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How to Write a Loan Proposal

by dynamaxbusiness

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Approval of your loan request depends on how well you present yourself, your business, and your financial needs to a lender. Remember, lenders want to make loans, but they must make loans they know will be repaid. The best way to improve your chances of obtaining a loan is to prepare a written proposal. A well written loan proposal contains:


General Information


  • · Business name, names of principals, Social Security number for each principal, and the business address.
  • · Purpose of the loan - exactly what the loan will be used for and why it is needed.
  • · Amount required - the exact amount you need to achieve your purpose. Business Description
  • · History and nature of the business - details of what kind of business it is, its age, number of employees and current business assets.
  • · Ownership structure - details on your company's legal structure.


Management Profile


  • · Develop a short statement on each principal in your business; provide background, education, experience, skills and accomplishments.


Market Information


  • · Clearly define your company's products as well as your markets.
  • · Identify your competition and explain how your business competes in the marketplace.
  • · Profile your customers and explain how your business can satisfy their needs.


Financial Information


  • · Financial statements - balance sheets and income statements for the past three years. If you are starting out, provide a projected balance sheet and income statement.
  • · Personal financial statements on yourself and other principal owners of the business.
  • · Collateral you would be willing to pledge as security for the loan.



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