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How to write a loan proposal
When applying for small business finance the presentation of your loan proposal is very important. Although most lenders make their money by granting loans they will only lend if they are convinced that the loan can be repaid. The better your presentation the greater your chances are of securing a loan with minimal security. The following points are a guide to the basic elements in a loan proposal, we would always suggest that you seek professional advice before commiting to one lender.
Good loan proposals will contain the following information.
The name, address and nature of the business supported by ABN/ACN and Tax File numbers.
The legal structure of the business.
Names and addresses of principals along with background information such as education and relevant knowledge and experience within the industry.
A description of the business with details such as age of the business, number of employees, and current assets You should also identify the way in which the business competes within the marketplace. Try to highlight the key points which make the business and its products stand out from its competitors. Show where the company is going and how the funding will help to achieve this.
Submit full financial information including profit and loss and balance sheets, lenders usually like to see the last three years. If you are starting or buying a business you should submit projected figures along with a business plan.
If you wish to add more weight to your proposal can offer security against either company or personal assets and you can supply this information in your proposal. However it may be prudent to keep this up your sleeve and try to raise the finance without giving away too much.
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