How to Write a Bank Loan Proposal
A lack of funds dissuades some people from starting their own business. Banks have loan programs available, but you are required to submit a business plan that outlines the profitability of the business. By taking the time to complete a business plan, you show that you are serious about starting a professional business.
Construct a rough draft using your table of contents as a guide. Proofread the business proposal for errors and print. Use an ecru or white mid to high-level paper stock. The proposal for your bank loan should cover the following items:
- Cover letter: Serves as an introduction of you and the business to the bank. Write it in a professional manner and keep it brief but interesting. The other parts of the loan are your opportunity to get into specific details. The Executive Summary covers the business at its current state.
- Executive Summary: Write this portion last even though it appears after the cover letter in the table of contents. It is a summary of the information in the proposal. Include graphs if desired. Limit the summary to two pages or less.
- Business Description and Vision: List a brief history of the business or why you decided to start the business. This section includes the company’s vision, business goal and objectives.
- Definition of the Market: Define your target market and give a brief profile of your targets. Include the industry outlook for the business.
- Description of Products and Services: List the products and services you offer. Include information on what makes your business different than other businesses that provide the same type products and services.
- Organization and Management: Describe how the business is organized. This section licenses and permits you or other employees currently hold. Write a brief bio for the executive level employees.
- Marketing Sales and Strategy: Identify your market and explain the processes you use to attract customers.
- Financial Management: Depending upon the age of your business, use this area to show net worth. For business start-ups, include financial statements for principals on the loan and federal income taxes for the previous year. New businesses need to include projected balance sheets, projected income statements, and projected cash flow statements. Existing businesses need to include income statements and balance sheets for three years in addition to a 12-month cash flow statement.
- Closing Summary: Reiterate your business goals and why you feel you should be awarded the loan.