How to Write a Business Letter for Loans

Loans and financial funding are very important for businesses, especially for start-up and small-scale firms to allow these to compete against other major industries and rival companies.

Meanwhile, to have a chance to get a loan, business owners should be able to write a comprehensive letter of proposal to entities that provide funding and capital.

Loans are important for any industry, especially for smalls-scale and start-up companies which are trying to boost production and expand operation. However, these funding may not be easy to obtain especially due to recession and competition among other firms.

While getting loans may be challenging, companies can improve their chances to convince banks, venture capitalists, and entities that provide funding by sending a business proposal letter which should include important entries such as:

Cover letter

Just like in a resume, business letter asking for loans should also include a cover letter which introduces a company, the amount of loan requested, and the purpose for this funding.

The introduction in the letter of proposal

The letter of proposal should be comprehensive and clear so there will be no unanswered questions left to readers.

To make this possible, a short but complete introduction should be the starting point of the letter. In this first paragraph, it should include the business name, address, names of the owners (it is advisable to include their Social Security numbers), the amount of the loans requested and its business purpose, and the plans on how it will be used.

The body of the letter

After writing a brief introduction, the succeeding paragraphs should include all the details of the company such as its business structure (e.g. partnership, corporation, and sole proprietorship), its economic viability and profitability, and important aspects of the business.

Furthermore, the body should include other rival companies, complete market information, and the target-market of the company.

The last part of the letter’s body should include the following: management profiles that will include the educational background, qualifications, and achievements of the company owners and their key employees; financial statement and income statements of the owners; details of all the assets that serve as collateral; and the last three years of the company’s operation;

Proofread the letter

Proofread the letter several times to make sure there is no error or vague statement.

Submit the letter

Submit the letter to the loan provider. Company owners should also keep a copy for themselves.

In case that the company owners did not receive any reply for their proposals, they may call the loan provider and ask them if they receive the letter.


  • ALPHONSE VAKO MBUA said on September 16, 2009
  • JANE said on March 7, 2010
  • norma crespo said on July 15, 2010
    i'm trying to get a buisness loan. i live in dalton georgia 30721
  • norma crespo said on July 15, 2010
    please help me write a letter to the bank asking for a buisness loan...i'm a beginner and i'm willing to learn how to start my own buisness
  • Jeffrey A. Waldo Sr said on September 14, 2010
    Need help writing a letter requesting startup funds for a semi-tractor to start a business in Mt. Dora, Florida, USA. Thank you.
  • soya said on May 24, 2011
    thanks for ur article , but dont u think in real its very tough to get loans , here in delhi its very tough to get any kind of reply ,they have only negative remarks n negative answers. in the government banks its very tough, they only give loans to who already had a good turnover, has big set up , they wont help for beginners n freshers i tried that for the last 5 years /but nothing happened.
  • Raghunath expert adviser said on May 25, 2011

    @soya, you are somehow true but it is not impossible though. I don't know what kind of business you are planning to start but try approaching NABARD, depending on department govt distributes some loan directly from the ministry. Some states has its own financing division. Talk to the same trade people to find what are the options.

    Raghunath Natarajan
    Startup Biz Hub - Advisor (Staff)

  • muruganandan said on July 18, 2011
    Dear Sir, Kindly help me, a business letter, we have request a term loan for rs.1 crore with pledging property to our adjust site. Thanking you, N.Muruganandan, 98946-81810
  • toni said on August 8, 2011
    i need to write a letter for additional financing. kindly guide me through. will appreciate your assistance.
  • jill walsh said on October 5, 2011
    I need help writing a letter to my elderly father's mortgage company, stating that I will be taking over his payments to relieve his stress, and so that i am authorized to make inquiries on that account if needed. can you please help me? thank you so much. letter writing is not my strong suit.
  • lydon said on February 7, 2012
    I need a loan from the bank but my company the letter of under taking yet i need a loan am a permanent worker.Help advice me how to maneuver and acquire loan.God bless you for your service!
  • Jackie Shaler said on July 20, 2012
    I live in Saginaw, MI, and I am a single mother of two. I want to open a concession stand that is mobile. Our family owns a campsite in a camp-ground that has more then 200 camper sites and 30 tent sites, they have no store and there is no general store in the area. The store is over 10 miles away, so having a concession stand would be a great convince for the members. Also by my home there is baseball park that has tournaments, more than 1000 people are there at this time. There was no stands available until last year when there was one that opened, but to my advantage they have no variety, and they are very expensive. Also in the winter there are several large sledding areas that have nothing available and people have to leave to get hot beverages, and come back, so there is a lot of potential.
  • Saha alom laskar said on July 27, 2012
    Pl'z help me write a letter to the bank asking for a business loan i am a beginner and i m willing to learn how to start my own business. Brick manufig. Industry in assam. Dist Hailakndi. My mobile number (9707818418)
  • janmajay kumar said on September 27, 2012
    I am janmajay, i am also unemployed. so i want to do a business. my state is jharkhand and district palamu. please help me.thanks.
  • M S Tapaswi said on October 20, 2012
    Dear sir kindly help me, a business letter for dairy project loan, of 100 animals with the chiller unit, storage of milk.
  • Alexander.I.Oriaku said on January 29, 2013
    Pls direct me on how to get loan from CBN. So that i can use vessle and supply blco to india
  • Ravindra kumar singh said on March 22, 2013
    Dear sir kindly help me a business letter for dairy project loan of 10 to 15 animals with storage of milk.
  • dikeledi said on March 27, 2013
    Hello in Tsomo in eastern cape I need help to achieve my business as a hairdresser thank I need help real coz I'm to much suffering even at home and my mom have so many child my contact number for helping me is 0732306567 or 0825350210
  • jady pietersen said on May 26, 2013
    Hi I need help to write a business proposal letter I want to start a hair salon in Johannesburg SA. Thanks Jady Pietersen 0736186990
  • debra hiles said on July 23, 2013
    TO whom it may concern. I have been in the hairdresser for over 22 years and I have been working all my years for a boss. I open a salon without money only with my husband salary but now we can manage because we have no capital to pay we really battle every month. This my dream and have to make it work. I love what i'm doing and I know i'm going the right way I only need to pay financial help please please help me find a way to sleep at nite my salon is in Port Elizabeth my Debra Hiles 0735626342
  • Dolores Salazar said on July 31, 2013
    Hi. please help me how to make or write a loan business letter because my country in philippines was opening a business loan to all the OFW true OWWA and DOLE and now i want to apply for this one of the requirements is the resume so pls if you could give me a sample of resume. Thank you very much you're reply is my pleasure. Have a nice day
  • janmoni changmai said on August 2, 2013
    Dear sir , kindly help me to write a letter to bank asking for business loan. I'm a beginner and want to set up small scale mineral water plant project. Hope to hear from you soon. Thanking you. with regards, sri janmoni changmai. Moran, assam.
  • Arif Bellah said on February 25, 2015
    Hello , i am interested in getting a loan from international private funding firm to start-up an entrepreneur abroad . I have got few firms' name and want a complete solution on location ,marketing , loan offer , management , so on from that firm . Can you name such firms ? Good day !
  • charles said on April 16, 2015
    Dear Sir/Madam , Kindly help me to write a litter to ex boss asking for business loan to growing my taxi/shuttle service business,7 seat min van. I have been operator for 2 years through subcontracting. A will await for your respond. Regards Charles


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