loan application letter sample

WTO / Applications / 20 Best Loan Application Letter Samples (Guide and Format)

20 Best Loan Application Letter Samples (Guide and Format)

An application letter for a loan is a formal letter written to a financial institution by a borrower requesting a loan, payable in a specified amount of time.

The letter helps lenders get acquainted with the borrowers better to determine if they qualify for the loan based on the information provided or not. Writing it is important because it helps convince lending institutions to lend you a specific amount of money. It is their first impression of you, which is why it should be written with great care. In this article, we will guide you on how to write it, the type of information you should provide, and some pointers that will help you highlight your strengths in the letter.

Brief Overview- What to Include

There are no strict rules for writing an application for a loan. It depends on the borrower to decide what information to include, but the following items are typically included in it:

• Contact information
• Explanation of why money is needed
•  Amount of money being requested
• Purpose of the money
• Details about employment history
• Personal references
• Company information
•  A list of supporting documents

When to Write?

Two main situations warrant this letter. The first instance is when you are seeking a loan from a conventional bank lender. Conventional bank lenders are financial institutions that do not offer loans but make them available to the general public. Conventional banks usually require applicants to submit this application to prove their creditworthiness.

The second situation that warrants its use is when applying for an SBA-guaranteed loan. An SBA-guaranteed loan involves the federal government; applicants must undergo additional screening before they are approved for funding. Applicants can improve their chances of getting an SBA guarantee by submitting a personalized, formal loan application with supporting documentation.

There are situations when you do not necessarily need to write this letter, such as when you are borrowing from friends and family, from an alternative lender who may only require your bank statements or pay slips, when seeking equipment financing, and lastly when you are requesting a business line of credit.

Free Templates

Pre-writing Considerations

Applying for a loan involves being prepared for anything, so it is important to have the things you need before writing. Do some research on your lender, and write down notes about why they are suitable for you and what you would like them to know about your project. Write those questions that may arise during the process of applying for your loan. Check your credit score and know your rights as a borrower when you apply for a loan.

After you have done all of the above, review everything and ensure that what you’ve written is easy to understand by someone who has not read your notes or audited your finances. When applying for a loan in a major financial institution or applying for an SBA loan, you will almost always be required to write an application letter for a loan. It is important to note that unless it is supported by a sound credit situation or proper financial planning, it may not be enough to help you secure the loan. 

Fortunately, there are two things that you can do to increase your loan limit and increase your chances of getting a loan. You can first check your business and personal credit scores from accredited credit reporting bureaus such as TransUnion, Equifax, and Experian and take the necessary steps to improve them.

The second thing that you can do is to prepare your business financial statements, i.e., your profit and loss statement, cash-flow statement, balance statement, etc., for the past six months and attach them to your letter. These documents are essential when applying for a loan as they help the financial institution assess your creditworthiness and increase your chances of securing a loan.

How to Write a Loan Application?

Writing it can seem daunting, but it can be a simple process if you follow the proper format and include all the required information.

The following is a summary of the information you must provide in your letter:

The header is an integral part of the standard business letter format. It should include:

• Your name and contact information : Make sure to include your full name, address, and contact information. This should include a mailing address with a zip code, a business email address, and your cell phone number where you can be reached.
• The date : Include the month, day, and year of the letter. You must ensure that you write the date on which the letter was created.
• The name of the recipient : This will be a bank representative in many cases, but it can also be an SBA representative or another financial institution to whom the borrower is addressing the letter.

Subject line

When writing it, make sure to include a clear subject line that will help the recipient understand the purpose of the letter. Make sure to include whether the loan is for personal or professional use in the subject line.

“Loan Request Application Letter.”

Address your letter correctly. If you do not know who will be reading it, write “ To Whom It May Concern .” If you are trying to get a business loan, address it to the company’s representative issuing the loan. If you are applying for a personal loan, address it to the bank or whoever provides it.

Introduction

It should begin with a brief statement of the goal and amount you are requesting. It should also state your qualifications for the loan and any other pertinent information that can be used for your evaluation as a borrower such as your financial status, your work history, the length of time you have been in business, etc.

The body is the main part of the letter, and it should contain all the information the recipient will need to decide whether to grant the loan or deny the request.

Some of the information that must be covered in the body includes:

• Basic business information : If you are writing it, the first item to include in the body of the letter is details about your business. This information will help the lender understand who you are and will serve as the foundation for your loan application. Some of the information that you should cover in this section includes your business’s registered name, business type (i.e., partnership , sole proprietorship, LLC , etc.), nature of your business (i.e., what you do), main services and products, your business model, the number of employees that you have, and your annual generated revenue.
• The purpose of the loan : You must explain why you need the loan and the purpose for which it is being requested. This can be to purchase or expand a business, for a personal reason, or to pay some debt.
• Present yourself as being trustworthy : To get a loan, you need to establish trust with the lender. This can be achieved by explaining what you do for a living, providing some identity documents, and demonstrating why you deserve to be trusted.
• Explain how you intend to pay back : Explain briefly how you plan on repaying the loan. This should include a timeline for repayment and be supported by evidence such as a business plan, personal financial statement, or credit report .
• Proof of financial solvency : In some cases, you will be asked to provide evidence that the funds requested are not your only source of income. Documents like bank statements or tax returns can help you prove that you have other sources of funding, which will increase the likelihood that your request will be granted.

In the conclusion, you must thank the lender for considering your request. Briefly mention all the attached financial documents. Remember that each lender has their own set of loan application requirements and may request different information or documentation from borrowers, so make sure to double-check the specific instructions provided by the lender.

Once you have finished writing the letter, be sure to sign it at the bottom. You may include phrases such as:

“Respectfully yours” or “Sincerely yours”.

Place your name and contact information directly above the signature line.

SBA Loan Application Letter Template

[Your Name]

[Your Address]

[City, State ZIP Code]

[Your Phone Number]

[Your Email Address]

[Loan Officer’s Name]

[Bank Name]

[Bank Address]

Dear [Loan Officer’s Name],

I am writing to apply for a Small Business Administration (SBA) loan to help fund my [business name]. I am excited to have the opportunity to present my business plan to you and explain why I believe my business is a great candidate for an SBA loan.

[Provide an introduction to your business, including its history, products or services offered, and unique selling proposition. Explain why you started the business and what sets it apart from competitors. This should be no more than two paragraphs.]

I am seeking an SBA loan in the amount of [$ amount], which will be used to [briefly explain how the funds will be used]. My business has experienced steady growth in recent years, but we need additional capital to take advantage of new opportunities and expand our reach.

[Provide a detailed explanation of how you plan to use the funds, including any expected return on investment. Be specific about the amount of money you need, how long you will need it for, and how it will be used.]

As part of my loan application, I have included the following documents for your review:

• Business plan
• Financial statements for the past three years
• Tax returns for the past three years
• Cash flow projections
• Articles of incorporation
• Personal financial statements for all owners

A list of collateral that will be used to secure the loan, if applicable

[Provide a comprehensive list of all the documents you have included with your application. Make sure you have included everything the bank has asked for, and any additional documents that may be relevant.]

I am confident in the future success of my business and believe that an SBA loan is the right choice for us. I understand that the loan application process can be lengthy, and I am committed to providing any additional information or documentation that may be required to support my application.

Thank you for considering my loan application. I look forward to hearing from you soon.

Loan Application Letter Sample

Make your small business loan application more polished with our simple sample letters. They’re crafted to help you convey your needs professionally and improve the impact of your request. 

Sample letter 1

Dear Sir/Madam,

I am writing to apply for a Small Business Administration loan to support my growing business, GreenTech Innovations. Established in 2018, we specialize in eco-friendly technology solutions. Our recent market analysis indicates significant growth potential in sustainable energy products.

To capitalize on this opportunity, we require additional funding for research and development, marketing, and expanding our team. An SBA loan would enable us to invest in these critical areas, fostering innovation and job creation. Our business plan, attached to this application, outlines our strategy for a sustainable and profitable future.

GreenTech Innovations has a strong financial track record, with consistent revenue growth over the past three years. We have maintained a healthy cash flow and have a solid plan for loan repayment, as detailed in our financial projections. Our commitment to financial responsibility and strategic growth makes us an ideal candidate for an SBA loan.

Thank you for considering our application. We are committed to contributing positively to the economy and the environment. Your support would be instrumental in helping us achieve our goals.

Jordan Smith

Owner, GreenTech Innovations

Sample letter 2

Dear Business Loan Officer,

I am reaching out to request a business loan for my company, Bella’s Boutique, a unique clothing and accessories store located in downtown Springfield. Since our opening in 2019, we have become a beloved part of the local community, known for our exclusive designs and personalized customer service.

This loan is sought to enhance our inventory, upgrade our in-store technology, and expand our online presence. These improvements are essential for keeping pace with the evolving retail landscape and meeting the growing demands of our customers. Our detailed business plan is attached for your review.

Financially, Bella’s Boutique has demonstrated resilience and growth, even amid challenging economic times. Our sales figures have shown a steady increase, and we have a clear plan for managing the loan and ensuring its repayment. We believe these factors make us a strong candidate for a loan.

Your consideration of our loan application is greatly appreciated. This funding will not only help Bella’s Boutique thrive but will also support the local economy by providing more employment opportunities and enhanced retail experiences.

Thank you for your time and consideration.

Warm regards,

Isabella Martinez

Founder, Bella’s Boutique

The effectiveness of these sample letters as a guide for someone seeking to write a loan application lies in several key aspects. Firstly, they demonstrate the importance of a clear and concise introduction, where the purpose of the letter is immediately stated, ensuring the reader understands the intent from the outset. This is crucial in any formal business communication. Both samples skillfully describe the nature and background of the respective businesses, providing just enough detail to give the reader a sense of the company’s identity and market position without overwhelming them with unnecessary information. This balance is vital in maintaining the reader’s interest and establishing the context of the request.

