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How to Properly Write a Business Loan Request

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Have to submit a business loan request letter as part of your loan application? Not sure how to get started?

We don’t blame you. These kinds of letters aren’t as common as they used to be. While online lenders don’t usually ask for small-business loan requests, some traditional banks and credit unions still do. And if you apply for an SBA business loan (a loan backed by the US Small Business Administration), you’ll need a small-business loan request as part of your loan application package.

No matter which lender you’re applying with, this guide will help you write a strong business loan request letter―and to get the business loan you need.

How to write a business loan request letter

Start with the easy stuff
Write a brief summary
Add information about your business
Explain your financing needs
Discuss your repayment plan
Close the letter

1. Start with the easy stuff

Writing a loan request can feel overwhelming. After all, it’s not an everyday part of being a small-business owner. What do you say when applying for a bank loan? How do you write a business proposal for your loan application? What’s your lender even looking for in a business loan request letter?

That’s why we suggest starting your request writing process with the easy bits: formatting.

You’ll want to begin your business loan request with some pretty standardized formatting that includes your contact information, the date, your lender’s contact information, a subject line, and a greeting.

Typically, you’ll want to format the beginning of your small-business loan request roughly like this:

First and last name

Business’s name

Business’s phone number

Business’s address (this one is optional)

Lender name (or loan agent’s name and title, if you have one)

Contact information for your lender or loan agent

Subject line

Obviously you can simply plug in the relevant information for most of this. Easy peasy, right?

You’ll really only have to come up with your own subject line and greeting. But don’t overthink it. Something like this will work just fine for your subject line:

Re: [Your business’s name] business loan request for [loan amount]

Likewise, keep your greeting simple. “Dear [lender]” or “Dear [loan agent]” will do quite nicely.

Got all that? Then you’re ready to get into the actual loan request.

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2. Write a brief summary

Before you dive into the meat of your loan request, you should give a brief summary of your letter. Just write a short paragraph that says why you’re writing and what you want.

So you’ll probably want to include the following details:

Business name
Business industry
Desired loan amount
What you’ll use the loan for

No need to get fancy with this. You’re trying to condense the most important information into one or two sentences.

For example, your summary might look something like this:

I’m writing to request a [loan amount] loan for my small business in the [industry name] industry, [business name]. With this loan, [business name] would [describe your intended business loan use].

As you can see, you don’t need much detail here. You’re just giving the reader a quick overview of what’s to come.

And now that you’ve given them that preview, it’s time to get more in depth.

Remember, your lender isn’t here to grade your writing. Try to use good spelling, grammar, and punctuation―but don’t stress about crafting beautiful sentences.

3. Add information about your business

Your next section should add more detail about your business. You’ll want to include information like this:

Business’s legal name (if different than name used)
Business’s legal structure (LLC, partnership, S corp, sole proprietorship, etc.)
Business’s purpose
Business’s age (or date it began operating)
Annual revenue
Annual profit (if applicable)
Number of employees

Now, keep in mind that you’re not trying to give your reader an encyclopedic history of your business. Instead, you’re trying to show that you have a well-established business―one that’s solid enough to deserve a business loan. So focus on relevant details that show your business’s maturity.

You can keep this section as short as a few sentences or as long as a few (brief) paragraphs. Just make sure you leave plenty of room for the next two sections.

4. Explain your financing needs

After discussing your business, it’s time to explain why you need a bank loan.

That means you’ll want to offer some details about how you plan to use your business financing. For example, you can talk about the employees you plan to hire, the building you want to expand, or whatever else you intend to do with your term loan .

Take note, though, that you also need to explain why your loan request makes sense. Because your lender doesn’t really care that you want a loan―it cares whether or not it makes sense to lend to you. You need to convince your lender that you have a good plan for your loan―one that will make it easy to repay the money you borrow.

Try to answer questions like these as you write this section:

Why should your lender want to approve your loan application?
What happens to your business if you get your small-business loan?
What kind of growth will your business loan allow for?

Dig into your business plan and projections to find some good stats. Explain how hiring those additional employees will increase your revenue by a certain percentage or dollar amount. Break down how opening that add-on to your restaurant will allow you to seat a number of additional customers, and how much revenue you expect that to bring in.

The more specific you can get, the better. Because again, you’re trying to convince your lender that you’re borrowing as part of a thoughtful business plan ―not just because you want some cash.

And take your time with this part. In most cases, this section and the next one will form the meat of your business loan request letter.

As a rule, you should keep your business loan request letter to one page.

5. Discuss your repayment plan

By this point, your lender should understand what your business does and why a loan would help it grow. Now you need to prove to your lender that you can repay your small-business loan.

This doesn’t mean you have to show precise calculations breaking down your desired interest rate and monthly payment. (After all, your bank probably hasn’t even committed to a specific interest rate yet.)

Instead, talk about things like your business’s past finances, other existing debts, and any projections can you offer.

So if you have a profitable business, point that out, and discuss how that will free up cash flow to repay your loan. Offer summaries of profit-and-loss statements that show your business has been growing. Tell your lender how you’ll pay off that existing loan within a few months, so they don’t need to worry about it interfering with repayment of your new term loan.

Put simply, this is your chance to convince your lender of your creditworthiness. Especially if you have a slightly low credit score or some other concern, you want to use this section to show that you will absolutely repay your loan.

6. Close the letter

Finally, you can add a few finishing touches.

Usually you should close with a short paragraph or two that refers the reader to any attached documents (like financial statements) and asks them to review your loan application.

You may also want to include a sentence expressing willingness to answer any questions―or just saying you’re looking forward to hearing back.

Then end things with your signature, list any enclosed documents, and you’re done!

Well, sort of.

At this point, we strongly recommend you print off your business loan request letter and read it―out loud, if possible. This will help you catch any errors. Because no, your lender isn’t a writing teacher, but you still want to make a good impression.

Plus, if you make typos on something like your business name or desired loan amount, that inaccuracy could lead to confusion from your lender―slowing down your loan approval process.

Once you’ve proofread your loan request letter, you’re ready to submit it to your lender. With any luck, your thoughtful letter will help convince your lender to give you that loan you want.

Loan proposal letter template

So how do all those steps look when you put them together? Something like this:

First and last name

Business’s name

Business’s phone number

Business’s address (this one is optional)

Date

Lender name (or loan agent’s name and title, if you have one)

Contact information for your lender or loan agent

Subject line

Greeting

This first paragraph should summarize the rest of your letter. Keep it to just a couple sentences.

The next one to three paragraphs add more detail about your business. Include facts about its age, revenue, profit, employees, and other relevant information.

Then explain why you need financing and how you’ll use it to grow your business. This section can be a little longer (but remember your whole letter should fit on one page).

Next, talk about how your business will repay your loan. You may want to mention how financial documents show your business’s financial health, for example.

Finally, close with a short paragraph or two that list any enclosed documents and invite the lender to consider your loan application.

Printed name

List of enclosed financial documents

That’s not so hard, is it? With this basic business loan request letter template, you can easily write your own personalized business loan proposal.

The takeaway

So there you have it―that’s how to properly write a business loan request.

Get your formatting right, include a short summary, talk about your business, explain your loan needs, prove you can repay your loan, and close things off. (And don’t forget to proofread.)

We believe in you. You can write this thing.

And good luck getting your loan application approved!

Don’t just tell your lender you can repay your business loan―make sure you can with our business loan calculator .

What is a business loan request letter?

