What You Should Know About Writing a Business Loan Request Letter

A business loan request is part of the application process for a small business loan at a bank. In most cases, this business request loan letter is required for two types of loans only – traditional bank term loans and SBA loans.

It contains important information about the history of your business, the financial status of it, and an opportunity for you to show why the bank should loan you money.

A business loan request can make or break the chances of you getting approved. Think of it like a cover letter for the bank to review. Here we will discuss how to write a loan letter, what to include, and how to get the best results.

What Is Included in a Business Loan Request Letter?

Business loan request letters include the loan amount, intended use of funds, explanation of why you should be funded, details on your plan on repaying the loan. It should be not more than one page but include enough information about your business.

The following format is recommended in your business loan request letter:

• Header: the top of the letter should have contact information such as name, date, information of the loan agent, a subject line with what you are seeking for funding, and a greeting.
• Summary: state the purpose of your letter and how much you want to borrow.
• Information about your business: this includes the legal name of the company, the legal structure (sole proprietorship, corporation, etc.), time in business, what your business does, how many employees you have, and annual revenue.
• Purpose of the loan: be specific of what your purpose for the loan is including your goals and numbers.
• Repayment plan: touch on how you plan to repay the loan as this will help lenders determine if they can trust you with their money.
• Conclusion: the end of the letter should include asking the loan agent to review your proposal and hope to speak with them soon and any business documents and financial statements that are required for your loan application. Having all this information available in the beginning of the application will prevent from any delays in your chances of getting funded.

The Bottom Line

If you are applying for a loan from a traditional lender or an SBA, a loan request letter is essential. By following the format above, you can create a template and input all the necessary information to make filling it out easier. You can start by making a rough draft of the letter and then ask a friend or colleague to proofread it. It might help you spot some errors and have the opportunity to improve it. Be sure to not include any false information on your letter to look better, dishonesty will not get you very far.