Moreover, the letters excel in explicitly stating the purpose of the loan, which is a critical component of any loan application. They outline how the funds will be utilized to grow and improve the business, demonstrating not only a clear vision but also a strategic approach to business development. This helps in building a sense of trust and reliability with the lender. Furthermore, the inclusion of financial health indicators, such as past revenue growth, cash flow management, and a repayment plan, adds to this trust by showing financial responsibility and foresight.

The writers also incorporate attachments like business plans and financial projections, which provide additional depth and substantiation to their claims. This shows thorough preparation and professionalism, which are highly regarded in the business world. Finally, the tone of the letters is appropriately formal yet approachable, and they conclude with a note of gratitude, reflecting good business etiquette. This combination of clarity, conciseness, relevance, and professionalism makes these letters exemplary guides for anyone looking to draft an effective and persuasive business loan application.

Tips for Writing

Following are some tips for writing this letter:

Be specific

Be sure to include specific details in it to keep the reader’s attention. Ensure that you include information about the purpose of the loan, how much money you need, and the reason why you are a good candidate for a loan.

Brevity is essential when writing this letter. Stick to the essential points and avoid extraneous details. This will help to ensure that your letter is easy to read and that the reader is not distracted by irrelevant information.

Address the appropriate person

Ensure that you address your letter to the most relevant party for your particular situation.

Consider contacting the bank to find out to whom it should be addressed. This is how you can be sure that it will get to the right person.

Use a proper format and layout

As with all letters, you should use clear, concise paragraphs and avoid unnecessary jargon. Make sure to use the appropriate format for formal letter writing and use a professional, polished layout.

Include business financial statements

The financial statements for your company must be attached to your letter if you are a business owner. In this way, the reader will better understand your overall financial situation and help demonstrate that you are a good candidate for a loan.

The following are some of the purposes for which you may request a small business administration loan: to start a new business, to buy new equipment or inventory for your company, to upgrade or expand an existing business, to cover unanticipated expenditures, to pay off high-interest debt, to fund marketing campaigns, to move your office to a new location, to buy insurance for your business, to purchase stock, to buy out shareholders, and for any other lawful reason authorized by the lender.

Key Takeaways

Here are the key takeaways from this article:

• When writing an application for a loan, be sure to provide specific details about the purpose of the loan, how much money you need, and why you are a good candidate for a loan.
• Use the standard business letter format and use clear, concise paragraphs.
• Brevity is vital when writing such a document, so mention only the essential points and avoid extraneous details.
• Address your letter to the most relevant party for your situation, and be sure to include your company’s financial statements.

About This Article

Was this helpful?

Great! Tell us more about your experience

Not up to par help us fix it, keep reading.

Applications , Forms

Application for texas title (form 130 u) – guide & overview.

40 Free Credit Application Forms and Samples

Applications , Forms , Guides

How to fill out a rental application form [expert guide].

Applications , Education

11 best college application essay examples (format guide), thank you for your feedback.

Your Voice, Our Progress. Your feedback matters a lot to us.

Published In: Applications

How to Write a Loan Application Letter (with Samples)

Sometimes we need financial assistance to push through with our business idea, education, medical emergencies, or any other personal project or goals that require a huge amount of money for its realization. Basically, it is for this reason that banks and other money lending institutions exist.

Applying for a loan from any lending institution requires the applicant to first fill out a form.  Along with this form, the applicant can attach a loan application letter that provides more details on what he/she intends to do with the money and an overview of how the loan will be paid.

As a loan applicant, you need to learn how to write the loan request letter in a polite and convincing tone to appeal to your lender for your loan to be granted successfully.

What is a Loan Application Letter?

A Loan application letter is a document that informs the financial lending institution of the amount of money you are asking for, a clear outline of what you intend to do with the money, and convinces the bank why you are a good investment risk. Because it is a request, a loan application letter should be written in a polite tone, short and to the point.

The Loan Application Process

Based on the financial institution you choose, the process and time it takes for you to receive funding may vary. However, the typical loan application process may take on the following critical stages:

Pre-qualification stage

Prior to the loan contract, the potential borrower receives a list of items that they need to submit to the lender for them to get a loan. This may include Identification proof, credit score, current employment information, bank statements as well as previous loan statements.

Immediately this information is submitted, the lender reviews the documents and makes a pre-approval- meaning the borrower can move on to the next phase of the loan application process.

Loan application

In the second phase of the loan origination process, the borrower fills-in the loan application form either electronically- through mobile apps, websites, or paper-based. The data collected is then tailored to specific loan products.

The aspects that are included in the loan application form include the following;

The payment method- if it will be personal, through a check, or via online banking.

The payment frequency- There are several payment frequency methods, for example, Monthly installments, annually, or if the loan will be paid once.

The amount of interest accumulated on the loaned amount. This is the amount of money charged by the lender to the borrower on top of the amount which he/she has loaned.

The assets in the form of properties of the borrower will serve as collateral damage/guarantees in case the borrower defaults loan repayment or is unable to make his payments as per the agreed time.

Application processing

Once the application is received by the credit department, it is reviewed for accuracy, genuineness, and completeness.  Lenders then use Loan Originating Systems to determine an applicant’s creditworthiness.

Underwriting process

This process only begins after an application is totally completed. In this stage, the lender checks the application in consideration of various accounts, such as an applicant’s credit score, risk scores, and other industry-based criteria. Today, this process is fully automated using Rule Engines and API integrations with credit scoring engines.

Credit Decision

Based on the results from the underwriting phase, the lender makes a credit decision. The loan is either approved, denied, or sent back to the originator for additional information. If the criteria used do not match with what is set in the engine system, there is an automatic change in the loan parameters, for instance, reduced loan amount or a different interest rate on the loaned amount.

Quality Check

Quality check of the loan application process is very critical since lending is highly regulated. The loan application is then sent to the Quality Control Team to analyze critical variables of the loan against internal and external regulations on loans. This is often the last step of the application process before funding is approved.

Loan funding

Once the loan documents are signed by both the borrower and the lender, funds are released shortly after. Nevertheless, business loans, loans on properties, and second mortgage loans may comparatively take more time to be approved due to legal and compliance reasons.

Essential Elements of a Loan Application Letter

Now that you have already understood the complex loan application process, it is important that you know the critical points to include in your loan request letter to convince your lender to give you a business loan.

Here is how to effectively write a loan application letter:

Header and greetings

The first and most important element of your business or personal loan application letter should be a header and an appropriate greeting.

In your header, include the following details:

• Your business names
• The physical address of your business
• Business telephone and cell phone numbers
• Lender’s contact details
• Lender’s or Loan Agent’s Name and Title
• A subject line stating the loan amount you are requesting for.

Once you have written your header, include a friendly but professional greeting to start off your loan application letter in a cordial tone.

Business Loan Request Summary

The body of your business or personal loan request letter should start with a brief summary of your loan request amount, why you need the loan, your basic business information, and why you are an ideal risk investment for the lender. This section should be brief and concise. Only include the relevant information to capture your loan agent’s interest and keep them reading the body of your loan application letter.

Basic Details about your Business

Ideally, this is the third paragraph of your loan application letter. Use a few short and concise sentences to give a clear outline of your business.

Be sure to include the details below:

• The legal name of your business and any DBA that your business uses
• Your business structure- if it is a corporation- partnership, individually owned, etc.
• A summary of what your business does.
• How long your business has been operational
• Total number of employees
• A brief description of your current annual revenue

Once you have provided your basic business information, it is time to write the meat of your business loan request letter- clearly explaining why you need the business loan and how you intend to recuperate the investment.

The purpose of the business loan

In the fourth paragraph of your loan application letter, explain succinctly how you will use the business loan. Additionally, tell the lender why your intended use of the business loan will be a wise business investment.

While detailing this section, be as specific as possible and demonstrate to the lender that you have carefully considered the kind of revenue generation this new debt will accomplish for your business. for instance, don’t just say that you intend to use the loan for working capital. Rather, say that you plan to increase your inventory by 45% or that you need to increase your Human Resources to 4 to generate more income by 6%.

In the same paragraph, inform the lender exactly how the loaned amount will help generate more profits necessary to cover repayment plus the interest accumulated on loan.

Proof that you’ll be able to fully repay the loan

In this section, you need to demonstrate to the lender that you can pay back the loaned amount together with interest as per the agreed repayment period. You will want to use any figures from your latest income statements or balance sheets to prove your business is financially healthy and that it is a low-risk investment decision for your lender. In case you have other existing debts, be sure to mention them and include a business debt schedule if possible. If your business is profitable, highlight that in your letter since it something that most lenders pretty much look for in successful loan applicants.

In addition to that, consider including specific cash flow projections to demonstrate to your lender how you plan to fit repayment of the loaned amount plus interest into your budget.

Sample: Loan Application Letter

Sample 1: business loan application letter.

Samira Mitchell,

Mitchell Face Masks Limited,

4680 Forest Road

939, New York.

January 17, 2021

Mr. Wesley Kingston

Guarantor Trust Bank

679, New York State

Ref: Loan Request for $10,000

Exactly two years ago, I started my small face mask vending business in our local market. Over the last two years, my business has picked up really well to an extent where I need to expand to a bigger face mask vending company.

