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How to Request a Bank Loan for your Small Business 
by kmhagen May 31, 2005

Loan proposal

Preparing a written loan proposal will also make you better prepared, and will improve your chances of getting the loan. Much of the information that goes into a loan proposal is information about your business and can probably be taken from your business plan. In addition to general information about your business, a loan proposal includes specific information about the amount and purpose of the loan you are requesting.

A well-written loan proposal should contain the following:

General information about your business

  • Business name, address, telephone numbers, names of ower(s) or partners
  • Nature of the business – a description of the line of business and activities
  • Ownership and legal structure of the business
  • History of the business – when it was started, any changes in ownership, growth and expansion
  • Evidence that your business has the necessary permits and licenses to operate in your line of business

Information about the management

  • Identification of key management, showing their background, experience, abilities, and qualifications, especially as they relate to the business (you may want to include personal resumes)

Market information

  • Clear definition of the products or services being offered
  • Principal targeted market (if yours is a niche market, you should describe it)
  • Main competitors
  • Marketing strategy
  • Competitive advantages of your business

Financial information

  • Balance sheets and income statements – actual, if your business has a history, and projected, if you are just starting
  • Cash flow statements (actual historical cash flow statements, if applicable, and projected cash flows, whether yours is an ongoing or start-up business)
  • Tax returns, for an ongoing business

Specific information about the loan request

  • Purpose of the loan - what it will be used for and why it is needed
  • Amount required
  • Term of the loan (short-term or long-term)
  • Collateral you are willing to pledge as security for the loan
  • Personal guaranties you are willing to provide



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