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When it comes to securing a loan or investors for your business, the ability to write persuasively is essential. A well-drafted proposal is not the only important factor in securing financial backing, but it is a big first step. A loan proposal can serve as the first point of contact between you and a potential lender, so it’s important to ensure that it casts you and your company in a favorable light. Your proposal should effectively persuade the lender that you are a worthy investment.
Your proposal should include at least the following:
- An Executive Summary
- A Description of Your Business
- Your Team Dynamics
- Your Financial Situation
- Your Plan
An Executive Summary
Think of this section as a way of giving your potential lender an overview of your business. In this section, describe your company, your niche, and why you have a competitive edge over others in your industry. Give the broad strokes of why you are requesting funding or investment, the nature of the project, and the amount of assistance you are asking for.
A Description of Your Business
In the next section, give a more in-depth description of your business. Include a description of your history, your current state of operations, and your projections for the future. Essentially, this is the section where you will tell the investor where you’ve come from, where you are today, and where you plan to go in the future.
Your Team Dynamics and Experience
In this section, use persuasive language to answer the question “Why you?” Outline the strengths and experience level of each member of the team. Any lender or investor needs to know that your team has the skills and experience to successfully carry out the project for which you are asking the money.
Your Financial Situation
Here, you’ll outline the financial data that will tell investors or lenders about your financial picture today as well as your projections for the future. You’ll want to show them where you stand now and how you plan to improve and grow with the help of the money the support they will (hopefully!) give you. Although you want to be as compelling and persuasive as possible here, it’s imperative that you are honest. Don’t try to hide anything.
Any lender will want to know what your plan is. They will want to know that you can provide specific information about what you plan to do with the money you are asking for. Are you going to use it for expanding to another location? To hire and train more employees? To buy more inventory? Whatever it is, this is the section to outline it. Include as much detail as possible. It will be much more persuasive if you also provide supporting documents, such as estimates for construction jobs, lease information, inventory information, etc. The goal is to provide information that shows that you have specific reasons for arriving at the figure you are asking for.
General loan proposal writing tips
- Use straightforward language. Don’t get bogged down in jargon and acronyms. Don’t leave anything ambiguous! Be clear and to the point.
- Sell yourself, but don’t be too “salesy.” It’s always a good idea to focus on your company’s strong suits, but don’t be pushy. You don’t want to turn off a potential investor by being a used-car salesman.
One final tip: If writing isn’t your strong suit, you can always entrust your proposal to a professional copywriter. They have the experience necessary to craft a proposal that is polished, professional, and persuasive – everything a loan proposal should be.