Regardless of what type of company you own, there is a big chance that you will need funding at one point or another. When that moment comes, it is important to know how to write an effective business loan proposal that will get you all the money that you need and help your company grow. A professionally written proposal should not only ensure that you get the funds that you ask for but to so at an affordable rate.
We have compiled a list of important financial details that you must include in your business loan proposal in order to maximize your chances of securing the funds that your company needs.
Add updated business records to the proposal
If you are looking to secure funds for a company that has been around for more than a couple of months, it is important to show the lender where the business stands, financially. This means including both historical as well as recent financial documents and business records, along with predictions and projects that you want to undertake in the future. Here are some of the things that you should include:
- All tax return documents – By including your tax returns the lender will see that you are in compliance with the HMRC. This will also show the income and expenditure of the business;
- Balance sheets along with profit/loss reports – These must be up to date and written as clearly as possible. By including these, you will show the lender what the company is making and what it is spending;
- A detailed list of business assets – Include a list of all tangible and intangible assets of your business, along with their projected values. This list is particularly important because it essentially informs the lender of assets that can be used as collateral;
- Current credit details – This should include information on all current loans and credit functions. This section should also contain the repayment history for the loans;
Include your personal information and details
Lenders will also be interested in your personal track record in terms of credit functions. Include all relevant financial information, along with a repayment history for your loans. The lenders may use this section in order to get in touch with your individuals who provided personal guarantees for your loans so that they can verify if you are trustworthy or not.
Although some may not like the idea, this section should also include a personal budget that shows your living costs and personal credit score. This will be an indicator of how much money you may have to take our of the business in order to cover your expenses. Lastly, you should also include your personal assets and liabilities.
Write a detailed business plan
Every business loan proposal must include a well-written informative business plan. This section should focus on detailing your plans for the company, along with your predictions for the future. Put an emphasis on how the money from the loan will help develop the business. Here are the main sections that your business plan should include:
- The executive summary – Here you must include an overview of your company. Explain what the business does, what is its market and what are the qualities that make it stand out from the competitors;
- The company description – This part must contain a more detailed description of the company’s activity. Include details about its history, its current operations and any projections that you have for the future;
- Key financial information – This should be a summary of all the financial information that you’ve included in other sections, along with a detailed presentation of what you intend to do with the loan;
- Marketing Plan/Production Plan – Include a presentation of how you intend to market your services and products and how you will fulfill your orders. This section must clearly show how you will utilize your funds in order to manufacture the products and deliver them to the customer;
- Management information – Here you must add include details such as the qualifications and experiences of your current staff and how their attributes help ensure that your business is successful and will continue to grow;
The information included above will help you ensure that your business loan proposal will impress the lenders and convince them to give you the funds that you need in order to further develop your company. Please keep in mind that our suggestions should be used in order to enhance your proposal. These should not be treated as guidelines to help you create the proposal from scratch.
It is also important to mention that some of the details in the business plans may have to change depending on what your company does. If you offer physical products you will also have to include details regarding your production line and the raw cost of a single product.
This having been said, follow our instructions and you are sure to get whatever funds you need.