20 Tips to Request for Bank Loan

Request for Bank Loan: Businesses applying for a loan from a lending institution may be asked to prepare a loan request letter.

This letter should include documentation of a strong management team, substantial experience in the industry and a complete understanding of the current marketplace.

The letter should not only introduce your business to the lending institution, but it should also clearly state how much money you need, how you will repay the loan and the security you would pledge to back up the loan.

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Request for Bank Loan
https://www.score.org Request for Bank Loan

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Request for Bank Loan

1. Provide corporate data.

 State the name of your business. List your business address and phone numbers.
Provide the date your business was established.
Briefly explain your business structure.
For example, if your business is a corporation, state this and give the date of incorporation.

Request for Bank Loan:

2. Describe your business location.

 In addition to indicating where your company is, describe the property.
For example, a property owner requesting a loan for improvements would provide the size of the property, the number of units and the acreage.
A brief description of the neighborhood would also be relevant, as location can determine market value. Photos and maps may also be included.

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Request for Bank Loan:

3. Provide a market analysis.

 Describe your target market. Identify the critical needs of your target customers.
Define the size of your target market and indicate its potential for growth.
Project how much market share you expect to gain.
Describe your competitive advantage in the market.

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Request for Bank Loan:

4. Explain how the loan will help your business succeed.

Whether your company is a start-up or an established business, you might need financial help.
Explain how the loan will help you expand your business.
For example, businesses use loans to maintain current operations, purchase equipment or expand to a new location. Loans can also help companies increase their working capital.
This helps them maintain operating cash flow and cover unexpected expenses during economic downturns.

Request for Bank Loan:

5. Write the executive summary last.

 Even though it belongs at the beginning of the proposal document, the executive summary is written last.
This is because it provides a summary of all of the relevant information in the loan proposal.
Develop this summary as you gather your documentation for your loan.
Writing the executive summary last reflects a thorough understanding of the purpose of the loan proposal.
Writing it at the end of the process also makes it more persuasive.
Limit the length of the Executive Summary to less than a page.

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Request for Bank Loan:

6. Write a business profile.

 Explain the nature of your business.
For example, if you are a flooring company, describe the products you sell. Identify your typical customers.
The typical customer of a flooring company might be retailers of carpet, linoleum, tile and hardwood.

Describe the primary focus of your business, such as service and delivery of flooring products to retail businesses for resale.

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Request for Bank Loan:

7. Describe your management team.

List the company owners and describe the legal structure of your business.

Provide profiles of senior management summarizing their key experience, qualifications and credentials.

Briefly explain the organizational structure.

If there is a board of directors, list their qualifications.

Name their positions on the board and how they contribute to the company’s success.

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Request for Bank Loan:

8. Provide your marketing plan.

Explain how you create customers. Outline your strategy for growth.

State how you communicate with customers. Describe your sales activities.

Explain your competitive advantage.

For example, you may offer customers added value with lower prices or additional benefits and services.

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Request for Bank Loan:

9. Describe your production plan.

Explain your manufacturing process.
Quantify the total amount of output your manufacturing department generates in a given period.
Describe how you allocate resources, such as employees and materials.
Explain how you meet promised delivery dates and avoid overloading or underloading your production facility. Assure your lender that you have the operational capacity to meet your production goals.

Request for Bank Loan:

10. Describe your human resources management.

 Explain how you recruit qualified employees.
Describe your training process.
Specify how you orient new hires.
Note any continuing education and advanced training you provide.
Mention your employee retention statistics.
State how you retain qualified employees who project your business further.

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Request for Bank Loan:

11. State the amount of money you need.

Be realistic about the amount of money you are requesting.
Explain how you determined the amount. Include relevant quotes.
For example, if you are purchasing equipment, include quotes for equipment and supplies.
If you are expanding, provide quotes for building costs.
Explain how you will use the loan and why you need it.

Request for Bank Loan:

12. Discuss loan repayment.

 Describe the terms you hope to receive.
Include the interest rate and term you expect to receive.
Provide sales and cash flow projections to demonstrate that you can make the payments.
Realize that interest rates and terms will be negotiated by the lender.
They will base their loan terms on their risk assessment of your business.

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Request for Bank Loan:

13. Describe collateral you are willing to pledge.

Most loan programs require collateral.
Collateral secures the loan because it can be sold in the event that the business cannot repay the loan.
Most lenders require at least 2 forms of loan repayment.
The first is cash flow generated from the business.
The second would be collateral that is pledged to secure the loan.

Request for Bank Loan:

14. Include personal financial statements.

Any owner with a 20% share or more in the business should provide personal financial statements.
Recent statements are required.
The statements must be under 90 days old.
Tax returns may also be required.
Some lenders ask for tax returns for up to the past 3 tax years.

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15. Provide business financial statements.

Provide 3 years’ worth of financial statements.
Also provide current statements for the past 90 days.
If you are just starting out, provide projected financial statements.
Include a balance sheet that lists your assets, liabilities and equity.
Provide an income statement, or profit and loss statement.
Which includes all income and expenses in a given period of time.
Prepare a reconciliation of net worth, which is an accounting of financial changes that have increased or decreased the net worth of the business.

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Request for Bank Loan:

16. Give a statement of equity.

Explain how much equity you and the other owners have in the business.

Lenders will want to see that you have put some of your own money into the business.

The amount depends on the type of loan requested, how it will be used and the terms.

You can build equity in your business through retained earnings or from an injection of cash.

Usually, lenders want to see that any business debt totals less than 4 times the amount of equity.

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Request for Bank Loan:

17. Provide financial projections.

Lenders generally want to see how you expect your company to perform over the next 5 years.

Generate projected monthly and quarterly financial statements for the first year.

Provide quarterly and annual statements for the following years.

Include forecaster income statements, balance sheets, cash flow statements and capital expenditure budgets.

Prepare to discuss how you will change operations if you do not generate the projected cash.

  • Make sure to include the assumptions behind the projections and state clearly that your estimated results are projections, which means they aren’t guaranteed, and may not be reached.

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18. Include supporting documents that show your loan request is based on facts.

Provide market studies or other documentation that supports your forecasts.

Produce documents that support your financial data.

For example, include copies of leases, subcontractor estimates and letters of credit.

Include copies of customer testimonials.

Provide copies of media reports about your company.

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Request for Bank Loan:

19. More tips

  • The quality of your writing reflects on your business.
  • Use simple, straightforward language. Avoid arcane terms and acronyms. Make your request clear and well-organized.
  • Be positive. Keep the focus on demonstrating how you plan to be successful.
  • If you’re not sure how to word your letter, work from a template or example letter. A quick online search for “example bank loan request letter” or “bank loan request letter template” will bring up numerous examples that you can modify to suit your needs.

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Request for Bank Loan:

20. Make sure you include the following in your business loan request letter:

  • Business name
  • Business structure (S-corporation, partnership, LLC, etc.)
  • Brief description of what your business does
  • How long you’ve been in operation
  • Current number of employees
  • Info on any partners, if applicable
  • Current annual revenue
  • The purpose of your loan
  • Any vendors you’ll be purchasing from if applicable
  • Evidence you’ll be able to repay the loan and principal, supported by historical financial figures and projections


There are plenty of traditional term loans.

And other small business loan options that don’t require a business loan request letter.

To do so don’t be discouraged if this sounds like a bit more than you have the time for right now.

It’s a good idea to explore your business loan options based on how quickly you need the money and how you’re planning to use the funds.

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