How to Write a Business Proposal for a Lender

A proposal is necessary to secure business funding.

Securing funding for a new business can be a challenging process, particularly in difficult economic times. A business proposal is a crucial part of the funding process, and a successful document can be the deciding factor in whether or not you are granted a loan. As you prepare the proposal, take the time to conduct research and analysis to give more weight to your business idea and to convince lenders that you are a solid, professional loan candidate.

Instructions

1. Write an executive summary that gives a comprehensive overview of the market, the business and possible promotional activities. Use clear, concise language, and revise the summary until it is compelling and memorable; often, lenders use the strength of executive summary as a way to weed out unsuitable proposals. Include your most convincing data to persuade the lender that your business will be a profitable venture.

2. Tell the lender why you want to open the business. This section is much like a mission statement. Explain the need for the business or how it will fill a hole in the market. Use hard numbers to quantify the need or viability of your proposed company, if available. If geography will be a factor in the business' success, offer a brief explanation of how and why location will effect profits.

3. Describe the products or services that you will be selling. Focus on the company's unique selling point by explaining why it will be a success in the market. Include details about production, materials and features of your products or services. Give information about the facilities you will use, potential office space, and the team that will be providing the services or handling product development.

4. Analyze the market in which your business will operate. Give details about your target audiences, and explain why they are in need of the services or product you will provide. Provide economic data and statistics about consumer behavior. Talk about your competitors and why your proposed business will stand out from the crowd. Focus on trends in the industry and changing needs of consumers, providing hard numbers whenever possible.

5. Explain how you will promote the business. Because marketing is crucial to the success of a company, convince the lender that you have considered ways to get the word out to the audience. If you do not want to handle marketing on your own, hire a professional agency to draw up a quick summary of possible marketing activities for your business; having a professional behind the business idea can add strength to your funding proposal.

References

• Microsoft Small Business: How to Write a Business Plan
• Young Money: HOW TO WRITE A BUSINESS PROPOSAL