How to Write a Bank Loan Proposal
When you are starting a business, acquiring start-up funding is an essential task. If you do not have sufficient capital saved but have a solid business plan that shows how your business will become profitable, a bank loan can make your business idea a reality. Banks want assurance that you can repay the proposed loan and that you have collateral or assets that could be used to pay off the loan if you default on it.
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Instructions
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Create an outline for your bank loan proposal so you know exactly what you need to include. Your table of contents should include a cover letter, an executive summary, a description of you and the company, your assets and collateral, your marketing plan, financial information, what the funding will be used for and a summary of your request.
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Write your cover letter. This is the first item that the bank loan officer will look at, and it's your opportunity to make a positive impression on the bank. The letter should introduce yourself, your company and what you are seeking for funding. Be clear and concise with your wording, and make sure your letter is written with a professional tone and is free of spelling and grammatical errors.
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Complete the sections of your proposal one at a time. Focus on providing details that will sway the loan officer in your favor. In the management section, for instance, highlight any previous entrepreneurial successes you have achieved, and include all professional and academic accomplishments for each member of your team. If you have advisers who are backing your idea, include that information as well.
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Show you have done your homework for the financial summary. Include industry information the bank may not be aware of, and highlight your company's potential in the marketplace. Your financial section should include a detailed analysis of how you plan to repay the loan and what the time frame for repaying the money will be.
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End your proposal with a strong recommendation summary. Essentially, you want the loan officer to see how strongly you believe in your business and how the loan will help you make your idea a reality. Reiterate the strengths of your team and the solidity of your business plan, and state clearly that you and your company are loan-worthy.
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References
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