Executive Summary

The business loan proposal is your chance to convey your passion and knowledge of the business you own to the lender.

The business loan proposal is your chance to convey your passion and knowledge of the business you own to the lender.

Lenders look at a loan proposal as evidence that your business has strong management, experience, and a thorough understanding of the marketplace. 

The best way to start your proposal is with a simple and direct cover letter or executive summary.

Use this page to clearly and briefly describe who you are, your business background, the nature of your business or start-up, and how the loan will be used to help the company succeed.

Your loan proposal's first sentence should always be who you are and how much money you are requesting. Then, move into more basic information about your business:

• Business name
• Business entity structure (S-corp vs. C-corp, LLC, sole proprietor, etc.)
• Time in business
• Current annual revenue
• Current number of employees, if applicable

Let's not forget, you can dramatically improve your chances of getting a business loan if your loan proposal is powerful enough. If the lenders see you as a highly professional, organized, and serious business person, it will force them to pay attention.

Unfortunately, most small business owners prepare their loan proposals poorly, and that surely doesn't help their case since most lenders and bankers are incredibly risk-averse.

Keep following the pages of this template to craft a professional-looking loan proposal that will ensure all the right information is at the right place. 

The goal is to make you look organized, knowledgeable, and without red flags to any lender.

Business Model

Use this page to describe your business model or business profile.

The goal is to explain in detail exactly WHAT your business does.

How does it serve the customer?

To answer that question in the best way, describe your:  

• typical customer
• market base
• industry growth
• competition

Make sure you indicate how your business generates income.

This is especially important when a lender is looking to extend you credit and wants to feel safe about the probability of repayment.

Don't forget to include the history of your business, along with current activity and results. If you have any links to your brochures or cooperations, make sure to post them to this page as well.

However, while this proposal is a "sales" document, present facts, not marketing materials to your business profile, as loan proposals are all about "soft" selling.

Our Team

Use this page to describe the experience, qualifications, & skills of each owner and
a key member of your management team.

Tim Brown

Job Title

Use this space to include a short description of this member of your management team.

Jeremy Jones

Job Title

Use this space to include a short description of this member of your management team.

Amy Smith

Job Title

Use this space to include a short description of this member of your management team.

Mike Grant

Job Title

Use this space to include a short description of this member of your management team.

The management experience section should itemize your company’s management structure. This is a place for a good business plan to provide an organizational chart, a structure description, and salary forecasts.

The description should include each management position, the person in the position, their responsibilities, and their qualifications. If you have a Board of Directors, list them here as well, along with any experience relevant to your business’s success.

When you decide to write a business loan proposal, you should know that the lender will want to see the details of you and any business partners and management team you have.

Even if your business is a corporation and you have applied for business loans before, your personal information will be a subject of discussion with your lender.

It may seem a bit invasive at first, but anyone who has been through the funding journey knows exactly how you feel.

This means they need names, addresses, and contact information on any partners you have. Also, be ready to furnish tax returns, bank statements, and credit reports for the following pages. 

Now it is finally the time for your loan request and repayment options!

This section in the business loan proposal is all about the numbers. You need to clearly itemize why you need business financing, what amount you are requesting (both current and prospective for the next five years), and what you will use the amounts for.

Include quotes for equipment or supplies, building costs, etc. In short, it is all about being able to answer the question, “Why do you need that amount of money?”

Also, explain specifically what the loan will be used for and why it is needed.

Here is one way you can structure your funding request:

1. Your current funding needs.
2. Any future funding requirements over the next five years.
3. How you intend to use the funds you receive.
4. Any strategic future financial plans.

Loan Repayment

Next up, describe the terms you hope to receive (interest rate, term, etc.).

Repeat the loan amount you wish to receive and show the lender how you plan to repay it. Demonstrate this by referring to your cash flow projections, which you will carefully calculate based on your previous year’s cash flow reports and your current balance sheet.

Show how you plan to fit the new debt repayment into your current budget and indicate how the new loan will increase income to facilitate that repayment in the future.

Show how you can meet that repayment schedule based on sales and cash flow projections. Keep in mind that loan terms will need to be negotiated with your lender based on your business risk assessment.

Financial Statements

This is the section the lender will spend the most time looking at.

It should include:

• Copies of the tax returns for yourself personally and for your business.
• A personal financial statement for each of the managers of the business.
• Full financial statements for the business itself, preferably prepared by your accountant.

If there are any negative marks on your personal financial statement, or if there is anything about your personal finances that you need to explain, write a brief note at the bottom of your personal financial statement explaining it.
For example, if your parents pay for your housing, then let the lender know. It is good because it lets them know your monthly expenses are lower than they would otherwise be, reducing the lenders’ risk. And in the end, the name of the game is reducing lender risk to get your loan approved.

If your business is a start-up, show projected financial statements of cash flow and a pro forma income statement.

Don't forget about the equity investment!

An owner must put some of their own money into the business to get a loan; the amount depends on the type of loan, purpose, and terms.

Equity can be built up through retained earnings or by the injection of cash from the owner. Most lenders want to see that the total liabilities or debt is not more than four times the amount of equity.

Supporting Documents

Once you have done the hard part of writing the loan proposal, you are ready to gather the proof behind the story you have told. Remember to make it simple and straightforward for the lender to verify the information you have provided them, 

Along with the business loan request letter, you will need to attach this documentation to back up your claims:

• Business plan
• Balance sheet
• Profit and loss statement
• Cash flow statement
• Financial forecasting/projections

Be prepared for the lender to ask you for lots of other financial documents during your application process. They will need them to go a little deeper while they evaluate your profile and risk. But you should at least prepare these since they are the backbone of the business loan proposal.

Other potential documentation may include the following:

• Relevant real estate documents
• Principals’ resumes
• Tax returns
• Letters of intent to purchase from buyers
• Advertisement and marketing materials
• Relevant training certificates

Next Steps

Once the loan proposal is completed, consider doing the following:

• Make sure to proofread it and double-check for all requirements
• Get familiar with all the deadlines - from submission to the outcome
• If needed, suggest a follow-up meeting to discuss your application in person
• If your lender is likely to approve your business loan on the spot, add a digital signature box to your proposal