A loan proposal is a detailed business document used to request money, consisting of three parts: narrative, description, and documentation. It should be customized to the lender and include personal and financial information. The document is often split into sections and includes an introduction, financial information, and supporting documents.
A loan proposal is an official business document used to request money from another individual or group. These proposals are very similar to a standard business plan, but often have more descriptive information and less general detail. While there are often several parts to a loan proposal, they are generally divided into three areas. The narrative tells the business and its history, the description outlines the financial aspects of the claim, and the documentation section contains information to support the first two sections.
Using a loan proposition is a common way to secure capital for a new or existing business. A comprehensive document will contain a lot of information and require significant effort to put together. These documents should be customized to the potential lender, but it is possible to simply copy large amounts of information.
These documents consist of three basic parts; the first is the narrative section. The narrative in a loan proposal is used to describe the history, owners, environment and methodology of the business. These sections are generally less formal than typical business documents as they often contain information about personal choices, goals and dreams for the company. The second part of the narrative will discuss what the loan will bring to the business and the direction the borrower hopes it will take in the future.
The second fundamental part of a loan proposal is the description. This section will look at the financial aspect of the loan. This will include information about the company’s current financial status, other confirmed investors, and the requested loan amount and rates. This section is often the most formal part of the document as it deals directly with money.
The last section is for documentation. This section will contain your business and tax documents, proof of sales and proof of income. Basically, this will back up all the hard facts raised in the first two areas.
Even if your loan proposal consists of only three parts, they will rarely be maintained as three sections. Typically, these documents are split up to provide a more complete and richer reading experience for the lender. The proposal will begin with several short sections that serve as an introduction. These consist of a narrative cover letter, a descriptive financial summary, and photos or demographic information for the business location.
Most of the loan proposal will follow a similar pattern. Start with the first section of the narrative and then get into the financial information. Following the real numbers are documents, typically tax information, that support the preceding numbers. Next, the narrative continues with the company’s goals and future, followed by payback and return on investment details and other supporting documentation.
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