A business loan request letter is a written document that you provide with your loan application to help improve your chances of getting approved. Small business owners use it to report the amount of money they’d like to borrow. They also use it to detail how they’ll use the funds for their business and how they’ll repay the loan over time. All that information arrives alongside an explanation of why the bank should fund the business.

How to write a small business loan request letter

Your loan request letter is often the first thing your lender will look at after receiving your small business loan application. It’s how the lender will judge whether you’re eligible for a loan, so writing it correctly is highly important.

While there are many factors to consider when writing a business loan request letter, one thing to keep in mind is its length. Lenders typically use your letter to make snap judgments on whether to continue the review process. That generally means a longer letter may be one reason as to why your application might be rejected . The ideal loan request is usually a page long but packed with all the necessary details, as listed below.

1. Start with a header and a greeting

The top of your letter is reserved for basic identifying information and a subject line that includes your requested loan amount. Most loan request headers include personal details such as:

Your first and last name
The name of your business
Your business’s address
Your business’s phone number
The name of the lender or loan officer presiding over your case
That lender or loan officer’s contact information
A subject line that states you’re writing to request a loan and the amount you’re trying to borrow

Keeping a cordial tone throughout the letter can help leave a good impression on the lender. So beneath all the necessary information in the header, you should write a kind but formal greeting.

2. Write a brief summary

Start the body of your letter with a brief summary of why you’re writing it and the amount of money you’d like to borrow. Doing so typically means expanding on the information you provide in the header. Accordingly, you’ll want to include only a basic overview of your business while reiterating the amount you’d like to borrow and why.

While there’s more information here than in the header, you should still try and include only the most essential details. The summary section is meant to convince the loan agent to keep evaluating your application, so brevity is key.

3. Provide a basic overview of your business

There’s specific information that you should include as a part of the overview of your business, such as the following.

Your business’s legal name and any fictitious names for which you have a DBA
How your business is structured: Is it an S corporation or a partnership , or is it something else?
A description of the products or services your business provides
How long your business has been operating
Your current number of employees
Your business’s annual revenue (and profits, if applicable)

As with the sections above, keep this information concise so you don’t accidentally dissuade the loan agent from continuing to read. Additionally, make sure to cover the most unique aspects of your business so you can stand out among other applicants in your industry.

4. Add info on any partners, if applicable

It’s not just your business’s success that’s being evaluated. Lenders also put your personal finances and leadership abilities under the microscope to determine the likelihood of your business succeeding in the long term. So if you’re just one of many people who own your business, then it stands to reason that lenders will assess any co-owners as well. Add their info to the header alongside yours and include their finances in any revenue or debt calculations .

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5. explain how you plan to use your business loan funds.

While you may have briefly mentioned why you want the loan in previous sections, it’s here that you’ll go into detail. Explain how you’ll use the funds in as much detail as possible while remaining clear and concise. This section should demonstrate that you know what your business needs to increase its profitability. And that you have a plan in place to get there.

Remember that the lender's main goal during this process is to ascertain whether you’ll actually repay the loan. It doesn’t necessarily matter how you use the money as long as you back up your actions with a solid business plan.

To that end, try to be specific when stating the purpose of your new funds. A financial institution won’t approve a loan that simply lists wanting more working capital as the reason for their loan request. Some more acceptable examples of reasons for wanting additional funds include, but aren’t limited to, the below.

Purchasing additional commercial property
Funding more expansive marketing campaigns
Buying out shareholders
Hiring more experienced employees
Purchasing newer equipment
Moving your business operations to a new location

Note that this isn’t an exhaustive list of acceptable reasons to seek a small business loan. If you adequately explain any way that the funds will help your business grow over time, your application generally has a better chance of qualifying .

6. Demonstrate that you can repay the loan

Staying in line with the lender's desire to minimize financial risk, you must demonstrate your business’ ability to repay the loan. Essentially, this means proving that your company is financially healthy enough to make long-term monthly payments on the principal loan amount plus interest.

The financial information you provide to fill out the rest of the loan application will go a long way here, but further detail is typically necessary. For example, you could include a cash flow statement to show that your business is profitable. Or you could highlight your credit history to show that you’ve reliably paid current and past debts.

7. Add your concluding elements

Make sure to keep a cordial tone once you’ve reached the end of the business loan request letter as you include the following information.

A reference to your attached financial statements (usually about a paragraph long)
A final paragraph that formally requests that the lender review your application. You should also indicate that you look forward to speaking with them in the near future.
A signature
A list of all the documents you’ve included to complete your loan application

Examples of a small business loan request letter

Below are two examples of a small business loan request letter that you may use as templates.

Example small business loan request letter #1

Your First and Last Name [And the name of any company co-owners] Your Business’s address City, State, Zip Code

Name of the Loan Agent Loan Agent’s Title Name of the Agent’s Financial Institution Financial Institution’s address City, State, Zip Code

Subject: Small business loan request for [Amount]

Dear [Lender/Loan Agent’s Name],

I am writing this letter to request a small business loan of [Amount] to [Purpose of the loan]. My business, [Name of Business], is part of the [Type] industry and has proven to be a successful venture within its market.

Opening its doors in [Date] with [Number] of employees, [Business Name] has shown reliable, remarkable financial growth over the past [Number] of years. Structured as a [Legal structure of your business], [Business name] now employs [Number] individuals, with our annual sales revenue reaching [Number] last year. In addition, we’ve reached net profits of [Number, Include if your business is profitable], maintaining strong economic growth in the [Number] years since opening.

[Use this section to explain the reason for your loan request, for example]: We’ve observed an increasing number of customers coming into our storefront coupled with increased demand for [Your business’s product or service]. We wish to further capitalize on our success by expanding our current floor space, allowing more customers to purchase our [Product or service] at once. As a result, we request funding to afford [Name what you need] and continue growing our business with [Summary of your business plan].

The potential financial growth of our business is immediate, allowing us to fit repayments plus interest into our monthly budget easily. But we cannot currently produce a lump sum large enough to afford [Name what you need] in a reasonable timeframe. A loan in the amount of [Number] enables us to purchase [Name what you need] to capitalize on this growth opportunity and begin generating new revenue as quickly as possible.

We feel that [Business name] is of minimal financial risk to your bank due to our strong credit score of [Number] and positive finances. Attached to this application are our annual profit and loss statement and our most recent cash flow statement to help corroborate our excellent economic position.

Please take a moment to review this request letter and the accompanying financial documents. If you feel our company is a good match for your bank, we would love to hear from you.

Your Signature Your Printed Name

List of Enclosures: Business plan, cash flow statement, and P&L statement [plus any other documents that are part of the loan application]

Example small business loan request letter #2

Name of the Loan Agent Name of the Agent’s Financial Institution Financial Institution’s address City, State, Zip Code

Dear [Lender/Loan Agent’s name],

This letter is meant to request a loan of [Amount] for the express purpose of growing my business, [Business name]. It’s a [Type of business] venture that’s proven itself a successful provider of [Main product or service] since we opened our doors in [Date]. As an established name within our industry, and with a continually growing customer base, we would like additional funding to capitalize on our success by expanding our operation over the next [Time frame].

[Business name] is a [State your type of business entity ] catering towards [Type of clientele]. When we first opened our doors, we employed [Number] people, and in the [Number of years] since, that number has swelled to [Current number of employees]. Furthermore, our management team comprises [Describe each partner and co-owner] who ably [Detail each company leader's responsibilities] while managing employees.

With our current business strategies and team makeup, we’ve reached an annual sales revenue of [Number] and a net profit of [Number – only include if your business is profitable]. We plan to capitalize on our successes with new product initiatives that capture a wider range of clientele within our target market and any overlapping industries.

