Proposal Letter for Agriculture Loan

A proposal letter for an agriculture loan is a letter that is written by an individual or an organization that is seeking to invest in agriculture. It can be addressed to a financial institution such as a bank, a government body, that supports agriculture, or another organization or investor that provides loans to generate interest money. In this letter, the addressee makes a request for a loan, and explains, and convinces, about his intended motive for seeking the money.

People often seek a loan for investing in or expanding an agriculture business, as, often, people have the idea and the skills, but do not have the money to realize their plan. The loan can be sought from a financial institution, a government authority, or an investor.

For the purpose of seeking a loan, it is important to convince the lender about one’s expertise as well as the success chances of the business. A lender needs to know that his money will not go wasted and will be returned as per the payment schedule.

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To woo a lender, this letter is written, and is, usually, sent with a detailed proposal. It is also used by the person, seeking the loan, to market himself, and his idea. He needs to include the information in this letter, which would advertise his skills, and fulfill the requirements of the lender, as well the details present, should be convincing enough for the lender to grant him a loan. However, generally, the following details are included in such letters:

  • Date.
  • Details of the addresser.
  • Details of the addressee.
  • The proposal of the agriculture business, with all the relevant details and ideas.
  • The reason why the loan is needed.
  • State experience and expertise.
  • Convincing statements.
  • The total required capital.
  • Request for a loan.
  • Repayment schedule.
  • Attached are documents, if any.
  • Specify a date, if the money is needed till a certain date.
  • Show hope of a positive reply.

When this letter is received, it provides an additional tool for the lender to assess the borrower. He would gain an insight into the credibility and capability of the investor. If he gets satisfied, he will grant a loan on the conditions of the repayment, that suits him the best.

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Sample Letter

I am writing this letter to propose my agriculture business expansion, and to request you to grant me a loan for that.

I have been in the agriculture field for more than ten years. I believe I have gotten enough experience and expertise to expand my business. However, I do not have the required capital. I do not want to dilute the ownership of my business by seeking a partner and do not want to lose control by seeking an investor. Therefore, I want to request a loan.

The total amount needed is $[X]. I am attaching a detailed proposal with this letter, that also lists the components of this money. I have gone through the available options of the bank, and I would like to choose the five-year repayment schedule, with 7% interest. I am also attaching a detailed loan application, and a filled loan form, with this letter as well.

I request you to accept my application and grant me this loan soon. I have ordered some new machinery, and its payment is due on 5th October 20XX. I will be very grateful if you release the payment before that.

Looking forward to your positive reply and acceptance.

Thank you.

Proposal Letter for Agriculture Loan