It is for this reason that I am writing this letter. I am confident that there is a great market niche for face masks, especially due to the current worldwide Novel Covid-19 Pandemic. Thus far, I have had many repeat customers, new customer links through referrals, and my client base has grown rapidly. Generally, there is an increase in demand for my products; therefore, I am requesting for a loan amounting to $10,000 to be able to supply more and satisfy all my clients.

This money, along with the amount that I have saved up from my profits, will enable me to lease a large, modern storefront and to import supplies that will help me launch my business plan.

I have attached my business plan, my latest business balance sheets, current business schedules, as well as my credit history statements for your perusal and review. If you have any questions or need any further clarifications, please contact me directly on (111) 345 679 or email me at Mitchel.facemasksltd.co.ke. Thank you for your consideration.

Samira Mitchel.

Sample 2: Personal Loan Application Letter

Dear Michael,

It is common for everyone to face difficult situations and bitter realities in life. I am currently facing a situation where everything seems bleak, and there seems to be no way out of this difficult situation. I am in debt, and I need to pay at least 30% of my house’s mortgage will be taken over by the bank, and I am currently ailing and weak, I’ll not be able to survive such a nervewrecking situation.

The only way I can avoid such a fate is by paying the full amount that is needed by the bank. I can be able to do so if I am allowed to take out a loan from the office, which is a privilege that the company has granted to all the employees. I would be thankful if the company allows me to borrow the money against my monthly pay.

Mr Brandon Brown

Do’s and Don’ts of Writing a Loan Request Letter

A loan application letter may increase or break your chances of receiving funding from any lending institution. This is because it is the first thing that lenders look for in the underwriting process when you submit an application. That said, you must know the dos and don’ts of writing a winning loan request letter to help you receive the funding that you really need.

• Check your personal and business credit scores before sending a loan request letter and take the necessary steps to improve them.
• Have all your financial statements ready, including cash flow statements, business balance sheets, P$L statements, etc
• Make sure to submit all your relevant credentials along with your loan application request letter.
• Always provide the correct and factual information to avoid fraudulent consequences.
• Don’t make your letter too long and unnecessarily wordy
• Don’t use an informal format while writing the loan application letter. Instead, follow the proper rules on writing formal letters
• Don’t include any false information in your loan request letter- be it your business’s current financial health, assets, and liabilities that may be used as collateral damage in case you default payment or why you need the money.

Things to Remember When Writing a Loan Application Letter

Generally, you should always consider the following essential tips if you want to write a winning loan application letter:

• The loan application letter is a formal document. Therefore, observe the proper rules of writing a formal letter.
• Clearly state your intent to borrow a given amount of money
• Provide a vivid but brief description of why you need the money. Your explanation should be concise, genuine, and transparent. While at it, explain how you plan to use the loaned amount and be very sincere about it.
• Explain why your business is a low-risk investment decision for the lender.
• Enumerate your assets and liabilities
• Include the time, date, manner, and method that you will use to make your payment.

Free Loan Application Letter Templates

Are you looking to get some financing for your business or personal emergency? Download our free, well-crafted Loan application letter templates to help you customize your loan request letter. Our Templates includes all the critical elements of a winning loan request letter that will successfully help convince your lender to grant you the funding you need. Download our templates today to help you get started!

Collateral is defined as something that helps secure a loan. Generally, based on the type of lending institution you pick, the lender will give you less than your pledged asset value. Lenders every so often quote an acceptable loan to value ratio, meaning that if you borrow against your house, for example, and it worth $400,000, you will be given a loan amounting to $380,000. Again, this depends on the bank.

The prepayment penalty is a fee that some lenders charge if you pay off all or part of your loan before the loan’s maturity date. These do not usually apply if you pay extra principal on your loaned amount in small amounts at a time. However, it is good that you counter check with your lender.

Every lender follows a different criterion to approve a business or personal loan. The application process depends on several factors; therefore, the time taken to receive funding in your account may take anywhere from a few minutes to several days. This depends on the type of institution you choose and the type of loan you are asking for.

Acquiring a loan is sometimes a necessity in one’s business or personal life.  Nonetheless, it is not always easy to get a loan as lenders are wary of granting loans due to loan repayment defaults and fraudulent borrowers. This article has provided you with great insight on loan application letters, the loan application process, essential tips for writing a winning loan application letter, and the dos and don’ts of writing a convincing loan request letter. If you keep these things in mind every time you are thinking of applying for a loan, you are sure to get the funds you need to ensure the smooth running of your business and sort any personal emergency that may come your way.

Related Documents

Word & Excel Templates

Printable Word and Excel Templates

Loan Application Letter

Applying for the loan requires you to provide a lot of documentation. Some organizations ask you to fill out the loan application form, while in some cases, you have to write a loan application letter to the institute to apply for the loan.

The loan application letter allows you to add all the details that you are required to provide. The letter is written to the loan manager of the company, and he then decides whether he should accept the application or not. The letter should include the personal information of the applicant, and since it is a formal letter, it should be written to the point by avoiding unnecessary details. The lender should follow a standard format while writing the loan application letter. The loan manager should be told about the intended use of the money.

The first paragraph of the letter should state the reason for lending the money. It should be assured in the letter that you will not use this money for any illegal purpose. The date on which the applicant will return the borrowed money should be mentioned in the letter.

You should also include information about you in the letter that can make the reader feel that you are a trustworthy person. Here is a sample letter that can help you learn about the structure and format of the letter.

Loan application letter:

Dear [Recipient’s Name],

It is stated that I am writing this letter to request a loan from the finance office of your company because of some of my very peculiar and essential needs. My mother is seriously ill, and I must get her treated at the hospital, for which I need money. Please accept my loan application and sanction me $2000. I assure you that I will return you the loan from the deductions of my gross salary.

I will be highly grateful for this favor of yours.

I am looking forward to your reply.

[Your Name]

Preview and Details of Template

File:  Word  ( .doc ) 2003 + and  iPad  Size: 31 KB

More options

I am writing this letter to get a loan from your bank branch situated in New Jersey. Currently, I am working as a sales executive for ABC Organization and need a $10,000 loan. I am in utmost need of this amount as I have to meet the surgery expenses of my father. I have gone through all the requirements related to the loan process and have enclosed the necessary documents along with this email. Please let me know what other documents I need to send you, and you can call me at any time for further queries. I hope you will give a positive response to my request.

This application is a request to ask for a loan from your organization. I am Christiana Roseland, and I am currently running a bakery in New Jersey. I am planning to open a new branch according to the rising demand of people. For this purpose, I need $70,000/- and I will return the amount in installments. I have thoroughly read the rules and policies for the loan process and hopefully, I will return the entire amount within the given time period and the financial pronouncement has been affixed with this application. Waiting to get positive feedback from you.

This letter is a request for a loan application to construct a house. I am the managing director at ABC Company, and my monthly salary is not adequate to meet the construction expenses. I will return the due amount according to the company’s rules and policies and will not let you be disappointed. I contacted the admin office to find out the details, and Mr. Jackson has provided me with all the information. If you need additional information, you can ask me at any time. Thank you for taking my request into account.

Dear Madam, I, Darcy Louis, work in the security office of your company. I live in Valley Stream and travel two hours daily to come to the office. I do not have a personal vehicle, and sometimes it creates a lot of difficulties, and I often arrive late to the workplace. I want to apply for a loan because I have to buy a motorcycle. I need $10,000 in this regard. I have chosen a six-month installment plan, and 20% of my salary will be deducted each month. I request that you accept my loan application. I will be grateful to you. Thanking in anticipation.

Dear Sir, I am Dorothy John, and I live in Toronto. I am running a branch of ABC School. The strength of students is increasing with each session, and it is becoming difficult to adjust to the large number of students in a limited space. Therefore, I need to open a new branch adjacent to the current school and construct a new building, but I do not have enough money. I learned about your loan policy and want to apply for it. I have attached the needed documents along with the application. I am hoping to hear a quick response from you.

I am Julia Hughes, and I am writing this message to ask for a loan from your bank. I have an account in your Brooklyn branch, and my account number is [#]. I have a small business marketing in Brooklyn, and I intend to open a new branch in the Netherlands. Hence, it can be a source of ease for hundreds of people. The savings I have and the loan I am asking for will be of great help in expanding my business. Kindly send me an email detailing all the formalities for the loan process. I would like to ask you to send me a confirmation message so I may visit your branch on an immediate basis.

• Letter Requesting Transfer to another Department
• Letter Requesting Promotion Consideration
• Umrah Leave Request Letter to Boss
• Ramadan Office Schedule Announcement Letters/Emails
• Letter to Friend Expressing Support
• Letter to Employer Requesting Mental Health Accommodation
• Letter Requesting Reference Check Information
• Letter Requesting Salary Certificate
• Letter Requesting Recommendation from Previous Employer
• One Hour Off Permission Letter to HR
• Payroll Apology Letter to Employee
• Advice Letter to Subordinate on Effective Communication
• Advice Letter to Subordinate on Time Management
• Letter to Patient for Feedback/Responding Survey/Online Form
• Holiday Cocktail Party Invitation Messages

Letters.org

The Number 1 Letter Writing Website in the world

Sample Loan Application Letter

Last Updated On December 25, 2019 By Letter Writing Leave a Comment

Loan application is written when the applicant wants to seek monetary assistance in the form of loan mostly on a mortgage of property. Since it is a request, the letter should be written in a polite tone.

Use the following tips and samples to write an effective loan application letter to a bank manager or a company.

Sample Loan Application Letter Writing Tips:

• As loan application letter is formal, the phrases and words should be chosen carefully.
• The language used should be simple and easy to understand
• The content of the letter should be short and straightforward.