According to our business plan, any funding we receive would go towards [Explain what your company will use the money for along with any secondary goals]. We believe that our business will present minimal financial risk to your bank, with our credit history demonstrating our penchant for repaying debts on time. Additionally, after carefully assembling [Business name]’s most recent cash flow statement, we believe that our current revenue can easily cover an extra monthly fee plus interest.

In addition, our overhead is very flexible due to the operation of our business accommodating contract and freelance employees, lessening financial strain. This allows us to reliably remain on top of our debts even during tough economic times or if the funding provides fewer profits than anticipated.

We would like to take advantage of this growth opportunity as soon as possible and would appreciate it if you could take the time to review our request letter. Enclosed with the application are several financial documents that help corroborate [Business name]’s continued economic health. We’re more than happy to provide any other information you might need to decide on our loan.

When do you need a business loan request letter?

Generally, business loan request letters are only necessary when you apply for the below two types of loans.

Conventional bank term loans. Applying for a bank term loan requires you to meet that lender's particular requirements for eligibility. A loan letter is often one of those requirements. Banks are notoriously risk-averse, and your letter may help to show them that your business is financially stable enough to repay the loan.
SBA loans. Applying for an SBA loan requires you to meet prerequisites that are just as strict as for conventional bank loans, if not more so. Most SBA loan guidelines recommend including a loan request or similar cover letter-like document to support the financial information in your application.

While the above loans tend to require a loan request letter, other business financing options typically don’t. Such options include:

Loans from an alternative lender. These loans’ qualification criteria are often less strict than with traditional financial institutions. Some alternative lenders may only request your bank statements when you apply.
Equipment financing. Typically, with equipment financing, there’s less of a need to prove that your business is profitable. That’s because the equipment you purchase serves as collateral for the loan. If you can’t repay the loan, the lender may easily recoup their losses.
Business lines of credit. While the eligibility criteria for a business line of credit are similar to traditional banks in some respects, it doesn’t require as much documentation. Generally, getting one will only require your most recent bank or financial statement, not a business loan request letter.

Let SmartBiz® make the loan application process easier

While business loan request letters aren’t always required, they can be time-consuming when they are necessary. And if you’re applying for many loans, you might not have the time to write a loan request for every one. While writing from a template could work, knowing whether you qualify for a loan before you enter the bank may save you even more time. That’s where SmartBiz comes in handy. SmartBiz displays lenders in your area and compares their loan plans with your finances. Check now which loans you prequalify for * before you’ve even picked up an application.

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Mid aged business man in suit holding reading business loan letter

Business Loans
Posted on December 12, 2022
Kortney Murray

A business loan application process often requires numerous documents, one of which is a request letter. This letter is a significant part of your application as it is written to request financial assistance from the financial institution.

In most loan application cases, the success of your application process hinges on your ability to craft a convincing and professional business loan request letter. However, to do this, you need to know what the letter entails, the necessary information to include, and, of course, how to write one.

To help you with your application process, below we have compiled everything you need to know about writing a request letter for a business loan.

Loan document and agreement with pen for signing loan request letter

What Is A Business Loan Request Letter?

During your loan application process, whether you are getting a business loan for your beauty salon or trucking company, your lender or financial institution will request information from you. This information is to help the lender or institution trust you enough to know that you will be able to pay back their loan.

Many times, the request for this information comes in the form of a business loan request letter. A request letter is a formal letter or a document that is written to request anything from an official. It can be seen as a way of asking for a favor from officials.

In this case, a business loan request letter is a letter to the bank or lending institution that supports your business loan request. During the loan request review process, the bank underwriter will pay attention to the content of your business loan request letter to see if you deserve to get your loan approved.

In essence, your loan request letter is the difference between your loan being approved or refused. A loan request letter usually commits elements such as the loan amount requested, detailed planned use of money if disbursed, reasons why you think you should receive the funds, and a detailed description of how you plan to repay the loan.

The loan request letter is usually requested when asking for financial help in the form of a loan. This can be when you’re applying for a loan from a conventional financial institution or bank lender, or when you’re requesting a loan from the SBA ( Small Business Administration ).

In both cases, you are trying to demonstrate to the lender that your business can repay the borrowed amount, and you have a plan for using the loan when disbursed. Although loan request letters are usually a part of loan application processes, they do not necessarily need to be a part of every loan application process.

Some situations require loan letters, and some can do without them. Some situations that do not require loan request letters are:

Situations where you require a loan from specific lenders whose only concerns are your bank statement
Situations where you request a business line of credit and the only requirements are recent business financial statements
Situations where you request equipment financing and the equipment will be the collateral you need.

Regardless, writing a request letter for a business loan is an essential step to securing your loan. However, simply writing a letter is not enough. It is crucial to write an excellently detailed loan request letter that passes your message across quickly to the money lender.

What You Need To Know About Writing A Loan Request Letter

Many elements go into writing a loan request letter. These request letters are a form of well-documented proposal that accompanies other loan application documents, which is why they should convey specific information. When writing a loan request letter, your letter must have specific information. This information includes:

1. Basic Business Information

Money lenders and financial institutions do not give out loans to businesses or individuals who walk up their doorsteps. They do not accept and disburse loans without knowing who the borrower is. A detailed business loan request letter should begin with a proper introduction that communicates the borrower’s basic personal and business details.

It is a great way to not only break the ice but also get the lender to be familiar with you and know you’re genuine. The basic business information should include the following:

Your address
Your business name
Your business address
Name of the money lender or loan agent
Contact information of the loan agent
Requested loan amount
Current business project
Current annual revenue
Turnover of the previous financial year
Current number of employees

These details tell the institution all they need to know about you, your financial needs, and your business. Needless to say, all information given should be legal and up-to-date.

2. Purpose Of The Loan

What is the loan for? How does the lender know you will use the loan for the right things? After offering the basic business information, it is essential to the money lender your plan for the loan when approved. Approving a loan to a business (especially small businesses) is a considerable risk for many financial institutions.

It would be best if you showed the institution that you plan to use the loan for the right things. When talking about the purpose of the loan, briefly tell the lender how you plan to use the business loan. Be concise and professional, yet offer enough details for total insight.

Be persuasive enough to help the lender see your vision and show them you have what it takes to use the loan properly.

3. Provide Repayment Assurance

Before money lenders approve business loss, they want to ensure they receive their money and interest at the due date. Without proper assurance, they will be skeptical and might refuse to approve the loan for disbursement. After drawing out the purpose of the loan you are requesting, it is essential to detail how you mean to repay the money on or before the duration of repayment.

What are your plans to make back the money? How soon can you make money? Are there any risks that are expected? Still being persuasive yet professional, describe how you expect to pay the loan back. However, don’t just draw out a plan using words. Offer evidence to support your plan.

This will build your credibility and increase your chances of the loan being approved. Your evidence can include a business plan, personal finance and credit history (do you have bad credit? Here is all you need to know about getting a business loan with bad credit ), past business financial decisions and results, and any other relevant financial details.

As with any other letter, it is essential to close your business loan request letter. Your closing is your last chance in the letter to persuade the money lender to approve your application and agree on specific loan terms if possible. In the closing part, you can convey what approving the loan will mean to your business without sounding desperate.

Remain professional yet courteous at this point in your letter. The closing part of your business loan request letter is also an excellent opportunity to negotiate for specific terms, such as a certain interest rate or a longer repayment term. However, don’t just tender your requests.

Back them up with compelling reasons why the lender should take on these terms.

