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When applying for a business loan, you are going to need to provide a story to your lender, that gives them a detailed low-down on when, why and how the money the money they are lending to you is going to turn a profit and mean stable returns for them. To do this, it is best to first look at some samples of business proposal letters for new loans, so that you know exactly what you need to do to qualify.

A good business loan proposal will contain the following elements: a cover letter, illustrations, an executive summary, a description of the borrower, a delineation of the collateral, the marketing plan, the financial underwriting, and a summary. Each one of these should be written in a manner that is thorough, yet direct and succinct. It may be a good idea to check with your colleagues to find samples of business proposal letters for new loans, so that you have the ability to emulate what works and avoid what does not.

The cover letter is extremely important, as it is the first opportunity you will have to sell your idea to the lender. (Keep in mind that, while the lender is obviously going to be used to hearing sales pitches, he is also a connoisseur of them, and a good sales pitch to him demonstrates that you have good sales pitching ability to the masses.) Photos and illustrations are excellent ways to spice this up; in an age of instant information, few prospective customers are willing to read long amounts of text.

Your executive summary should show a detailed account of the uses and source of the funds. Make sure that you can describe all the costs, and, more importantly, show that you have the financial backing to cover unanticipated costs. Descriptions of the borrowers are also important here, as they can show the character of the people running the business. The collateral will give the lender security in knowing that you are prepared for a worst-case scenario.

The marketing plan is open to a lot of creativity. While “market research” may sound like a daunting concept, all you are really doing is coming up with a way to demonstrate that you know how much your customers want your product. You may want some samples of business proposal letters for new loan so that you know how to present this well.

The underwriting is a simple analysis of the lender’s criteria that explains exactly what they want to hear. Reassure the lender through numbers that you are a safe investment. This and a strong conclusion are all you need to put together a successful and professional business proposal!

This Business article was written by Mark Karavan on 2/21/2010