What details are in a good business loan proposal?


Quick Answer

Good examples of business loan proposals clearly address the amount of funds needed, how the company plans to use the funds, the business' ability to repay the loan, and alternative methods of repayment should the business not be able to repay the loan, states the U.S. Small Business Administration. Those drafting a business loan proposal should also contact the lender to see which format the lender prefers.

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Full Answer

Typical elements of a good business loan proposal are an executive summary, a business profile, management experience, collateral, and a loan request and repayment plan, explains the SBA. Proposals should also include personal and business financial statements, an equity investment and income projections. A franchise or purchase agreement, articles of incorporation, partnership agreements, business licences and registrations, and any preexisting third-party contracts may be required as well.

Other steps in preparing a good business loan proposal include a brief history of the business and its goals, which should be measurable, recommends the Houston Chronicle. For example, specifics on productivity versus projected profits is one example of a measurable goal. Brief professional biographies of the business' managers can also boost a loan proposal; attributes of managers to include in the proposal are past contributions, experience and knowledge. While the executive summary acts as the first page of a business loan proposal, good examples also have a cover page titled as "Business Plan."

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