Laptop, small business and senior woman writing loan request letter

How To Write A Request Letter For A Business Loan

Now that you are familiar with the essential elements of a professional business loan request letter, it is essential to know how to write a convincing and successful request letter. Because your request letter plays an integral role in the success of your business loan application process, knowing the best way to write one is vital to your ability to win a loan.

Business loan request letters are usually about one page in length. However, they should be written professionally and in great detail.

1. Heading And Greeting

When writing a letter, it is a formality to have the heading and greeting first. The loan request letter is not left out. At the top of your business loan application letter, you are expected to leave a formal greeting and belief introduction of yourself. This is where the basic business information comes into play.

Begin by writing your name and contact information
Date the letter correctly (when the letter was written)
Include the name, title, and other important contact information of your loan agent
Include a subject line that states you are applying for a loan and the amount of loan you are applying for
Include a formal greeting.

Below is an example of a format for the heading and greeting section of your letter:

[Company/Business Name]

[Business Address]

[Lender Name]

[Lender Title]

[Lender Institution Name]

[Subject]:

Dear Mr/Miss/Ms./Mrs [Name],

At a glance, the heading and creating part of your letter will tell the lender what they need to know about your business and the type of loan you need.

2. Summary of Your Business Loan Request Letter

What do you need the loan for? The second step and the second element when writing a business loan request letter is to briefly tell your money lender what the purpose of your letter is, the type of loan you need, and the amount you want to borrow. The summary of your business loan request letter is usually only a few sentences short.

The length may vary from letter to letter as every request letter is unique. Regardless, it should be nothing more than a summary.

For example:

I am writing this to request a [kind of loan] loan in the amount of [amount] for the purpose of [purpose].

This is straight to the point but immediately tells the lender what you need and why.

3. Basic Information About Your Business

Following the summary of your business loan request letter, it is essential to tell your lender all they need to know about your business. To do this, you will provide basic information about your company. Although lenders want to know as much as they can about you and your business, they do not have the time to read pages upon pages of all information about your company.

They spend so much time processing other loan applications that a long introduction can be a big turn-off. So, instead of an entire file on your business history, write out the following:

Your business’s recognized, registered, and legal name
Your business’s legal structure (is it a sole-proprietorship company , partnership, or limited liability company?)
Years of operation or how many years you have been in business for
A concise description about what your business does or operates in
Your company’s annual revenue and profit
Number of employees

4. Description Of The Purpose Of The Loan

After offering the basic introductions, you must tell your lender why you need the loan. In this section, explain to your lender how you plan on using the loan when it is approved. Give them a great but brief insight on the plan and show them you have mapped out the use of the finances every step of the way.

For example, don’t just say you need to buy more stock. Instead, state what stock(s) you need, how much they are, how much you plan to re-sell, and how much revenue you plan to make back from this.

5. Show Your Ability to Repay the Loan

Show the lenders that you are more than capable of repaying the loan given by including several documents that show your current financial ability. Highlight your credit history and present financial disposition using financial statements such as:

Summaries of up-to-date profit-and-loss or balance statements. This will show the lenders that your business is growing
Schedules to show repayment plan for other outstanding debt that your company might owe to other lenders
Future cash-flow projections . This will show your budget for the repayment terms and your ability to pay back.

6. Concluding Elements

As with any other kind of letter, you need to end your request letter with a concluding part. This concluding part should include several elements, such as:

A final paragraph that refers the lender back to your attached documents and financial statement
A paragraph persuading the lender to review your package
A sentence showing the lender that you anticipate speaking to them soon
Your signature
A list of all included documents.

Sample Of Business Loan Request Letter

ABC Crescent Street

Miami, FL 12345

Jan. 1, 2022

Jack Stephen

Senior Loan Officer

678 Spring Road

Florida, FL 67890

Re: Small business loan request for $350,000

Dear Mr. Stephen,

I am writing this to request a small business loan of [input loan type] of $150,000 for the purpose of [input your purpose of the loan]. 123 Movers is a successful business that is well-established in the transportation and shipping industry. Our success is recounted on our official website [input website URL].

123 Movers started operation in April 2018 in one location with just [input number] workers and [input number] trucks. Serving local and international clients, we have grown consistently over three years and now have over [input number] with [input number] of trucks in our services.

Last year, our annual revenue totaled $1.2 million—[input more information about the growth of the business]. To promote our growth, increase efficiency, and improve the quality of our services, we plan to hire more staff and expand into new market sectors.

We request a [input loan type] to continue our expansion efforts and supplement our growth as a business. [Input more reasons/purpose for the loan application]. A loan in the sum of $350,000 will enable us to [state how the loan will help your business in this paragraph].

Attached below, please find our recent financial statements and our business plan for your review. I have also attached other necessary documents [state documents] to highlight how strong our financial disposition is. With a credit score of [input credit score], we are confident in our ability to adhere to the necessary loan terms.

Thank you for reviewing our letter and the attached financial documents. I look forward to a favorable response from you at your convenience.

John Doe [signature]

John Doe, Owner

123 Movers.

Perfecting The Art Of Writing Business Loan Request Letters

Writing request letters for business loans can be an intimidating process, especially if you have no practice doing so.

However, all you need is a few trials, and you will undoubtedly master the art of writing business loan request letters like a pro. Request loan letters are essential in many loan application processes, which is exactly why you need to put your best foot forward while writing.

Optimize your letter by including the necessary documents, highlighting your best assets, and following the proper format mentioned above. Include a header and greeting, a concise description of your request, your business’s basic information, a description of the purpose of your loan application, your ability to repay the loan, and a proper concluding element.

Although mastering the art of writing business loan request letters is one of the many steps in making sound financial decisions for your business, the first step begins with finding a financial company dedicated to offering the solutions you need. With relationships with over 150 different programs and an aim to maximize your business’s growth, we at Coastal Kapital offer innovative financial solutions to business owners with all credit types.

From equipment leasing to merchant processing, collateral asset and real estate-backed funding, we have all you need to grow your business. Contact us at 866-670-7483 to discuss your financial options!

Sample Application Letter For Lending Company: Free & Effective

As someone who has crafted numerous application letters for various lending companies, I have gained a unique perspective on what it takes to create a compelling and successful application.

Key Takeaways

Understand the Purpose : Learn why a well-crafted application letter is crucial for loan approval.
Gather Information : Know the necessary details to include in your letter.
Structure Your Letter : Follow a clear and professional format.
Personalize Your Approach : Tailor the letter to the specific lending company.
Highlight Relevant Information : Emphasize your financial stability and repayment capacity.
Proofread and Edit : Ensure your letter is free of errors.
Use a Template : Adapt a provided template to your needs.

Navigating the world of finance and loans can be daunting. Whether you’re applying for a personal loan, a mortgage, or a business loan, the application letter you submit is a critical component of the process.

It’s your chance to present yourself as a credible and trustworthy borrower. Drawing on my extensive experience in writing application letters, I will outline a straightforward approach to crafting a letter that stands out.

Step-by-Step Guide

Step 1: understand the purpose.

Your application letter should succinctly convey why you’re seeking the loan and how you plan to use it. It’s also your opportunity to make a personal connection with the lender and demonstrate your financial responsibility.

Step 2: Gather Necessary Information

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Before you start writing, gather all relevant information. This includes:

Personal details (name, address, etc.)
Loan amount and purpose
Employment and income details
Financial statements and credit history

Step 3: Structure Your Letter

A well-structured letter is key. Generally, it should include:

Introduction : Briefly introduce yourself and state the purpose of the letter.
Body : Detail your financial situation, loan purpose, and repayment plan.
Conclusion : Summarize your request and express gratitude.

