Business Loan Proposal Tips

Business loan is achievable depending on how you prepare since planning and preparation are the key success of getting business loan. This business loan is use for starting a new business, business expansion or business modification. The success of applying for the loan is in your hands on how you will provide information that needed by the lender.

Here are some tips on how to have successful business loan tips:

  • Prepare for the current business records if you have existing business.
    Lender will look at your business records such as business credit, tax returns, profit and loss report, balance sheet, current debts and business assets. If you plan to open new business or start-up loan, prepare for projected business records.
  • Make a Business Plan
    Every business needs a business plan to ensure that your business will be successful. It should provide information such as the money you need, business expenses and payback period. A business plan is a document which contains the details on how a business achieves its goals such as a written plan for marketing, financial and operational details.
  • Prepare for question about credit, collateral, and capital
    The lender will make sure that you have collateral when applying for a business loan. The lender will ask the asset that you will pledge to secure the loan. Also, they ask about your credit information.

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Restaurant Proposal Letter

September 25, 2008

Mr, Roland D. Walls
Island Bank
Ayala, Makati

Dear Mr. Walls,

I am Leonard L. Drakes who working as Head Chef for five stars hotel for 25 years and have acquired several training from different countries including Paris, France, Italy, Canada, Australia and among other. I am very passionate about different food of different cultures and would like to open up a restaurant.

My restaurant will be serving French and Italian cuisine mainly but along with it I will also hire of other cuisine such as Chinese in order to have variety of foods. The main target customer of my restaurant will be for families at very affordable price.

Attached herewith is my business plan. The estimated amount of loan required for this set up is $95,000.

I am looking forward of meeting your for further discussion.

Sincerely yours,

Chef Leonard L. Drakes

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Loan Proposal Format

Loan approval is depends on how you will present yourself as well as your business.  The lenders make it sure that you will repay your proposed loan and you have sufficient assets (collateral) in case the loan goes into default. It is your duty to give your lenders an assurance that you will be able to pay your loans. A well written proposal should be prepared to improve your chances of getting a loan. Your proposal should contain the following items.

Cover Letter – It should not more than one or two pages long.  Just give details how the loan will be used.

General Information – It includes the business name, names of owners, business address as well as Social Security number of each owner.

Business Description – Business nature and history should be included as well as the business age and number of employees and current assets. Also, the business structure must be included

Management Report – Have a short report regarding each owner such as their education, background, experience, skills and accomplishments.

Market Report – Classify your business product and business markets.  Cite your marketing strategy to compete with your competitors. Also, identify your prospective customers.

Financial Report – Include your balance sheet and income statement for the past three years, if your business is new, create your projected balance sheet and income statement. Present your personal financial statement as well as the other owners of the business. Finally, identify the collateral you are willing to guarantee as the security for the loan.

Photographs – Sometimes, it is necessary to include the interesting and attractive photos of your business such as product and equipment. You may caption some of the photos to tell the story what the lender want to know.

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