Sample Loan Application Letter Template

__________ (Branch Manager’s name) __________ (Branch address) __________ __________

______________ (Your name) ______________ (Your address) __________________

Date __________ (date of writing letter)

Dear Mr. /Ms_____________ (name of the concerned person),

I have a savings account in your bank with account no._________ for the past …………… years. I want to apply for a ……………..(type of loan) loan for ………………….(state purpose) .

If you can inform me about the details and formalities required for seeking the loan, I shall make all the arrangements and meet you at the earliest.

Looking forward to meeting you,

Thanking you,

Yours Sincerely,

___________ (Your name)

Sample Loan Application Letter Sample, Email and Example/Format

Pavan Kumar 3214 Breeze apts Worli Hyderabad

The Branch Manager, Axis Bank, Station Road Branch, Hyderabad

30th September 2013

Subject: Loan application letter

Dear Sir/Madam,

I have a savings account in your bank for the last five years. I want to avail a home loan from your bank. I would like to know the details to seek a home loan from your bank.

I am a salaried employee, and I work for a central government organisation as a research scientist. You can verify my salary certificate and other details.

As the home loan interest rates have down, I would like to utilise this opportunity to buy a house. I have already booked a flat in Banjara Hills Hyderabad, and I need about Rs 35 lakhs as the loan amount. With my pay scale, I think I am eligible to seek a loan for this amount.

If you can send your representative to my place, we can discuss and finalise the loan. I shall keep all the documents ready so that there will not be a delay in processing the loan.

Looking forward to hearing from you,

_____________

Pavan Kumar

Email Format

A loan application letter is written to ask for financial credit service on some secured mortgage basis. As it is our requirement, the words should be so humble and sincere that the banker or the lender acquires total trust on the applicant. Loan application letter helps the loan applier to appeal for the various types of loans whichever he wishes to depend upon certain conditions.

I have sent this letter to you to explain my reasons behind requesting a loan modification on my mortgage. I wish to purchase a Mercedes Benz 300 Limousine costing Rs 56 lakhs. I am seeking an interest reduction down to 6.25% from my current 8.80%. I feel it is a fair percentage for you, and it is just within my means.

Without a reduction on the interest, I will not be able to afford the monthly payments. I have to choose between a loan modification and a foreclosure. I would far prefer the former, and you probably would as well. 6.25% is the most I will be able to manage, even if I cut all of my expenses out of the picture. Please consider my application seriously, and I hope to hear more from you on the matter.

Yours Faithfully,

____________

Jimmie Verna Melendez.

Related Letters:

• Sample Application Letter
• Sample Job Application Cover Letter
• Sample College Application Letter
• Sample Application Cover Letter
• Sample Scholarship Application Letter
• Job Application Letter
• Transfer Application
• Application Letter by Fresher
• Application Letter for Referral
• Business Application Letter
• College Application Letter
• Credit Application Letter
• General Application Letter
• Good Application Letter
• Grant Application Letter
• Letter Of Intend Application
• Job Application E-Mail Template
• Job Application Letter Format
• Job Application Letter Template
• Receptionist Application Letter
• Solicited Application Letter
• Summer Job Application Letter
• Work Application Letter
• Unsolicited Application Letter
• Corporation Application Letter

Leave a Reply Cancel reply

You must be logged in to post a comment.

Find the best business loan rates (2024)

How to Write a Loan Request Letter to Get Your Small Business Funded

TABLE OF CONTENTS

If you want to get business financing from your bank or the Small Business Administration (SBA), you’ll need to know how to write a loan request letter. 

Indeed, your bank’s underwriter will look for your business loan request letter when reviewing your application. The SBA expects you to have one, too.

A well-written letter requesting a loan can make the difference between having your application approved and it getting turned down.

Here’s what you need to know about how to write a loan letter, including when you need one, what you’ll need before writing one, what format you should use, examples to review and a loan request letter template to write your own.

What Is a Business Loan Request Letter?

A business loan request letter is correspondence a borrower writes and submits to a bank as part of the loan-application process. 

Business loan request letters include the following:

• Loan amount 
• Planned use of funds
• Explanation of why you should be funded 
• Details about how you plan to repay your loan 

When You Need a Loan Request Letter

There are 2 main financing situations when loan request letters are called for:

• When you’re requesting a loan from a conventional bank lender and you want to demonstrate that your business is growing and financially viable
• When you’re applying for a loan from the SBA , which recommends you begin your loan proposal with a cover letter or executive summary

If either situation applies to you, you should know how to write a loan letter.

There are situations when you don’t necessarily need a loan letter, including:

• You’re requesting a term loan online from an alternative lender, who may only require recent bank statements  
• You’re seeking equipment financing , in which case the equipment itself will serve as collateral
• You’re requesting a business line of credit , which only may require recent financial statements or business bank statements

Prerequisites for Writing Loan Request Letters

While a loan request letter may be needed for bank and SBA loans , it won’t be enough for approval unless it’s supported by a sound credit situation and solid financial planning. For your request to be persuasive to lenders, you should do 2 things before preparing your business request letter and loan application package:

• Check your personal and business credit scores and take any steps you can to improve them
• Prepare the business financial statements you’ll need for your loan package

Your personal and business credit scores and business financial statements will help lenders assess whether you’re a good financial risk and will lend weight to your loan request letter. Business financials should be submitted with your loan application along with your cover letter. 

Essential financial statements you will need include:

• Profit-and-loss statement (also called an income statement)
• Balance statement
• Cash-flow statement

Business Loan Request Letter Format

When you write your loan request letter, it’s recommended to keep it to 1 page while including the following key elements:

Heading and Greeting

The very top of your letter for a loan application should include contact information, a subject line as a header and a greeting as follows:

• Your name and contact information
• The date of your letter
• The name, title and contact information of your loan agent
• A subject line stating that you’re writing about a loan and specifying the dollar amount you’re requesting

Summary of Your Small Business Loan Request Letter

Start by briefly stating the purpose of your letter and the amount you’re asking to borrow.

Basic Information About Your Business

This should include:

• Your company’s legal name
• Your company’s legal structure ( sole proprietorship , partnership, limited liability company, S corporation, etc.)
• A brief description of what your business does
• How many years you’ve been in business
• How many people you employ
• Your annual revenue and profit

Explanation of the Purpose of Your Loan

Tell your lender how you plan to use the loan. Be as specific as possible, citing numbers to quantify your goals. For instance, instead of saying you plan to use the loan for advertising, specify what types of advertising you’ll use, how much each will cost and the percentage of new customers or increased revenue you hope to gain.

Summarize Your Ability to Repay the Loan

Touch on your credit history and highlight key data from your financial statements that reflect your ability to repay your loan, including:

• Summaries of recent profit-and-loss or balance statements demonstrating that your business is financially healthy and growing
• Schedules for repaying any other business debts you already owe
• Cash-flow projections that indicate when you’ll be able to budget repayments for your loan’s principal and interest

Concluding Elements

The end of your letter should include:

• A paragraph referring to your attached financial statements
• A concluding paragraph asking the loan officer to review your package and expressing your anticipation of speaking with them soon
• Your signature
• A list of enclosures, including your financial statements and any other documents that are required for your loan application. You may also need to provide your business partners’ financials, including for SBA-backed loans .

Don’t want to write a loan request letter? We’ve got you covered.

Loan request letter templates and samples.

Here are loan request letter samples and templates you can use to create your own letter. 

Sample Request Letter for a Working Capital Loan to Support Expansion

ABC Builders

123 Park Lane

Miami, FL 33145

Jan. 1, 2020

Senior Loan Officer

987 Spring Road

Philadelphia, PA 19115 

Re: Small business loan request for $100,000

To Mr. Doe,

ABC Builders is a successful business that is well established in the building and renovation industry. We began operation with 3 employees in January 2010 as a small company offering renovation services to local businesses and homeowners. We now have 20 employees. We advertise on our website, ABCBuilders.com, and market on social media channels as well as at home building expos. 

Last year, our annual sales totaled $3.5 million. In the first year of business, we earned a net profit of $1 million. Additionally, we have maintained a steady balance in the past 10 years.

Because of increasing interest from prospective clients in neighboring cities, we have decided to open a second location. The loan we are requesting is for this additional location, which we anticipate will increase revenue by $300,000 in the first quarter following opening.

Startup costs can be costly, and we require funding to purchase supplies and equipment. However, we anticipate strong sales for the new branch and have immediate work opportunities, which will contribute to our loan repayments. 

The loan of $100,000 we are requesting will provide us with the funding we need to help successfully open our second location. I have attached the contracts we have in the new location, pending equipment availability and ability to complete the project as well as our business plan with a breakdown of costs and detailed market analysis. 

Thank you for reviewing this letter and the accompanying financial documents. I look forward to hearing from you at your convenience.

Jack Smith [signature]

Enclosures: Business plan, profit-and-loss statement, balance statement, cash-flow statement 

Sample Loan Request Letter to Fund the Salary of a New Hire

Chief Executive Officer

Dear Mr. Smith:

I am writing this letter to request a small business loan in the amount of $100,000 for the purpose of hiring additional staff. 

My business, ABC, Inc., is a growing company that serves clients in the food-service industry. You can follow our success online at www.ABCInc.com.

ABC, a corporation, began operation in January 2016 with 5 workers and 1 location. We have grown consistently in the past 4 years. We now employ 15 workers and have expanded to 2 locations.

Last year, our annual sales revenue was $2.8 million and we generated a net profit of $975,000. We have maintained our cash flow consistently over the past 2 years and have generated a net profit each year we’ve been in business.

