Use the numbers from your most recent balance sheet or income statement as evidence to see the current financial health of your business. If you have other business debts, be sure to mention it and add a business debt plan. If you`re profitable, be sure to point this out, as this is something many lenders look for in successful applicants. Now that you know exactly how to write a business loan application letter, you can enter information about your own business format that meets your lender`s expectations. I am writing this letter to apply for a $100,000 loan to small businesses to hire additional staff. Online lenders are often much easier to qualify than bank loans. To apply, you usually only need to provide a few recent business account statements, as well as business and personal tax returns. And if you`re working with another online lender, the application and approval process for most term loans can be completed in two to five business days. I am writing this letter to provide a small business loan in the amount of $[amount] for the purpose of [summarizing the purpose of the loan here]. My company, [your company name], is a growing company that serves customers in the [type of business] industry. You can see our success online at [List your website and any social media profiles you want to feature]. Please take a moment to read this application letter and the accompanying financial documents.
If you think you can help our business, we`d love to hear from you. It may seem impossible to put your business on a single page for a complete stranger who has never met you. We understand the feeling, but knowing how to effectively write a business loan application letter can help you overcome the challenge. Remember that this letter might be one of the only ways you can personally tell your lender why they should approve your application. Equipment financing is the perfect option if you need to buy or rent equipment. Lenders may feel comfortable with this type of loan with more risk. This is because security is built directly into the loan. If you default, the lender can repossess the equipment. To simplify this process, consider following this free example of business loan applications as a guide. Of course, you need to modify and customize this template according to the specifics of your business and the loan you want to pursue.
The format of a business loan application letter will usually be on 8.5 x 11 inch printed paper. The exception is if your SBA lender supports online applications, in which case you can submit your letter online. Once you have described how you want to use the requested loan funds, you will be redirected to the part of your business loan application letter where you need to prove that you can repay the loan. Of course, the rest of your loan application will include detailed information about your company`s finances and help you prove it. But here you want to highlight all the specific business finances to support your claim that financing your loan is a low-risk decision for your lender. Please note the attached business plan, which outlines my financial forecasts for the next five years and clearly indicates my previous assets. It`s no surprise that banks are more likely to lend money to businesses that seem to be growing and could potentially become long-term customers. Unfortunately, the right majority of small business owners find traditional bank loan requirements so strict that qualifying is difficult. But if your personal credit score is excellent, this could be an option you`ll want to explore.
[Explain the reason for the loan application here. For example: To support our continued growth, we plan to hire a full-time administrative assistant and a sales representative this year. We are asking for funding to cover the cost of their salaries and benefits. (Replace the wording that applies to your business plan.)] Last year, our annual revenue was $2.8 million and we made a net profit of $975,000. We have maintained our cash flow consistent over the past 2 years and have made a net profit every year we have been in business. This business growth opportunity is immediate, but requires more upfront funding than our cash flow can currently provide. While monthly repayments with interest over time fit easily into our budget, we currently don`t have access to a lump sum large enough to make the first purchase. .