Step 4: Personalize Your Approach

Research the lending company to understand their preferences and tailor your letter accordingly. This shows that you’ve put thought into your application.

Step 5: Highlight Relevant Information

Focus on what’s most important: your ability to repay the loan. Highlight stable income, financial discipline, and a solid credit history.

Step 6: Proofread and Edit

Ensure your letter is free from grammatical errors and typos. This reflects your professionalism and attention to detail.

Step 7: Use a Template

A template can be a great starting point. Here’s a basic structure:

[Your Name] [Address] [City, State, Zip] [Email Address] [Phone Number] [Date]

[Lender’s Name] [Company Name] [Company Address] [City, State, Zip]

Dear [Lender’s Name],

[Introduction – Introduce yourself and state the purpose of the letter.]

[Body – Discuss your financial situation, the purpose of the loan, and your repayment plan.]

[Conclusion – Summarize your loan request and express thanks.]

Sincerely, [Your Name]

Tips from Personal Experience

Be Concise : Lenders appreciate brevity. Keep your letter to one page.
Be Honest : Don’t exaggerate your financial situation. Honesty builds trust.
Customize for Each Application : Avoid using a generic letter for all applications.
Use Professional Language : Maintain a formal tone throughout your letter.

Conclusion and Comment Request

Writing an application letter for a lending company doesn’t have to be overwhelming. By following these steps and using the provided template, you can create a letter that effectively communicates your needs and financial stability.

I’d love to hear your thoughts and experiences with loan applications. Please leave a comment below with your insights or questions!

Frequently Asked Questions (FAQs)

A professional office setting with a person sitting at a desk, writing a letter on a laptop.

Q: What is a loan application letter?

Answer : A loan application letter is a formal document submitted to a financial institution or lender to request financial assistance in the form of a loan. It typically outlines the purpose of the loan, the amount requested, and provides relevant personal and financial information.

Q: How do I start writing a loan application letter?

Answer : To begin writing a loan application letter, you should start with a formal salutation, such as “Dear [Lender’s Name]” or “To Whom It May Concern.” Clearly state the purpose of your letter and introduce yourself by providing your name and contact information. Mention the specific loan product or program you are applying for and express your interest in obtaining the loan.

Q: What information should be included in a loan application letter?

Answer : A loan application letter should include your personal information, such as your full name, address, contact details, and social security number. It should also provide details about the loan, including the loan amount, the purpose of the loan, and the desired repayment term. Additionally, include information about your employment, income, and any collateral you may offer.

Q: Why is a loan application letter important?

Answer : A loan application letter is important because it serves as your formal request for financial assistance. It provides lenders with essential information about your financial situation, creditworthiness, and the purpose of the loan. The letter allows lenders to assess your eligibility for the loan and make an informed decision regarding your application.

Q: How should I structure my loan application letter?

Answer : A well-structured loan application letter typically consists of an introduction, body paragraphs, and a conclusion. In the introduction, state the purpose of the letter and provide your personal information.

The body paragraphs should focus on explaining the reason for the loan, your financial background, and any supporting documents or references. Conclude the letter by expressing your gratitude and including your contact information for further communication.

Q: What tone should I use in a loan application letter?

Answer : When writing a loan application letter, it is essential to maintain a professional and formal tone throughout the document. Use polite and respectful language, and avoid using any slang or informal expressions. The tone should convey your seriousness and commitment to repaying the loan.

Q: Can you provide tips for writing an effective loan application letter?

Answer : Certainly! Here are a few tips for writing an effective loan application letter:

Clearly state the purpose of the loan and be specific about how you intend to use the funds.
Provide accurate and detailed information about your financial situation, including your income, assets, and liabilities.
Use a professional tone and proper grammar and spelling.
Highlight any relevant qualifications or experiences that may enhance your credibility as a borrower.
Explain how you plan to repay the loan and provide supporting evidence of your ability to do so.
Include any additional documents, such as bank statements or tax returns, that can support your application.
Proofread your letter thoroughly to ensure it is error-free and presents your case effectively.

Q: Is it necessary to include supporting documents with the loan application letter?

Answer: Yes, it is advisable to include relevant supporting documents with your loan application letter. These documents can vary depending on the lender’s requirements and the type of loan you are applying for.

Commonly requested documents include bank statements, tax returns, pay stubs, identification documents, and proof of assets or collateral. Including these documents demonstrates your financial stability and helps lenders make an informed decision.

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How to Write a Loan Application Letter

Table of Contents

Sometimes, taking out a loan can become inevitable. Whether dealing with piled-up medical bills or a financial emergency, it’s common to turn to fast and convenient borrowing options. According to statistics, advances and loans accounted for more than 60% of bank assets in the European Union in 2021.

If you wish to take out a loan, you’ll have to fill out a loan application or request letter that details what you need the money for and how you’ll use it. The best way to appeal to a lender is by using a convincing tone and showcasing a clear plan for the money. Keep reading as we look at ways you can achieve this and ensure that your loan is granted successfully.

What is a Loan Application Letter?

A loan application letter is a typed or handwritten letter provided to your lender, helping them decide whether to approve your loan request. This letter is written when the borrower is seeking financial assistance from a lender to pay off some bills or other expenses.

When Do You Need One?

You might require a loan application letter in the following financing situations:

When you wish to borrow money from the SBA (Small Business Administration) since it recommends and encourages applicants to start their loan proposals with an executive summary or a loan application letter
When a borrower opts for a loan from a conventional bank lender and has to demonstrate that their business is financially viable and experiencing growth

In some situations, you aren’t required to write a loan application letter. These include scenarios like when a borrower is seeking equipment financing and said equipment serves as collateral, when someone requests a business line of credit with business bank statements or financial statements, and when a borrower seeks a term loan online using alternative lenders who want to go over your recent bank statements.

Essential Loan Application Elements

There are specific guidelines you need to follow when writing a loan application:

1. Header and Greeting

Whether you’re filling out a loan application letter for a personal or business loan, it’s crucial that you start with a header and greeting. Include several sentences that outline the necessary, accurate details of your loan request in the header. If you’re opting for a business loan, then you need to include the following details:

Company name
Company phone number
Company address
Loan agent or lender’s name and title
Loan agent or lender’s contact details
A subject line stating the desired loan amount

Follow this by incorporating a greeting right below the header so that you introduce your application with a friendly tone.

2. Loan Request Summary

You will have to provide your lender or loan agent with an overview of your loan request in this section. Ensure this section is concise, detailing only crucial information that’ll enable the lender to reach the letter’s body quickly. Entrepreneurs applying for a business loan should state why they are trustworthy borrowers, basic business details, the ideal loan amount, and the use of the loan.

3. Basic Business Details

It would be best if you started by making a clear loan request which includes the amount you wish to borrow. When you write a few sentences about the workings of your business, they should include the following information:

The legal business name
Any DBA used by the organization
The amount of time the business has been operating
The business structure
Number of employees
An overview of what the company does
Profits and annual revenue, if applicable

Once this is done, you can move on to the next step, which is explaining why you need a loan. Don’t also forget to outline how you plan to repay the owed amount if the lender grants the loan.

4. Loan Usage

Every lender’s goal is to minimize risk as much as possible, so don’t be surprised if they carefully scrutinize your application before deciding whether to accept or disapprove it. They will assess whether you can pay back the loan entirely on time. Make a solid outline of how you intend to use the loan and why granting you the funds is a wise investment. It’s essential to inform the lender that you have clear goals you will accomplish if the loan application is approved.

