When you seek a business loan, writing a letter to request the funds can help round out your business plan. If it accompanies a business plan, a letter written to request a loan is also called an executive summary. The goal of your letter is to assure a lender that you have the ability to repay the loan, have enough collateral in case you default on your payments and prove that lending you money involves little risk.
Head the letter. In the heading of your letter, include your address, the lender’s name and address, and the date.
Write the salutation. If you know the name of your lender or the lender’s representing agent, include it in your salutation. For example, write, “Dear Mr. Smith.” Otherwise, you can begin the letter with, “Dear Sir or Madam,” or “To Whom It May Concern.”
Tell the prospective lender about the amount you wish to borrow and the purpose of your loan. Be clear about the amount of money you need, as well as how you intend to use the money. For example, if you're starting a new business, you may need the funds to place a down payment on a property or piece of machinery you wish to purchase. In this section, also include the amount of money you personally have for your endeavor and other sources of funding, such as investors.
Write a mission statement. Tell the prospective lender about your business in a manner that's focused and direct. The Small Business Administration states you should include information about the type of organization you have, the date it started or the anticipated starting date, the organization's location and a description of the company’s facilities. Also include a brief history about the company, information about the products or services you offer and a summary of your plans for the company’s future success.
Explain how long it will take you to repay the loan and assure the prospective lender that you have the ability to make regular payments, including interest. Explain the type of collateral you have to offer and state its worth.
Provide a summary of any attached documents. Let the lender know that you provided additional information about your endeavor, such as a business plan, photographs or supporting documents so she knows about their purpose.