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