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Writing A Business Loan Proposal

In addition to standard paperwork, lending institutions usually require that the borrower submits a business loan proposal.

PRLog - Jun. 21, 2011 - In addition to standard paperwork, lending institutions usually require that the borrower submits a business loan proposal. Do not get frustrated but take it as a good opportunity to show the best aspects of your business. By writing the right  business loan proposal, you will prove to the lending institution that you are the ideal applicant for this loan.

As a first step, you have to present a cover letter, along with your proposal. This will serve as a brief introduction to your company, but be sure to state the amount of funding you request and the purpose of the loan. Start the proposal by giving some general information. Write your company's name and address and the names and social security numbers of all principals and then present a detailed plan on how you will use the financing. Describe the nature and history of your business and give information about your current assets, number of employees, age of your company, and other relevant details.

Be sure to include as much information about your business as possible. You should outline your prior and projected performance, the unique aspects of your project and business, and the legal and ownership structure of your company. You will stand higher chances of being approved if you give market information, identify your key competitors, and show how your business outdoes them. Describe the products and markets of your business. You should also provide information about your current customer base. Profile it and explain how your products satisfy your clients' needs.

If you are just starting out, you may want to present a projected balance sheet, together with a projected income statement sheet for a period of 3 years. If your company is an established one, present your financial statements - your balance sheets and income statements for the last 3 years. Remember to present the personal statements of each and every one of the principals. It is a good idea to come up with a brief statement on all principals. Describe their education, background, past accomplishments and experience. If the bank requires guarantees, you need to offer collateral as a proof you will pay back the loan.

If it feels like too much to gather the required information, you can hire a consultant to do this job for you. Define your business goals and objectives before you discuss your situation together. It is important to check your consultant's references. Ask them about expertise, timeliness, and experience. If you believe your consultant is a professional, ask him to prepare a project proposal. It is important to establish your expectations. Treat your consultant as if they were your employee. You should sign a written agreement that outlines the objectives, fees, and progress reports.

Even if a business loan proposal is not required by your lender of choice, it is a good idea to prepare one. By doing so, you will show to your bank that you are committed to obtaining the loan. Be honest with the creditor. It is easy to find out whether you have presented correct information.

Want to know more about small business loan proposal, go to this guide for help. http://www.yourloan.ca/loan-articles/small-business-loans/

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Loans Canada is dedicated to all types of loans available to Canadian residents and Canadian businesses.

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