To promote our continued growth, we plan to hire a full-time manager this year to oversee our business operations. We are requesting working capital funding to continue our expansion efforts and cover the cost of the new manager’s salary and benefits. In addition, in an effort to retain top talent, we plan to offer an enticing relocation package and signing bonus. This new hire will streamline operations and lead to efficiencies totaling $150,000. 

We would like to pursue this endeavor in the second quarter of 2020, but this venture will require more funding than our current cash flow can sustain. Although we lack a lump sum large enough to cover this additional expense, our budget can allow for monthly payments over time given sufficient financing.

A loan in the amount of $100,000 will enable us to acquire the right talent to facilitate our expansion. Our projections, which are enclosed, indicate that increased efficiency and sales will generate enough increased revenue to repay this loan by 2023.

Attached, please find our business plan and our most recent financial statements for your review. Based on these strong financials and our business credit score of 90, we are confident that you will find us a safe credit risk.

Thank you for reviewing this request letter and the accompanying financial documents. I look forward to hearing from you at your convenience.

Jane Doe [signature]

Jane Doe, Chief Executive

Enclosures: Business plan , profit-and-loss statement, balance statement, cash-flow statement

Additionally, you can use the following example to create your own term loan request letter format.

Loan Request Letter Template

[Your name]

[Your title]

[Your business name]

[Your business address]

[Your city], [Your state] [Your ZIP code]

[Loan officer’s name]

[Loan officer’s title]

[Loan officer’s company]

[Loan officer’s address]

[Loan officer’s city], [Loan officer’s state] [Loan officer’s ZIP code]

Re: Small business loan request for $[amount]

Dear [loan officer’s name]:

I am writing this letter to request a small business loan in the amount of $[amount] for the purpose of [summarize the purpose of the loan here]. My business, [your business name], is a growing company that serves clients in the [type of business] industry. You can see our success online at [list your website and any social media profiles you want to showcase].

[Your business name], a [business legal structure], began operation in [date you began operation] with [number] workers [if applicable], and has grown consistently over the past [number] years. We now employ [number] workers [if applicable].

Last year, our annual sales revenue was $[amount], with a net profit of $[amount]. [If you are not profitable, you can omit mention of net profit here.] We have maintained our cash flow consistently over the past [number] years, and have generated an annual net profit each year we’ve been in business [if applicable].

[Explain the reason for the loan request here. For example: To promote our continued growth, we plan to hire a full-time administrative assistant and a sales representative this year. We are requesting funding to cover the cost of their salaries and benefits. (Substitute appropriate language applicable to your business plan.)]

We would like to pursue this next quarter [specify time frame], but this will require more funding than our current cash flow can sustain. Although we lack a lump sum large enough to cover this additional expense, our budget can easily cover monthly payments over time given sufficient financing. A loan in the amount of $[amount] will enable us to cover labor costs for our two new employees. Our projections indicate that increased efficiency and sales will generate enough increased revenue to repay this amount by [date].

Attached, please find our business plan and our most recent financial statements for your review. Based on these strong financials and our business credit score of [score], we are confident that you will find us a safe credit risk.

[Your signature]

[Your name printed]

Enclosures: Business plan, profit-and-loss statement, balance statement, cash-flow statement [list other documents included.]

You also can find loan request letter templates and sample letters online.

Here are a few websites offering examples of business loan application letters you can refer to when writing your own loan request letter:

• If you’re wondering how to write a letter to a bank manager for a loan, check out RequestLetters.com .
• LiveCareer offers a loan application sample letter as well.
• Refer to these loan request samples , too. 

Mastering the Loan Request Letter Format

A loan request letter is essential if you’re applying for a loan from a conventional lender or the SBA. Add weight to your request by optimizing your personal and business credit scores and including your business financial statements. 

Follow the proper format when writing your letter, including a header and greeting, a summary of your request, basic information about your business, an explanation of the purpose of your loan, a summary of your ability to repay your loan and, finally, appropriate concluding elements. Use a template to make writing your loan request letter a little easier.

• About the Author
• Latest Posts

Why Is the Federal Reserve Raising Interest Rates (and What to Expect)?

When Are Small Business Taxes Due?

48 Ecommerce Statistics to Know This Year

13 Best Industries to Invest in for 2024

On a similar note..., you may also like..., explore our most popular tools.

You’re subscribed!

Personal Loan Request Letter (Format & Sample)

A personal loan request letter is a letter written by a loan applicant and addressed to a financial institution, introducing the applicant, and supporting their loan application. Anyone wanting to take out a personal loan should write a personal loan request letter to introduce themselves to their target banking institution. The purpose of the letter is to request a loan formally and to demonstrate that they can repay the loan amount requested.

In short, the applicant needs to use this letter to demonstrate to the bank that they are a reasonable financial risk.

How to Write a Personal Loan Request Letter

This is a professional document, so write professionally and use a formal format for your letter. Write clearly and concisely, and send supporting financial documents. These documents might include tax returns, paycheck stubs, and bank account balances. You might want to include collateral information you can use to obtain the loan, such as a car, a boat, or a house.

Tip: Your personal loan request letter is the first document the lender will see when applying for a loan. Address it to a person, not a title. Addressing the loan administrator by name can positively influence their first impression of you as a borrower. You can ask for this information at the bank, or you can look for the information on the bank’s website.

What a Lender Needs to Know

Lenders are primarily concerned with your ability to repay the amount you are requesting as a loan. However, a lender must have some other information about your loan request before they can judge your ability to repay the loan. Here is what to include in a personal loan application letter:

• The amount of the loan you are requesting
• Your name and contact information
• Your status as a borrower, such as bank accounts and income information
• Any property you might have as collateral for the loan
• The intended use of the loan funds
• The expected benefit of the use of funds
• A detailed list of enclosed documents, including your loan application

This might sound overwhelming, but it is really quite simple. For example, if you have a home in need of a renovation, you might ask for a loan of the amount needed to perform the renovation. In writing your letter, you would state the renovation as the intended use of the funds and the return on investment (ROI) you anticipate as the expected benefit the renovation will provide.

Personal Loan Request Letter Format

{your name}

{your address}

{recipient name}

{recipient title}

{financial institution name}

{financial institution address}

RE: Personal loan request for {amount}

Dear {recipient}:

The purpose of this letter is to request a personal loan in the amount of {amount}. I intend to use the funds to {intended use}. {Use this space to briefly discuss the use of the funds and the expected benefit from this use.}

Attached, please find my loan application. I have also enclosed my most recent tax return, current bank account statements, proof of my income, and a list of my current assets. These financial documents and my credit score of {number} combine to make me a strong credit risk for {financial institution name}.

I would greatly appreciate the opportunity to discuss my personal loan application with you. I can be reached at {your phone number} or {your email address}.

Thank you for your time and your consideration of my loan application.

{your signature}

Sample Personal Loan Request Letter

2004 South Perkins Street

Bowen, TX 89556

August 22, 2022

Mr. Jacob Harrison

Personal Loan Administrator

Bank of Texas

4886 West 93 Street

Bowen, TX 89558

RE: Personal loan request for $6,000

Dear Mr. Harrison:

The purpose of this letter is to request a personal loan in the amount of $6,000. I intend to use the funds to renovate my home’s outdated bathroom. I have attached the best estimate for the renovation and an estimate of the return on investment for this renovation. As you can see, the ROI expected increases my home’s value by an amount greater than the cost of the renovation.

Attached, please find my loan application. I have also enclosed my most recent tax return, current bank account statements, proof of my income, and a list of my current assets. These financial documents and my credit score of 724 combine to make me a strong credit risk for Bank of Texas.

I would greatly appreciate the opportunity to discuss my personal loan application with you. I can be reached at 987-234-5889 or [email protected] .

Personal Loan Request Letter (Word Template)

The purpose of a personal loan request letter is to support your loan application positively. Be clear about your financial circumstances and the benefits the loan can provide. This supporting information, written clearly and concisely, can assist you in getting the loan you need to accomplish your goals.

How did our templates helped you today?

Opps what went wrong, related posts.

Block Letter Format: Rules (with Examples)

Statement of Purpose Examples

Restaurant Apology Letter to Customers

Proof of Residency (Tennessee)

California Proof of Residency (CA)

Proof of Residency Texas

Proof of Residency Ohio

Proof of Residency VA (Virginia)

Thank you for your feedback.

Bank Loan Request Letter Sample: Free & Effective

In this article, I’ll share my insights and provide a step-by-step guide, including proven templates , to help you write an effective bank loan request letter.

Key Takeaways

• Understanding Loan Request Letters: Gain insight into the purpose and structure of effective bank loan request letters.
• Step-by-Step Guide: Follow a simple, structured approach to craft your loan request letter.
• Templates Included: Use the provided templates to create a personalized loan request letter.
• Real-Life Examples: Learn from actual experiences and examples to better understand what banks look for.

Understanding the Purpose of a Loan Request Letter

A bank loan request letter is your opportunity to present a compelling case to the lender. It’s not just about stating your need for funds but about showcasing your financial responsibility, business acumen, and planning skills.

Key Points:

• First Impression: The letter is often the first interaction with the lender.
• Information Conveyance: It conveys crucial information about your financial need and repayment plan.
• Persuasion Tool: A well-written letter can significantly influence the lender’s decision.

Crafting Your Letter: A Step-by-Step Guide

1. gather necessary information.

• Understand the loan requirements.
• Prepare financial statements and business plans.

2. Start with a Professional Format

• Use a formal business letter format.
• Include your contact information and the date.

3. Introduce Yourself and Your Business

• Briefly describe who you are and what your business does.
• Highlight your experience and achievements.

4. State the Purpose of the Loan

• Clearly define why you need the loan.
• Explain how the loan will benefit your business.

