Organizing a well-documented, efficient business loan proposal is the foremost step towards borrowing the funds your business requires from a lender. Sometimes, a small business loan proposal will be the contact a lender has with your organization. Hence, you have to prepare a document which presents your business in the best possible way. The aim is to convince the lender that you are prepared and can make your business successful and pay back the loan.

Want to organize a business loan proposal to make it appealing for impressing the lender? Following these 7 steps mentioned below:

1. Mention the purpose of the loan

You must mention why you require the loan. The loan purpose can be different like business expansion, an increase in working capital, employing new staff, increasing inventory, buying new equipment, etc. The lender monitors whether your loan purpose is fair enough or not. Usually, lenders consider a loan application only if they are satisfied with the purpose.

2. Write down the loan amount

The loan amount should be mentioned properly because it must justify the creditworthiness of your business and the loan borrowing purpose as well.

3. Attach your loan collateral

Secured business loans usually need collateral to showcase. Thereby, it’s a must when you are applying for a loan for your new business. Your loan quantum also relies on the collateral’s market value. It makes the lenders feel secure regarding lending; thereby, scopes of loan approval increases if you attach the loan collateral. To make your loan proposal impressive, it is imperative to mention the loan collateral and its market value.

4. Make sure about the repayment policy

A lender will let you know the repayment policy before approving a loan application. The loan’s repayment earns a profit for the lender. And you can do it conveniently through EMIs. Check your business loan EMI before applying for the loan. If you are borrowing it as a business line of credit, the payback amount and the duration are not fixed. However, if you are borrowing a general loan, you can pay it back in EMIs. You can expand or shorten the loan duration to reduce or increase the EMI amount. Thereby, don’t forget to mention the repayment process of your borrowed amount in your business loan proposal.

5. Attach all business records-related documents

The business records incorporate the business credit report, turnover of last years, the income tax return files, profit and loss reports, the audit report, and the balance sheets. You must all these documents as proofs of business records to the loan proposal during submission.

6. Mention your personal details

A perfect business loan proposal requires the loan applicant’s personal details. In case your business is a joint venture, the proposal must incorporate all partners’ personal data. The credit history and credit report of all business partners should be mentioned as well.

7. Share your business strategy

The real success of a business depends on the perfect strategy. Hence, you should share your business strategy. Your scopes of profit increase if you can make a perfect business strategy. The strategy also incorporates your plan of using the loan amount and how you plan to invest to produce good revenue for your business. Basically, your business’ success relies on your strategy; thereby taking experts’ recommendations is a wise decision. The lender will show interests in your strategy because its profit depends on the strategy and the repayment of loan mostly depends on the profits of your business.

The Bottom Line

While writing a good business loan proposal, make sure to submit it to the right lender. Selection of the right lender is equally vital as writing an exceptional loan proposal. The combination of a precise loan proposal and the right lender will help your business succeed. And to experience such success in business, stay in touch with Indifi, one of the most reliable alternative lenders in India.