5. Proof of How You’ll Pay Back the Loan

In order to show your company’s financial health, you’ll need to use figures from the latest balance sheet or income statement. These records are essential because they demonstrate that you can repay the loan.

Additionally, you must include any additional business finances to prove you’re a low-risk investment. State down any existing debt and a schedule detailing how you’ll pay it back if you owe someone else money. Perhaps, you’re a new business, but profits are stable. In that case, ensure you mention this, as it proves your ability to repay the loan.

Once you achieve this, you can add a particular cash flow prediction to give the lender an idea of your payback plan, including the principal and interest amount.

6. Give Accurate Information

There’s no doubt that lending money is a risky investment. You can make your lender’s life easier by providing factual and correct details to ensure both parties agree with the terms of the deal. For example, include your accurate credit history. If you are dishonest during the loan application process, you will be considered a fraud, and there will be repercussions for your actions.

Tips for Writing a Loan Application Letter

Before sending a loan letter request, check your business and personal credit scores and whether you need to take specific steps to improve them
Provide transparent, genuine, and concise explanations
Ensure all information is factual and relevant
Keep all your financial statements ready, such as business balance sheets, cash flow statements, PSL statements, etc
Submit every relevant credential with your loan application request letter
Include the date, time, method, and manner you’ll use to make your payment
Avoid writing a letter that is unnecessarily wordy and long
Follow the rules available online on writing formal letters, so you don’t use an informal tone while assembling your loan application letter
Whether including your business’s current assets, liabilities, or financial health, don’t jot down false information that can get you into legal trouble.

Loan Terms and Penalties

If you fail to pay your loan on time, cancellation fees or penalties may apply that depend on the number of days you’re overdue on the payment. For example, if you’ve looked into how to get a title loan with a lien , you know that your car will be used as collateral. In case you default on payment or provide false information, you are likely to lose ownership of the vehicle.

You should go through the loan terms and conditions as this will enable you to determine how many days your payments can be delayed, how much penalties are for late payments, and the amount you’ll be charged if you cancel your loan. Choosing a loan provider that offers the lowest and most amenable terms is recommended.

Whatever reason you have for acquiring a loan, writing a solid loan application letter will improve your chances of obtaining the financial help you need. This application letter should be composed in a polite, convincing tone and include accurate information. You can do thorough research to pick a lender whose provided options align with your requirements. Consider beforehand how much money you need and apply for the relevant loan.

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Published In: Applications

How to Write a Loan Application Letter (with Samples)

Sometimes we need financial assistance to push through with our business idea, education, medical emergencies, or any other personal project or goals that require a huge amount of money for its realization. Basically, it is for this reason that banks and other money lending institutions exist.

Applying for a loan from any lending institution requires the applicant to first fill out a form. Along with this form, the applicant can attach a loan application letter that provides more details on what he/she intends to do with the money and an overview of how the loan will be paid.

As a loan applicant, you need to learn how to write the loan request letter in a polite and convincing tone to appeal to your lender for your loan to be granted successfully.

What is a Loan Application Letter?

A Loan application letter is a document that informs the financial lending institution of the amount of money you are asking for, a clear outline of what you intend to do with the money, and convinces the bank why you are a good investment risk. Because it is a request, a loan application letter should be written in a polite tone, short and to the point.

The Loan Application Process

Based on the financial institution you choose, the process and time it takes for you to receive funding may vary. However, the typical loan application process may take on the following critical stages:

Pre-qualification stage

Prior to the loan contract, the potential borrower receives a list of items that they need to submit to the lender for them to get a loan. This may include Identification proof, credit score, current employment information, bank statements as well as previous loan statements.

Immediately this information is submitted, the lender reviews the documents and makes a pre-approval- meaning the borrower can move on to the next phase of the loan application process.

Loan application

In the second phase of the loan origination process, the borrower fills-in the loan application form either electronically- through mobile apps, websites, or paper-based. The data collected is then tailored to specific loan products.

The aspects that are included in the loan application form include the following;

The payment method- if it will be personal, through a check, or via online banking.

The payment frequency- There are several payment frequency methods, for example, Monthly installments, annually, or if the loan will be paid once.

The amount of interest accumulated on the loaned amount. This is the amount of money charged by the lender to the borrower on top of the amount which he/she has loaned.

The assets in the form of properties of the borrower will serve as collateral damage/guarantees in case the borrower defaults loan repayment or is unable to make his payments as per the agreed time.

Application processing

Once the application is received by the credit department, it is reviewed for accuracy, genuineness, and completeness. Lenders then use Loan Originating Systems to determine an applicant’s creditworthiness.

Underwriting process

This process only begins after an application is totally completed. In this stage, the lender checks the application in consideration of various accounts, such as an applicant’s credit score, risk scores, and other industry-based criteria. Today, this process is fully automated using Rule Engines and API integrations with credit scoring engines.

Credit Decision

Based on the results from the underwriting phase, the lender makes a credit decision. The loan is either approved, denied, or sent back to the originator for additional information. If the criteria used do not match with what is set in the engine system, there is an automatic change in the loan parameters, for instance, reduced loan amount or a different interest rate on the loaned amount.

Quality Check

Quality check of the loan application process is very critical since lending is highly regulated. The loan application is then sent to the Quality Control Team to analyze critical variables of the loan against internal and external regulations on loans. This is often the last step of the application process before funding is approved.

Loan funding

Once the loan documents are signed by both the borrower and the lender, funds are released shortly after. Nevertheless, business loans, loans on properties, and second mortgage loans may comparatively take more time to be approved due to legal and compliance reasons.

Essential Elements of a Loan Application Letter

Now that you have already understood the complex loan application process, it is important that you know the critical points to include in your loan request letter to convince your lender to give you a business loan.

Here is how to effectively write a loan application letter:

Header and greetings

The first and most important element of your business or personal loan application letter should be a header and an appropriate greeting.

In your header, include the following details:

Your business names
The physical address of your business
Business telephone and cell phone numbers
Lender’s contact details
Lender’s or Loan Agent’s Name and Title
A subject line stating the loan amount you are requesting for.

Once you have written your header, include a friendly but professional greeting to start off your loan application letter in a cordial tone.

Business Loan Request Summary

The body of your business or personal loan request letter should start with a brief summary of your loan request amount, why you need the loan, your basic business information, and why you are an ideal risk investment for the lender. This section should be brief and concise. Only include the relevant information to capture your loan agent’s interest and keep them reading the body of your loan application letter.

Basic Details about your Business

Ideally, this is the third paragraph of your loan application letter. Use a few short and concise sentences to give a clear outline of your business.

Be sure to include the details below:

The legal name of your business and any DBA that your business uses
Your business structure- if it is a corporation- partnership, individually owned, etc.
A summary of what your business does.
How long your business has been operational
Total number of employees
A brief description of your current annual revenue

Once you have provided your basic business information, it is time to write the meat of your business loan request letter- clearly explaining why you need the business loan and how you intend to recuperate the investment.

The purpose of the business loan

In the fourth paragraph of your loan application letter, explain succinctly how you will use the business loan. Additionally, tell the lender why your intended use of the business loan will be a wise business investment.

While detailing this section, be as specific as possible and demonstrate to the lender that you have carefully considered the kind of revenue generation this new debt will accomplish for your business. for instance, don’t just say that you intend to use the loan for working capital. Rather, say that you plan to increase your inventory by 45% or that you need to increase your Human Resources to 4 to generate more income by 6%.

