how you go about them, since lender are only concerned about how you are going to repay the money, they want to be sure that you can meet up with payment, also lenders want to build a long time relationship with you.

Points to note

Your financial details might not be up to the requirement of the lender, but a loan could still be possible depending on your commitment to the project. Lenders want to be sure that you are investing your own money into the project as they will not provide you with 100% of the project cost.

When you put your own money into the business it shows commitment and when lender sees this in your proposal, they might take the risk and grant the loan to you.