Approval of your loan request depends on how well you present yourself, your business, and your financial needs to a lender. Remember, lenders want to make loans, but they must make loans they know will be repaid. The best way to improve your chances of obtaining a loan is to prepare a written proposal. A well written loan proposal contains:
- Business name, names of principals, Social Security number for each principal, and the business address.
- Purpose of the loan exactly what the loan will be used for and why it is needed.
- Amount required the exact amount you need to achieve your purpose.
- History and nature of the business details of what kind of business it is, its age, number of employees and current business assets.
- Ownership structure details on your company’s legal structure.
- Develop a short statement on each principal in your business; provide background, education, experience, skills and accomplishments.
- Clearly define your company’s products as well as your markets.
- Identify your competition and explain how your business competes in the marketplace.
- Profile your customers and explain how your business can satisfy their needs.
- Financial statements balance sheets and income statements for the past three years. If you are starting out, provide a projected balance sheet and income statement.
- Personal financial statements on yourself and other principal owners of the business.
- Collateral you would be willing to pledge as security for the loan.