5. Detail Your Financial Information

• Include relevant financial statements.
• Showcase your ability to repay the loan.

6. Conclude with a Call to Action

• Politely request the bank to consider your loan application.
• Indicate your availability for further discussions.

7. Proofread and Edit

• Ensure there are no errors or omissions.
• Maintain a professional tone throughout.

Real-Life Example: Success Story

In my experience, one of my clients successfully secured a significant loan by clearly outlining their business growth plan, demonstrating past successes, and providing a detailed repayment strategy. The key was clarity, precision, and a touch of personal storytelling.

Loan Request Letter Template

[Your Name] [Your Address] [City, State, Zip Code] [Email Address] [Phone Number] [Date]

Trending Now: Find Out Why!

[Lender’s Name] [Bank’s Name] [Bank’s Address] [City, State, Zip Code]

Dear [Lender’s Name],

I am writing to request a loan of [Amount] for [Purpose of the Loan]. As the owner of [Your Business Name], I have outlined a detailed plan for how these funds will be used and the projected growth they will facilitate.

[Insert a brief description of your business, its history, and any notable achievements.]

The loan will be utilized for [specific use of the loan funds]. This investment is crucial for [reason for the loan], and I have attached a detailed business plan and financial projections to illustrate the potential return on investment.

[Include information about your financial situation, any collateral you are offering, and your plan for repayment.]

I am committed to the success of [Your Business Name] and have a robust plan in place to ensure the timely repayment of the loan. I am available to discuss this application in further detail at your convenience.

Thank you for considering my request. I look forward to the opportunity to discuss this further.

[Your Signature (if sending a hard copy)] [Your Printed Name

Writing a bank loan request letter is a critical step in securing funding. It’s about presenting a clear, concise, and compelling narrative that aligns your needs with the lender’s requirements. Remember, it’s not just about the numbers; it’s about the story behind them.

I’d love to hear your thoughts and experiences with loan request letters. Have you tried writing one? What challenges did you face? Share your stories in the comments below!

Frequently Asked Questions (FAQs)

Q: What is the Most Important Aspect of a Bank Loan Request Letter?

Answer: The most crucial aspect of a bank loan request letter is clarity in communicating the purpose of the loan. 

In my experience, a well-defined objective, backed by a solid business plan and clear financial projections, significantly increases the chances of approval. It’s essential to concisely convey why you need the loan, how you plan to use it, and how you intend to repay it.

Q: How Detailed Should Financial Information Be in the Letter?

Answer: Financial details should be comprehensive yet succinct. From my experience, including key financial statements like income statements, balance sheets, and cash flow projections is vital. 

However, the trick is to balance detail with brevity. You want to provide enough information to assure the lender of your financial stability without overwhelming them with data.

Q: Is Personal Information Relevant in a Business Loan Request Letter?

Answer: Yes, to some extent. In my dealings, I’ve noticed that including a brief background about yourself, your experience, and your role in the business helps build a connection with the lender. 

It adds a personal touch and can boost your credibility, especially if your personal journey reflects your business acumen and commitment.

Q: How Formal Should the Tone of the Letter Be?

Answer: The tone should be formally professional. In all my letters, I maintain a balance between professionalism and approachability. You want to come across as respectful and serious about your request, yet accessible and personable. 

Avoid overly technical jargon or casual language; aim for clear, straightforward communication.

Q: Can Including a Repayment Plan Improve Chances of Loan Approval?

Answer: Absolutely. In my experience, outlining a clear and realistic repayment plan in your letter can significantly improve your chances of approval. 

It demonstrates responsibility and foresight, showing the lender that you’ve thought through the financial implications of the loan and have a plan to manage your debts effectively.

Q: Should I Mention Collateral in the Loan Request Letter?

Answer: Yes, mentioning collateral can be beneficial. In my practice, I’ve found that specifying collateral not only increases the credibility of your loan request but also provides the lender with added security, making them more inclined to approve your loan. However, be clear and precise about what you are offering as collateral.

Q: How Long Should a Bank Loan Request Letter Be?

Answer: Ideally, keep it to one page. Throughout my career, I’ve learned that brevity is key. Lenders are busy, and a concise, well-organized letter is more likely to be read and appreciated. 

Stick to the essentials and avoid unnecessary details. If more information is needed, the lender will ask for it.

Related Articles

Loan repayment letter sample: free & effective, sample letter to bank for name change after marriage, request letter for cancelling auto debit: the simple way, sample letter informing change of email address to bank: free & effective, sample letter for cheque book request, sample letter to creditors unable to pay due to death, leave a comment cancel reply.

Your email address will not be published. Required fields are marked *

Start typing and press enter to search

Writing a Loan Application Letter That Works

In this guide, I’ll share my personal tips, real-life examples, and three unique templates to help you write a loan application letter that works.

Key Takeaways

• Purpose of a Loan Application Letter : Explain why you need the loan and how you plan to use the funds.
• Essential Elements : Include your contact information, a formal greeting, a clear purpose, a detailed financial plan, and a professional closing.
• Tone and Language : Maintain a polite, respectful, and professional tone.
• Personal Experience Tips : Highlight your financial stability, previous successful loans, and your commitment to repayment.
• Templates : Three unique and customizable templates to suit different needs.

Understanding the Purpose

The primary purpose of a loan application letter is to provide the lender with a clear understanding of why you need the loan and how you plan to use it. It should also demonstrate your ability to repay the loan. From my experience, being transparent about your financial situation and future plans significantly increases your chances of approval.

Elements of a Successful Loan Application Letter

Tips from Personal Experience

• Be Specific : Clearly outline the purpose of the loan. For instance, if you need a loan for home renovation, specify the projects you plan to undertake.
• Provide Evidence : Include any relevant documents that support your application, such as business plans, invoices, or contracts.
• Show Stability : Highlight your financial stability by mentioning your employment status, income, and any assets you have.
• Repayment Plan : Detail your plan for repaying the loan, including timelines and amounts.

Real-Life Example

When I applied for a loan to expand my small business, I included a detailed business plan showing projected revenue and expenses. I also attached contracts from new clients that demonstrated the demand for my services. This thorough approach impressed the lender and led to a successful loan approval.

Template 1: Personal Loan Application

[Your Name] [Your Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date]

[Loan Officer’s Name] [Bank’s Name] [Bank’s Address] [City, State, ZIP Code]

Trending Now: Find Out Why! {"title":"Trending Now: Find Out Why!","limit":"5","offset":0,"range":"all","time_quantity":24,"time_unit":"hour","freshness":false,"order_by":"views","post_type":"post, page","pid":"","cat":"","taxonomy":"category","term_id":"","author":"","shorten_title":{"active":false,"length":0,"words":false},"post-excerpt":{"active":true,"length":"15","keep_format":false,"words":true},"thumbnail":{"active":false,"build":"manual","width":0,"height":0},"rating":false,"stats_tag":{"comment_count":false,"views":"1","author":false,"date":{"active":false,"format":"F j, Y"},"category":false,"taxonomy":{"active":false,"name":"category"}},"markup":{"custom_html":true,"wpp-start":" ","wpp-end":" ","title-start":" ","title-end":" ","post-html":" {title} {views_copy} "},"theme":{"name":""}}

Dear [Loan Officer’s Name],

I am writing to formally request a personal loan of $[amount] to [state purpose, e.g., consolidate my debt]. I have been a loyal customer of [Bank’s Name] for [number] years, and I am confident in my ability to repay this loan in a timely manner.

My current financial situation is stable, as I am employed at [Your Employer] with a monthly income of $[amount]. Attached are my recent pay stubs and a detailed budget outlining my expenses and repayment plan.

I appreciate your consideration and look forward to your positive response.

Sincerely, [Your Name]

Template 2: Business Loan Application

[Your Name] [Your Business Name] [Your Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date]

I am writing to request a business loan of $[amount] to [state purpose, e.g., expand my business operations]. My business, [Your Business Name], has been operating successfully for [number] years, and this loan will enable us to [specific plans, e.g., open a new branch, purchase new equipment].

Enclosed are our financial statements, business plan, and contracts from new clients, which demonstrate our growth potential and ability to repay the loan.

Thank you for your time and consideration.

Template 3: Home Renovation Loan Application

I am seeking a home renovation loan of $[amount] to improve my residence at [your address]. The planned renovations include [specific projects, e.g., kitchen remodeling, roof replacement], which will enhance the value and functionality of my home.

Attached are estimates from contractors, my recent bank statements, and a detailed plan of the renovations. I am committed to repaying the loan over [repayment period], as outlined in the attached budget.

I look forward to your favorable response.

Final Thoughts

Writing a compelling loan application letter requires attention to detail and a clear presentation of your financial situation and plans. By following this guide and using the provided templates, you can increase your chances of securing the loan you need. Remember, honesty and clarity are your best allies in this process.

• Home  
• Consumer Letters  
• Bank Loan Request

How to Write a Bank Loan Application Letter: Example and Writing Tips

Last updated on January 02, 2023 - © Free-Sample-Letter.com

What is Bank Loan Application?

A bank loan application is a request made to a financial institution , such as a bank, to borrow a specific amount of money. The purpose of the loan can vary, such as to fund a business venture, pay for education expenses, or make a large purchase.

In order to apply for a loan, an individual or business must complete an application that includes personal and financial information, as well as details about the purpose of the loan and the requested amount . The lender will use this information to evaluate the borrower's creditworthiness and determine whether to approve the loan and at what terms.