In the same paragraph, inform the lender exactly how the loaned amount will help generate more profits necessary to cover repayment plus the interest accumulated on loan.

Proof that you’ll be able to fully repay the loan

In this section, you need to demonstrate to the lender that you can pay back the loaned amount together with interest as per the agreed repayment period. You will want to use any figures from your latest income statements or balance sheets to prove your business is financially healthy and that it is a low-risk investment decision for your lender. In case you have other existing debts, be sure to mention them and include a business debt schedule if possible. If your business is profitable, highlight that in your letter since it something that most lenders pretty much look for in successful loan applicants.

In addition to that, consider including specific cash flow projections to demonstrate to your lender how you plan to fit repayment of the loaned amount plus interest into your budget.

Sample: Loan Application Letter

Sample 1: business loan application letter.

Samira Mitchell,

Mitchell Face Masks Limited,

4680 Forest Road

939, New York.

January 17, 2021

Mr. Wesley Kingston

Guarantor Trust Bank

679, New York State

Ref: Loan Request for $10,000

Exactly two years ago, I started my small face mask vending business in our local market. Over the last two years, my business has picked up really well to an extent where I need to expand to a bigger face mask vending company.

It is for this reason that I am writing this letter. I am confident that there is a great market niche for face masks, especially due to the current worldwide Novel Covid-19 Pandemic. Thus far, I have had many repeat customers, new customer links through referrals, and my client base has grown rapidly. Generally, there is an increase in demand for my products; therefore, I am requesting for a loan amounting to $10,000 to be able to supply more and satisfy all my clients.

This money, along with the amount that I have saved up from my profits, will enable me to lease a large, modern storefront and to import supplies that will help me launch my business plan.

I have attached my business plan, my latest business balance sheets, current business schedules, as well as my credit history statements for your perusal and review. If you have any questions or need any further clarifications, please contact me directly on (111) 345 679 or email me at Mitchel.facemasksltd.co.ke. Thank you for your consideration.

Samira Mitchel.

Sample 2: Personal Loan Application Letter

Dear Michael,

It is common for everyone to face difficult situations and bitter realities in life. I am currently facing a situation where everything seems bleak, and there seems to be no way out of this difficult situation. I am in debt, and I need to pay at least 30% of my house’s mortgage will be taken over by the bank, and I am currently ailing and weak, I’ll not be able to survive such a nervewrecking situation.

The only way I can avoid such a fate is by paying the full amount that is needed by the bank. I can be able to do so if I am allowed to take out a loan from the office, which is a privilege that the company has granted to all the employees. I would be thankful if the company allows me to borrow the money against my monthly pay.

Mr Brandon Brown

Do’s and Don’ts of Writing a Loan Request Letter

A loan application letter may increase or break your chances of receiving funding from any lending institution. This is because it is the first thing that lenders look for in the underwriting process when you submit an application. That said, you must know the dos and don’ts of writing a winning loan request letter to help you receive the funding that you really need.

Check your personal and business credit scores before sending a loan request letter and take the necessary steps to improve them.
Have all your financial statements ready, including cash flow statements, business balance sheets, P$L statements, etc
Make sure to submit all your relevant credentials along with your loan application request letter.
Always provide the correct and factual information to avoid fraudulent consequences.
Don’t make your letter too long and unnecessarily wordy
Don’t use an informal format while writing the loan application letter. Instead, follow the proper rules on writing formal letters
Don’t include any false information in your loan request letter- be it your business’s current financial health, assets, and liabilities that may be used as collateral damage in case you default payment or why you need the money.

Things to Remember When Writing a Loan Application Letter

Generally, you should always consider the following essential tips if you want to write a winning loan application letter:

The loan application letter is a formal document. Therefore, observe the proper rules of writing a formal letter.
Clearly state your intent to borrow a given amount of money
Provide a vivid but brief description of why you need the money. Your explanation should be concise, genuine, and transparent. While at it, explain how you plan to use the loaned amount and be very sincere about it.
Explain why your business is a low-risk investment decision for the lender.
Enumerate your assets and liabilities
Include the time, date, manner, and method that you will use to make your payment.

Free Loan Application Letter Templates

Are you looking to get some financing for your business or personal emergency? Download our free, well-crafted Loan application letter templates to help you customize your loan request letter. Our Templates includes all the critical elements of a winning loan request letter that will successfully help convince your lender to grant you the funding you need. Download our templates today to help you get started!

Collateral is defined as something that helps secure a loan. Generally, based on the type of lending institution you pick, the lender will give you less than your pledged asset value. Lenders every so often quote an acceptable loan to value ratio, meaning that if you borrow against your house, for example, and it worth $400,000, you will be given a loan amounting to $380,000. Again, this depends on the bank.

The prepayment penalty is a fee that some lenders charge if you pay off all or part of your loan before the loan’s maturity date. These do not usually apply if you pay extra principal on your loaned amount in small amounts at a time. However, it is good that you counter check with your lender.

Every lender follows a different criterion to approve a business or personal loan. The application process depends on several factors; therefore, the time taken to receive funding in your account may take anywhere from a few minutes to several days. This depends on the type of institution you choose and the type of loan you are asking for.

Acquiring a loan is sometimes a necessity in one’s business or personal life. Nonetheless, it is not always easy to get a loan as lenders are wary of granting loans due to loan repayment defaults and fraudulent borrowers. This article has provided you with great insight on loan application letters, the loan application process, essential tips for writing a winning loan application letter, and the dos and don’ts of writing a convincing loan request letter. If you keep these things in mind every time you are thinking of applying for a loan, you are sure to get the funds you need to ensure the smooth running of your business and sort any personal emergency that may come your way.

Business Loan Application Letter

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Start-up or small business owners who are searching a business loan will have a better chance of success if they are able to position themselves as an attractive investment for banks and other types of lenders. Financial institutes want to see facts and figures so that they are able to determine how viable your business is. This is part of their risk assessment. Most banks and other lenders make their profit from granting loans. They want to approve loan applications, but the application needs to meet lending requirements. It therefor can be challenging to write a formal loan request letter for your business that will impress a lender.

So you will need to prepare more than only business loan request letter! Make sure that you also include a business plan including a well-designed financial outlook for the next 4 to 5 years.

The request letter itself should be kept to a single page (cover page). The request should be made in the first sentence including the amount required, so the lender learns what he or she needs to know without having to read the whole letter or turn to another page. This enables the bank to quickly forward the request to the right department (workflow).

The details of the business should be clearly explained in one short paragraph. By keeping it compact, it shows that applicant knows what your business is and what you want to achieve.

The letter should also include the amount that the applicant has invested into the business from his or her own money. Why should a bank invest in a company you don’t want to invest in?

It is also recommended for the applicant to educate him or herself about business loans before beginning the process of gathering and organizing the required information. This will enable the applicant to be knowledgeable if their application is being considered, and they need to speak to a lending officer. Being prepared is half the work!

We have included sample business loan request letter. The parts in yellow should be replaced with your own data. Make sure that you send the letter including attachments by certified mail, so the applicant has proof of the time and date the letter was sent and received. All enclosure like a business plan, company certificate etc. should be copy of the orginal. Never send the original documents!

DISCLAIMER Nothing on this site shall be considered legal advice and no attorney-client relationship is established.

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Business Loan Request Letter to the Bank for Increased Growth

Table of Contents

You might need to start a new business or expand the existing one, which requires a good amount of finances. To apply for business finances from your bank, you need to write a business loan request letter to the bank . There are many reasons a business can require a loan, and each of these needs must be stated in the application.

