How to Make a Business Loan Proposal

By: Khieng Chho

Making a business loan proposal is like making standard loan documents. However, in a business loan proposal a lending company or a lender is expecting you to submit a written proposal in applying for the business loan. For this matter, you have the chance to show up all your promising and exciting aspects of your business as well as to prove that you are the right one for a loan.

For you to get the loan you always wanted, make sure that you know how to make the loan proposal. These are the proper steps to make one:

1. First, you make the cover letter with your proposal before submitting it. The cover letter should include a brief introduction of your company, the amount requested as well as the purpose of the loan.

2. The proposal should include the general information like the name and the address of the company as well as the Social Security records of the principals.

3. You must describe your current business in full detail. You should include all the facts from past and projected performance of the business and the legality of the ownership.

4. You musts present all the market facts. Identify your main competitor and you should explain how the business competes. Provide all the necessary details of your present customer base.

5. In preparing the management profiles from co-owners and employees, you emphasize their education, accomplishments as well as their qualifications.

6. Provide the necessary details concerning the performance of the operations from the last three years.

If your business is new, submit the projected balance papers and income statements. Also provide personal financial details from co-owners and statements on collaterals that will guarantee as a security for the asked loan.

7. Before finally submitting the loan proposal, proofread it and check for some grammatical errors contained in the document.

8. In submitting the proposal, don't forget to have a copy for yourself because it's important for future documentation.

Since you already know how to make a business loan proposal, always remember the following:

&bull Be honest and realistic. Don't ever boast your projected profits and be true about the difficulties your business has experienced in recent years.

&bull Make sure that all the required information are complete.

&bull Let your legal advisers and accountants check inconsistencies in your proposal.

Even though it doesn't require you to submit a loan proposal in some loan application process, you must be ready to have one.

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