Step-by-Step Guide: Crafting a Successful Loan Request Letter

Here are some tips on how to write a bank loan application letter:

• Identify the purpose of the loan and the amount you’re requesting . Be specific and clearly state your financial needs. For example: "I am writing to request a loan of $10,000 to cover the costs of my daughter's tuition at XYZ University." or "I am writing to request a loan of $50,000 to fund the expansion of my small business, XYZ Company."
• Explain your current financial situation and provide evidence of your ability to repay the loan. This may include income statements, tax returns, and other financial documents. For example: "I have been self-employed as the owner of XYZ Company for the past 5 years and have consistently earned a net profit of $30,000 per year / I have been employed as a software engineer at ABC Company for the past 8 years and have a stable income of $75,000 per year. Attached, you will find my tax returns and financial statements as evidence of my ability to repay the loan."
• Describe the specific use of the loan proceeds and how they will benefit you or your business. Be sure to include a detailed plan for how you will use the funds and how you will generate the income to repay the loan. For example: "The loan funds will be used solely for my daughter's tuition and other education-related expenses. I have a budget in place and am confident that I can make the monthly loan payments while still being able to cover my other financial obligations." or "The loan funds will be used to purchase additional inventory and hire two additional employees, which will allow us to increase our sales and profitability. I have a solid business plan in place and am confident that these investments will enable us to repay the loan within 3 years."
• Include any supporting documents that may help your case , such as financial statements or a business plan. For example: "In addition to the documents mentioned above, I have also included a copy of my budget plan, which shows my projected income and expenses for the next 3 years." or "In addition to the documents mentioned above, I have also included a copy of my detailed business plan, which outlines my marketing strategy and projected financial performance."
• Request a specific repayment plan and timeline. Be realistic and considerate of the lender's needs when proposing a repayment schedule . For example: "I am requesting a loan repayment period of 3 years, with monthly payments of $1,500. I understand that this may be negotiable and am open to discussing alternative repayment terms that work for both parties."
• Express your appreciation for the lender's consideration and provide contact information for follow-up. Thank the lender for their time and make it easy for them to get in touch with you if they have any questions. For example: "Thank you for considering my loan request. I am confident that this investment will help my business grow and thrive / I am confident that this investment in my daughter's education will pay off in the long run. If you have any questions or would like to discuss further, please don't hesitate to contact me at 555-555-5555 or by email at [email protected]."

➤ You May Also be Interested in Our Sample Letter to Request an Alternative Payment Plan from a Creditor

Need to Write a Bank Loan Request Letter? Use Our Free Templates for Success

For applying loan in a bank or financial institution.

Dear (mr/miss etc. + Loan manager name),

Following my visit to the bank yesterday where all necessary papers were filed regarding my loan request, here are a few more details pertaining to the loan.

I have been a long-standing customer with (name of bank) for over (number) years now and I recently applied for a (personal/company) loan of ($/€ amount). This loan will allow me to pay for (reason needed) which I have been planning for some time now.

My preferred loan structure, after much thought, is a (secured/unsecured) loan. I believe this is the best option for me and I also hope to be able to pay it off within (X years).

I prefer to take out a shorter loan period rather than the popular long term packages, and therefore hope that you will be able to see this as a positive factor in granting me this loan.

I am currently employed at (company name) and have been the (name of position) for (No. of years). Should you require any references or further information, please do not hesitate to contact (my boss/the HR Dept. etc.) at any time. They can be reached on (tel. no.) or via email on: ([email protected]).

As requested by (Mr./Miss X), please find (enclosed/attached) copies of my most recent bank statements for the last (3/6) months.

I am available to come in and speak with you at any time, I do hope that you will look favorably on my request and I very much look forward to hearing from you.

(name/signature)

Bank Loan Request Letter for Small Business (SBA)

Dear [Loan Manager's Name],

I am writing to request a loan of $50,000 from the Small Business Administration (SBA) to fund the expansion of my small business, XYZ Company.

I have been self-employed as the owner of XYZ Company for the past 5 years and have consistently earned a net profit of $30,000 per year. Attached, you will find my tax returns and financial statements as evidence of my ability to repay the loan.

The loan funds will be used to purchase additional inventory and hire two additional employees, which will allow us to increase our sales and profitability. I have a solid business plan in place and am confident that these investments will enable us to repay the loan within 3 years. In addition to the documents mentioned above, I have also included a copy of my detailed business plan, which outlines my marketing strategy and projected financial performance.

I am requesting a loan repayment period of 3 years, with monthly payments of $1,500. I understand that this may be negotiable and am open to discussing alternative repayment terms that work for both parties.

Thank you for considering my loan request. I am confident that this investment will help my business grow and thrive. If you have any questions or would like to discuss further, please don't hesitate to contact me at 555-555-5555 or by email at [email protected].

[Your Name]

You may also find these examples useful:

• Expert Advice: How to Write a Successful Administrative Letter
• Sample Bad Check Notice Letter: How to Request Payment for a Bounced Check
• Get Your Security Deposit Back: Use This Sample Letter for Claiming It
• Winning Grants: A Step-by-Step Guide to Crafting a Successful Request Letter
• Write a Winning Refund Request Letter with These Tips
• How to Write an IOU Letter (Writing Tips and Samples)
• How to Write a Successful Sponsorship Proposal Letter
• Email Template to Advise Customer of a Returned Check

We also recommend:

• IOU Template and Promissory Note - Sample & Free Download
• Payment Plan Request Letter - Sample & Free Download
• Bank Customer Service Representative Sample Cover Letter
• Banking Internship Sample Cover Letter
• Bank Teller Sample Cover Letter - Tips & Free Download
• Annual Leave Request Letter - Sample & Free Download
• Funeral Leave Request Letter - Sample & Free Download
• Refund Request Letter - Sample & Free Download
• Claiming Back a Security Deposit Letter (Tips & Samples)

How to Write a Small Business Loan Request Letter That’ll Impress a Lender

Your guide to business loan request letters, what is a small business loan request letter.

A small business loan request letter is a letter to a bank that supports your business loan application. It should include the amount of money you want to borrow and explain why you merit the loan, how you expect to use the loan, and how you plan to pay the bank back.

If you’ve applied for a  small business loan  at a bank, you’re probably familiar with the need for a business loan request letter. You can think of this letter, which accompanies your loan application, as part resume, part cover letter. It contains important information about your business’s history and financial status, and gives you an opportunity to convince the bank to loan you money.

It might seem impossible to condense your business down to one page for a total stranger who’s never met you. We understand the feeling, but knowing how to write a business loan request letter in an effective way can help you meet the challenge. Remember—this letter might be one of your only opportunities to personally convey to your lender why they should approve your application.

We’ll make the steps for writing a business loan request letter as simple as possible. Here’s what lenders want to see, what this letter is for, what to include, and the format to follow for best results.

When You Need a Small Business Loan Request Letter

There are many financing options for small businesses, and depending on which one you pursue, you’ll spend more or less time and effort on your business loan application . In most cases, a business loan request letter is required for only two types of loans— conventional bank term loans and SBA loans .

Each of these lenders need similar information, and we’ll get to that in a bit. But first, let’s look at a few small differences between these two business loan request letter types.

Business Loan Request Letter for a Traditional Bank Term Loan

It shouldn’t come as a surprise that banks are more likely to lend money to businesses that appear to be growing and could possibly turn into long-term customers. Unfortunately, the good majority of small business owners find that traditional bank loan requirements are so strict that qualifying is difficult. But if your personal credit score is excellent, this might be an option you want to explore.

Before committing to such a long-term borrowing relationship, however, your bank lender will want to learn everything they can about you and your business in order to make sure you are a safe credit risk.

That’s why during the small business loan underwriting process , the bank’s underwriter will look to your business loan request letter as a direct appeal in your own words for the funding your business needs. This is your opportunity to tell the lender why you need the loan and show evidence that you’ll be able to repay the loan.

Business Loan Request Letter for an SBA Loan

The SBA loan application process is complicated as is. SBA loans are backed by the federal government, so in addition to your lender’s requirements, you also have to comply with any SBA rules. Most lenders will ask you to submit a loan request letter before committing to providing your business an SBA loan.

When you write a loan request letter for an SBA loan , be prepared to share financial details about yourself and any business partners, in addition to specific information about your business’s finances and credit history.

SBA-backed lenders will need to know how much of your own money you have invested in the business. Your business loan request letter should also clearly indicate your company’s industry. This is because the SBA doesn’t fund businesses that lend money or speculate, nor do they fund passive investments, pyramid sales, or gambling of any sort.

With respect to describing your partners and management team, be sure to elaborate on the “good character” of these individuals within your business loan request letter. Also, you should indicate whether or not you and your leadership team have previous management or industry experience that directly applies to your current business.

What to Include in Your Small Business Loan Request Letter

The business loan request letter is a tool banks use to pre-judge you and your creditworthiness, often before they ever have a conversation with you directly. That’s why it’s important to pay attention to what you say in the letter and how you say it.

Your letter should be short— ideally just one page —but full of pertinent information about your business.

Let’s walk through the building blocks of a successful small business loan request letter:

1. Header and Greeting

Every small business loan request letter will need to start with a header and a greeting. The header will consist of a few lines of necessary information on the basics of your business loan request. Be sure to include the following information in your header:

• Your own name
• Business name
• Business phone number
• Business address
• Loan agent’s or lender’s name and title
• Loan agent’s or lender’s contact information
• A subject line with your requested loan amount

Below this header, be sure to include a greeting that will get your business loan request letter off to a cordial start.

2. Business Loan Request Summary

The body of your small business loan request letter should start with a brief summary. Provide a quick description of your loan request with basic business information, your ideal loan amount, why you need the loan, and what would make you an ideal borrower. That said, keep this section concise—only provide the most important information here so that your loan agent can get to the body of your business loan request letter.