A well-written letter can make the difference in having your application approved or getting it turned down. In this article, we will go over the business loan request letter format with an example template to write one on your own.

What Is a Business Loan Request Letter?

A business loan request letter is written to request financial assistance from a bank or other financial institution .

Banks, investment firms, and other lenders may require a business loan request letter as proof of credit. It’s also an additional statement of the company’s financial strength and the amount of assets that can be offloaded. A borrower writes this letter as a part of the application process.

A business loan request letter must include the following:

Total loan amount requested
How you plan to use the fund
Explanation of why you should be granted the fund
Information about your loan repayment strategy

Business Loan Request Letter Format

A business loan request letter is an official document requesting a bank for a loan . It is also a formal letter used by the bank when granting loans to businesses. It’s best to keep the letter to one page and include the following elements:

Heading and Greeting

The top of your loan application letter should include a header and a greeting with the following information:

Your name and contact information.
The date of your letter.
The name, position, and contact information of your loan agent
Your request for a loan should be mentioned in the subject line and the amount you’re asking for.
A formal greeting

Brief Explanation of Your Business Loan Request Letter

Start your letter by clearly explaining its purpose and the amount you request to borrow. This is a great opportunity to show how you are making strides toward expanding your business’s capacity.

Fundamental Information About Your Business

For a business loan, you need to present pertinent information to help the lender assess the risk of lending to your business. So, mention the following fundamental information about your business in the letter:

Company’s official name
The legal framework of your business (partnership, sole proprietorship, etc.)
A short description of what your company does
Number of years you have been in business
Number of employees in your company
Your annual income and profit

Detailed Explanation of Why You Need the Loan

Provide a detailed explanation of how you intend to use the loan. Cite numbers to define your objectives and be as explicit as you can. For example, instead of stating that you intend to utilize the loan for advertising, be more specific about the forms of advertising. Mention their respective costs and the proportion of new clients or improved sales you anticipate achieving.

Briefly Describe Your Potential for Loan Repayment

Mention your credit history and draw attention to the financial statement information that best demonstrates your ability to pay back the loan. You can include the following in your letter:

Recent profit-and-loss or balance statement summaries for showing that your business is profitable and expanding.
Repayment schedules for any other business debts you already owe.
Cash-flow projections that show when you can plan to make principal and interest loan repayment.

Concluding Elements

Your letter should conclude with the following details:

A paragraph referencing the financial statements you have attached.
A summary paragraph that requests the loan officer to evaluate your file and expresses your want to speak with them shortly
Close the letter with your signature
Include a list of enclosures required for your loan application

A person in a brown garment typing on a laptop computer

Business Loan Request Letter to the Bank Template

To draft an effective letter to the bank with proper details, use the following template generated by our Hey INK tool. This sample will help you draft a business loan request letter to the bank based on your requirements.

Example Template

Dear [Bank Name],

I am writing to request a loan from the bank to build on the current progress of my established brand. Over the past few years, we have made significant strides in terms of growth and expansion. And I believe that with additional funding, we can continue to propel our business forward.

Specifically, I am requesting a loan of [$ amount] to be paid back over [time frame]. I have attached a detailed business plan outlining our current financial situation as well as our projected growth over the next few years. In addition, I have included personal financial statements detailing my own assets and liabilities.

I believe that this loan would be beneficial not only for our business but also for the local economy as a whole. With the additional funding, we would be able to create new jobs and contribute to the overall prosperity of the community. I would be happy to meet with you in person to discuss this further or answer any questions you may have. Thank you for your time and consideration.

[You Signature]

[Your name printed]

The business loan request letter is an investment of your time and effort to get the needed capital for the growth of your business. Just as a business loan request letter is an investment for your time, so is your business plan. The better your business plan is, the more likely the bank will approve your business loan request letter. Follow the format and example template in this article to write an effective letter on your own.

Business Loan Request Letter to the Bank for Increased Growth

Abir Ghenaiet

Abir is a data analyst and researcher. Among her interests are artificial intelligence, machine learning, and natural language processing. As a humanitarian and educator, she actively supports women in tech and promotes diversity.

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Business Loan Application Letter Template

Download this Business Loan Application Letter Template Design in Word, Google Docs, PDF, Apple Pages, Outlook Format. Easily Editable, Printable, Downloadable.

Business loan application letter.

Dear [RECIPIENT NAME],

The intent of this letter is to apply for a business loan of $ [NUMBER]. My name is [YOUR NAME] and I am the owner of [YOUR COMPANY NAME] a company incorporated in the state of [NAME].

I am in need of a loan to scale up my business to the next level. In order to scale up productivity the company needs to procure the latest machines and tools.

I am attaching the supporting documents and business plans for your review. Please see the list of supporting documents:

Supporting documents: [DETAIL]

Kindly let me know if you need any other information of documents for sanctioning the loan. I will have it delivered to your office at the earliest. I will also make myself available for face to face meeting if it’s warranted.

[YOUR SIGNATURE]

[YOUR NAME]

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sample of application letter for business loan

IMAGES

VIDEO

COMMENTS

How to Properly Write a Business Loan Request

How to write a business loan request letter

1. Start with the easy stuff

2. Write a brief summary

3. Add information about your business

4. Explain your financing needs

5. Discuss your repayment plan

6. Close the letter

Loan proposal letter template

The takeaway

Related reading

What is a business loan request letter?

How to write a small business loan request letter

1. Start with a header and a greeting

2. Write a brief summary

3. Provide a basic overview of your business

4. Add info on any partners, if applicable

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6. Demonstrate that you can repay the loan

7. Add your concluding elements

Examples of a small business loan request letter

Example small business loan request letter #1

Example small business loan request letter #2

When do you need a business loan request letter?

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Related Posts

What Is A Business Loan Request Letter?

What You Need To Know About Writing A Loan Request Letter

1. Basic Business Information

2. Purpose Of The Loan

3. Provide Repayment Assurance

How To Write A Request Letter For A Business Loan

1. Heading And Greeting

2. Summary of Your Business Loan Request Letter

3. Basic Information About Your Business

4. Description Of The Purpose Of The Loan

5. Show Your Ability to Repay the Loan

6. Concluding Elements

Sample Of Business Loan Request Letter

Perfecting The Art Of Writing Business Loan Request Letters

Sample Application Letter For Lending Company: Free & Effective

Key Takeaways

Step-by-Step Guide

Step 2: Gather Necessary Information

Step 3: Structure Your Letter

Step 4: Personalize Your Approach

Step 5: Highlight Relevant Information

Step 6: Proofread and Edit

Step 7: Use a Template

Tips from Personal Experience

Conclusion and Comment Request

Frequently Asked Questions (FAQs)

Q: What is a loan application letter?

Q: How do I start writing a loan application letter?

Q: What information should be included in a loan application letter?

Q: Why is a loan application letter important?

Q: How should I structure my loan application letter?

Q: What tone should I use in a loan application letter?

Q: Can you provide tips for writing an effective loan application letter?

Q: Is it necessary to include supporting documents with the loan application letter?

Related Articles

How to Write a Loan Application Letter

What is a Loan Application Letter?

When Do You Need One?

Essential Loan Application Elements

1. Header and Greeting

2. Loan Request Summary

3. Basic Business Details

4. Loan Usage

5. Proof of How You’ll Pay Back the Loan

6. Give Accurate Information

Tips for Writing a Loan Application Letter

Loan Terms and Penalties

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How to Write a Loan Application Letter (with Samples)

What is a Loan Application Letter?

The Loan Application Process

Pre-qualification stage