Here is a sample bank loan request for a small business.
Readers who do not yet have the advantage of knowing you will judge you by your writing. Pay some attention to what you say and how you say it. What follows is a sample cover letter for a bank loan request. Note how much information is packed into a short letter, and that it focuses on what a banker would most want to know.
Write as you would speak, but just a little more formally. Avoid slang and contractions. Do not try to make it too fancy. Start with a list of the main points you need to get across; then start explaining them. Use only the three basic tenses, past, present, and future. Refer to your business by its name, or "it". Thus, Contoso, Ltd. was formed in 1996 etc., is now called Adventure Works. Use "I" or "we" only when referring to the actions of the individual owners. Write in the active voice and in short sentences
ADVENTURE WORKS is a high-end design and remodeling firm with a reputation for integrity, quality craftsmanship, and excellence in management. In three years annual sales have increased to be well over a million dollars.
ADVENTURE WORKS was formed by Brian Groth as a Sole Proprietorship in December 1997. In 1998 a combination of activities involving residential design, consulting, and general construction brought Gross Sales of $250,000.
The Company experienced steady growth since its inception, and incorporated in March 1999, (see Appendix 6, Articles of Incorporation). In 1999 Gross Sales of $750,000 were achieved. In 2000, signed contracts show that Gross Sales are expected to be $1,300,000 (see Appendix 2, current Backlog).
The Company has its address in leased premises at 1234 A Street, Springfield, MD 40523. Its activities fall under the Standard Industrial Classification SIC 1521 and 1522. The owners are Brian Groth and Julie Bankert.
ADVENTURE WORKS is involved in four distinct activities:
1. Architectural Design
2. Residential & Light Commercial Construction
3. Property Services
4. Retail Floor Coverings (see Appendix 4).
Eighty to ninety percent of the Gross Sales are in design and construction. At the moment (May 2000), there are 25 permanent employees on the payroll and 10 subcontracted workers excluding subcontracting companies (see Appendix 1 for resumes).
The company's Short Term Objectives (within the next three years) are to increase activity in all Divisions, and to achieve annual profit, net after taxes, of $200,000 by 2005. Its Long term objectives are: to maintain the level of current business achieved up to 2005, and then to move into historical restorations, more light commercial work, and increased new custom home construction.
To implement these objectives the company needs:
1. A loan of $100,000 at Prime plus 2%. This loan to be used for current near term expenses including __________________, ______________ and ____________ It will be repaid in five years.
2. A line of credit of $50,000 to take advantage of discounts available, avoid associated penalties, and expand into high profit areas requiring positive cash flow.
The prospects for ADVENTURE WORKS’ continued growth are excellent, with 2000 construction and design contracts underway already exceeding $550,000 (see Appendix 2, Backlog 2000).
For equity the company has assets of $227,000 (see Appendix 9, Balance Sheet as of mm/dd/2003). Additionally, the company's owners are willing to offer as collateral a second mortgage on a residence with an estimated equity of $150,000. The address of this residence is 456 Oak Dr., Mt. Vernon, CA 31304.
The company's overall objective is to satisfy that market segment that demands integrity and quality construction, and to maintain a steady growth in sales volume that will sustain the company for twenty years. Brian Groth has enhanced his reputation to the point where the company is regarded by many architects as the recommended choice with their clients due to the excellence of its craftsmen and management.
Market research shows that the population in Springfield has increased by 200,000 between 1985 and 2003. This increase in population brought about an increase of 19,850 new single family homes valued at over three billion dollars. This increase gives the area over 128,000 existing homes as a potential remodeling market. Demographic estimates published by the State Office of Financial Management, 2002, indicate that an additional 20,000 persons will need to be housed between 2002 and 2020. ADVENTURE WORKS intends to pursue this market vigorously. (See Appendix 7 for data on anticipated changes in the population of the County).
The financial objectives of ADVENTURE WORKS over the next few years are as follows:
Sales $7,000,000 $10,000,000
Net Income after Tax $500,000 $1,000,000
Please review the enclosed business plan and loan proposal, and of course feel free to ask for any additional information or explanations you may want. I will call you in about one week's time to arrange an appointment so that we can discuss the loan in person.
I look forward to a mutually profitable relationship with the Woodgrove Bank.
The business plan cover letter is different from any other types of letters because it is addressed to a lender or an investor who will review the proposed business plan.
This is the applicant’s chance to have a personal word with the lender and prepare him or her for reading the business plan. The feasibility of the business will be judged by the business plan. You need to think in advance if you want to create an absolutely powerful document.
People who are new in business often think that a business proposal cover letter is not important and gives more priority to working on their business plan. This is a wrong notion, so take the time to review some free online templates. They will help you to understand the structure and all features of such kind of document, you should be absolutely good prepared if you want to succeed.
Your letter is a key to achieving an important milestone in the job search process: landing an interview. Essential to every job search, it is a marketing tool for your skills and employment value.
Business Plan Cover Letter Tips
Follow these helpful tips:
- If you do not know the name of the individual going to read the business proposal call the lending institution or bank to be able to get the name and the title of the addressee.
- Make your business document professional in tone.
- Business cover letters must not belong they should be short and concise. Get directions to the point that a business plan is attached and that you would like to apply for a business loan.
- Outline the details of your business plan.
Keep in mind that you should always spell check your writing. It’s even better to get someone else to read it and point out any mistakes or confusing things. Furthermore, you need to double-check everything in your text. If you mention a company’s name, make sure you get it right. If you mention places you’ve worked before, make sure you get their names right too. Mistakes are worse than typos. And remember to keep things short. It will help you to underline really essential things that should be read first.
You should also follow these rules and be sure that you are ready to have a good start.
According to Confucius quote taken from Business.com:
You can’t build a reputation on what you’re going to do.
Business Proposal Cover Letter Sample
Name of Applicant
Address of Applicant
City, State, Zip code
Name of Investor/Lender/Bank/Lending Institution
Address of Bank
City, State, Zip Code
Dear Mr. /Ms. Name of Lender/Investor,
I have read about your offers to finance small and medium starting businesses that cater to the use of biodegradable products and my business uses biodegradable raw products that conform to the safety of the environment. I am hereby submitting my business plan to you with the hope of being given the chance to apply for a $30,000 business loan.
I have a savings of $15,000 that I plan to invest in the business and we aim to make a $7,500 profit for the first year after payment of premiums and taxes, which we will reinvest back to the business for expansion.
Any consideration you can extend regarding this matter is very much appreciated. Thank you.
Name and Signature of Applicant
Make use of our cover letters sample to help you in writing. Our expert writers know all features of such kind of documents. Furthermore, they know how to create an absolutely effective document for you. You know that our aim your full satisfaction, that’s why we will do everything until you will get what you really want and expect. Check out more of our cover letter writing tips today! Don’t miss your opportunity to receive the best chance of improving the quality of your life!