Individuals or businesses often seek loans when they need extra cash. Banks are the best institutions to apply and seek loans from. However, when one is applying for a loan from the bank, he needs to fulfill all the formalities of the bank so that his loan application gets approved. To make a request for a loan from the bank, a bank loan proposal is used.
A bank loan proposal is a request document presented by the potential borrower of a loan to a bank in which he provides the important information required to apply for a loan. The details include the amount, reason and repayment of the loan. This document lays the basis of loan approval which not only makes it a critical paper but emphasizes the importance of thoroughness it demands.
A loan proposal serves as a marketing tool that may or may not attract the attention of the bank. Therefore, the presented information and how it is presented holds great significance. One must convince the lender that he needs the loan and the endeavor or business venture, for which the investment money is required, has high chances of success which in turn increases the probability of paying the loan money back.
The format of the proposal may be altered according to the applicant’s requirements. However, the main information contained in a bank loan proposal is the following:
When making a bank loan proposal, it is important to understand what will convince the lender to approve your loan so that the proposal can be designed on those lines. The presence of the following things can help improve the chances of approval of the loan request:
The proposal needs to be professional, formal and concise yet it should serve the purpose of providing all the required information. In addition, the information should not be misleading or incorrect and needs to be credible as well.
Through the bank loan proposal, if the bank gets convinced that the borrower deserves a loan, will pay it back and has a good credit history, it will approve and grant the loan. However, in the opposite scenario, the loan can be rejected as well. In that case, the borrower needs to have a backup plan to present his loan proposal to another bank. Sometimes, the borrowers present their proposals to various banks at the same time so that they do not have to reapply in the case of rejection.
Receiver: (Bank Name)
I have been working in the (industry) for more than (time period) holding position (employment position). In these extensive (number of years) I’ve worked in several markets, including (name of areas).
I started my career from (company name) as an (employment position) doing (responsibilities) for (number of years). Soon after that, I joined (Company name) in (Area) as a manager. I hold a Degree in (related field).
Since those early employment days, I had a dream to run my own (industry name). I believe I have gained enough experience and the time is right. I have successfully made many relationships and connections which will help me stand tall in the industry. With their massive support and help, I’ve created a sound and thorough business plan that takes things a step further from competitors.
The following proposal will give a general idea to you that why I need a loan and exactly how the amount will be used to help my startup.
At its core, (projected company) has (purpose). In (area) where there are many (company type) already established and working well, people are more interested in something unique and that stands out of the pack. By going through the proposal you will get to learn more about our plan and how it will help us attract most of the market customers.
My (company) is currently in the planning phase, with a probable opening date in (time period) from now. Our projected future plans include (future plans in bullets).
There are (number of investors) who are interested in my business. We all share experience in the same industry and so we are able to contribute something unique to the concept.
One of the investors (name) has (number of years) experience in (industry). His experience and expertise have helped us a lot in shaping our dream into reality. The other one (name) has in house experience and is willing to offer his services to us.
Our total projected budget for the (business) is (amount projected)
We are asking (financial institution) for an amount of (loan amount) as a loan. It will be repaid over (Number of years) at a rate of (rate) interest, making payments of (amount) (monthly/ semiannually/ yearly).
Personal and business financial statements of each of the investors have attached along.
Format: MS Word 2007/2010 [.doc & .docx]