Apply for a Small Business Loan

When applying for a small business loan, always start your proposal with a cover letter. Clearly explain the following:

Details about yourself
Details about your small business
Kind of small business

Loan amount requested
Objective of the loan
Desired repayment schedule
How the loan will assist your small business
How you will repay the loan

When writing a proposal for a small business loan, do not assume financial institutions are aware of your business. It is of paramount importance that you include industry-specific details so the financial institutions can easily understand how your business operates and what kind of trends can affect it.

Description

Once you are ready with the proposal, you need to write your small business description, including the following details:

Organization type
Date of details
Location
Products or services
History
Future strategies
Competitors
Clients
Suppliers

Management Experience - when applying for a small business loan, you need to submit the resumes of each management member that has active role to play in every top management decisions.

Personal Financial Statements - the Small Business Administration needs financial statements for all guarantors and principal owners. When submitting financial statements, it is your responsibility to ensure that it is not older than three months. In some cases, you also need to attach a copy of the previous year's federal income tax return.

Loan Repayment - when applying for a small business loan, you need to submit a brief written statement regarding the loan repayment. You must tell clearly how you are going to repay the loan amount including monthly source of income and whether you are interested in monthly installments or not. Your loan repayment statement should include budgets and cash-flow schedules.

Existing Business

Financial institutions ask for financial statements for the last five years before giving approval for a small business loan. They may also ask for balance sheets and profit and loss statements. When applying for a small business loan, make sure you include a schedule of term debt, and aging of accounts payable and accounts receivables.

Projections

Give financial institutions a projection of your future routines for at least two years. It is vital that you include expenses and earnings in this projection. Your projections should be in the format of profit and loss. Support all your statements with documented explanations.