3. Basic Business Information

The first sentence of your letter should express your request for the loan and the amount you want to borrow.

Next, use a few short and concise sentences to provide a basic overview of your business. In this section, be sure to include:

• Business’s legal name and any DBA that your business uses
• Business entity structure (S-corporation, partnership, LLC, etc.)
• Brief description of what your business does
• How long you’ve been in operation
• Current number of employees
• Current annual revenue (and profits, if you’re profitable)

Once these business basics are covered, you’ll be ready to move on to the meat of your business loan request letter—describing the purpose of the business loan you’re requesting and how you plan to recuperate the investment.

4. Purpose of the Business Loan

With the business basics covered, you’re ready to explain clearly and succinctly exactly how you plan to use your business loan funds. And, of course, explain why this use of funds will be a wise business investment.

Be as specific as possible, showing the lender that you’ve carefully considered what taking on this new debt will accomplish. For example, don’t just say that you plan to use the loan for working capital. Say that you plan to increase inventory by 150% or hire three new hires who will increase revenues by $1 million.

Remember, your lender’s number one priority when considering any loan application is to determine the likelihood that you will repay the loan on time and in full. A lender’s goal is always to minimize their risk! As such, be sure to mention exactly how the loan will help generate the necessary additional income to cover repayment plus interest.

5. Evidence That You’ll Be Able to Repay the Loan

Once you describe how you plan to use the loan funds requested, you’ll get to the part in your business loan request letter where you need to demonstrate that you can pay back the loan. Of course, the rest of your loan application will contain detailed information about your business financials and help to prove that. But here, you want to highlight any specific business financials to support your claim that funding your loan will be a low-risk decision for your lender.

Use figures from your most recent balance sheet or income statement as evidence to indicate the current financial health of your business. If you have other business debts, make sure to mention that and include a business debt schedule . If you’re profitable, make sure to highlight that because it’s something that many lenders look for in successful applicants.

From there, consider highlighting specific cash flow projections to show the lender how you plan to fit repayment of the requested principal and interest into your budget.

Small Business Loan Request Letter Sample

Now that you know exactly how to write a business loan request letter, you’re ready to input information about your own business format that will match your lender’s expectations.

To simplify this process, think about following this free business loan request letter sample as a guide. Of course, you’ll need to edit and adapt this template to match the specifics of your business and the loan you intend to pursue. The format of a business loan request letter will typically be on printed 8.5 x 11 inch paper. The exception is if your SBA lender supports online applications, in which case you can submit your letter online.

Applicant’s Name Applicant’s Address City, State, Zip Code [DATE] Lender’s Name Title Lender’s Institution Lender’s Institution Address City, State, Zip Code Re: Small business loan request for [AMOUNT] Dear [LENDER’S NAME], The aim of this letter is to request a small business loan in the amount of [NUMBER] for the purpose of [ADD PURPOSE OF LOAN HERE]. My business, [BUSINESS NAME], is a successful and well-established company, which is part of the [TYPE] industry. [BUSINESS NAME] began operation in [DATE] with [NUMBER] employees, and has shown consistent growth over the past [NUMBER] years. The business now employs [NUMBER] individuals. Our business is structured as a [BUSINESS ENTITY TYPE]. We have an established online presence, as you can see on our website [LIST WEBSITE], Facebook, Yelp, [LIST URL OF ANY OTHER SOCIAL MEDIA]. Through these methods, as well as [LIST ANY OTHER MARKETING AVENUES], we continue to make industry contacts and cultivate new business. Last year, our annual sales revenue was [NUMBER] with a net profit of [NUMBER, IF PROFITABLE]. We have maintained a consistent cash flow over the past [NUMBER] years, and have operated with an annual net profit each year since opening. [EXPLAIN SPECIFIC REASON FOR LOAN REQUEST HERE] EXAMPLE: We have completed preliminary market research in [LOCATION OR TYPE OF EXPANSION], and we have seen increased demand for [PRODUCT OR SERVICE YOUR BUSINESS PROVIDES]. Therefore, we are seeking funding to grow the business by [SUMMARIZE BUSINESS GROWTH PLAN]. This business growth opportunity is immediate but will require more funding up front than our cash flow can currently accommodate. Although making the monthly repayments with interest over time will fit easily into our budget, we do not currently have access to a lump sum large enough to make the initial purchase. This loan in the amount of [NUMBER] will enable us to purchase [WHAT YOU NEED] immediately so that we can begin to generate business for loan repayment immediately as well. Attached, please find our business plan, our most recent cash flow statement, and our annual profit and loss statement for your review. Based on these strong financial documents and our equally strong credit score of [NUMBER], we feel that [YOUR BUSINESS NAME] will be a safe credit risk for your bank. Please take a moment to review this request letter and the accompanying financial documents. If you feel that you can help our company, we would love to hear from you. Sincerely, Applicant’s Signature Applicant’s Name Printed List of Enclosures: Business plan, cash flow statement, and P&L statement (plus, any other documents that are part of the loan application)

Business Funding That Doesn’t Require a Request Letter

Now that you know about how to write a business loan request letter, you might find yourself wishing for a less-complex avenue for obtaining small business funding. Fortunately, there are a number of speedier business loan products that might work for you. The options listed below don’t require a request letter—just a quick online business loan application .

Term Loans From Alternative Lenders

Term loans are a traditional loan product that most people are familiar with. What some business owners don’t know is that they’re available at places other than your local bank. Many alternative lenders in the online funding marketplace offer term loans with excellent repayment terms for small businesses.

Online lenders are often way easier to qualify for than bank loans. To apply, you usually only need to show some recent business bank statements, along with business and personal tax returns. And when working with an online alternative lender, the application and approval process for most term loans can be completed in two to five business days.

After approval from a lender, you’ll receive a lump sum of cash up front. Your lender will give you terms for a predetermined repayment scheduled for your loan amount, or principal, along with interest and fees at regular intervals.

With alternative lenders, most term loans have a repayment period of one to five years. Term loans from alternative lenders usually come with either fixed interest rates that are determined by several factors—size of the loan, credit history, repayment term, or purpose of the loan, just to name a few.

Small businesses and younger companies find term loans advantageous because they come with predictable payment amounts so they can be easily worked into the business’s ongoing cash flow.

Equipment Financing

Equipment financing is the perfect option if you need to buy or lease equipment. Lenders can be comfortable with more risk with this type of loan. That’s because the collateral is built right into the loan. If you default, the lender can repossess the equipment.

The lender or vendor fronts you the cash to make the purchase, and you make regular payments for a specified period of time. The term is usually determined based on the expected life of the equipment. Depending on the structure of your equipment loan or lease, you’ll either own the equipment outright at the end of the term or have the option to renew your lease or upgrade the equipment.

These loans can also happen pretty quickly—in as few as a couple of days if you have everything in order! You typically just need to show an invoice or purchase order for the equipment and some business bank statements.

Business Lines of Credit

If you find that a business term loan requires too much paperwork, try for a business line of credit instead. A business line of credit works similarly to a credit card. Instead of giving you an entire lump sum of cash at once, a business line of credit gives you access up to a certain amount of money. You can draw on that credit line as often as needed, and you only pay interest on money that you use. Lines of credit are useful for recurring expenses, like payroll, and unexpected costs.

Fortunately, applying for a business line of credit can be a bit easier than applying for a term loan. A variety of lenders, both banks and alternative lenders, offer lines of credit to small businesses.

Banks usually request personal and business tax returns, bank account statements, and business financial statements, such as profit-and-loss statement and balance sheet. If the line of credit is for a relatively small amount of money, they might not need to see a formal funding request letter. Alternative lenders usually just need to see business bank statements to qualify an applicant for a business line of credit.

Invoice Financing

A business loan request letter won’t be necessary if you’re applying for invoice financing , either. Much like equipment financing, invoice financing offers secured business funding without requiring outside collateral. That’s because invoice financing offers business owners advances for their outstanding invoices, and the invoice itself will secure the advance that the business owner accesses.

Even more, invoice financing is one of the quickest-to-fund options that business owners can access. If you don’t have the time to write out a formal business loan request letter—and then wait months and months for a bank to underwrite your business loan application—then invoice financing will be your quickest contingency plan.

What to Know About How to Write a Business Loan Request Letter

The most important takeaways with a business loan request letter are to be precise and concise. Your letter is important because it makes a first impression on the lender who will be funding your loan.

Make sure you include the following in your business loan request letter:

• Business structure (S-corporation, partnership, LLC, etc.)
• Info on any partners, if applicable
• Current annual revenue
• The purpose of your loan
• Any vendors you’ll be purchasing from if applicable
• Evidence you’ll be able to repay the loan and principal, supported by historical financial figures and projections

There are plenty of traditional term loans and other small business loan options that don’t require a business loan request letter, too—so don’t be discouraged if this sounds like a bit more than you have the time for right now. It’s a good idea to explore your business loan options based on how quickly you need the money and how you’re planning to use the funds.

Sally Lauckner

Sally Lauckner is the editor-in-chief of the Fundera Ledger and the editorial director at Fundera.

Sally has over a decade of experience in print and online journalism. Previously she was the senior editor at SmartAsset—a Y Combinator-backed fintech startup that provides personal finance advice. There she edited articles and data reports on topics including taxes, mortgages, banking, credit cards, investing, insurance, and retirement planning. She has also held various editorial roles at AOL.com, Huffington Post, and Glamour magazine. Her work has also appeared in Marie Claire, Teen Vogue, and Cosmopolitan magazines. 

Loan Application Letter Sample

Writing a loan application letter is the best way of obtaining a loan from your office or a bank. Depending on what type of loan you want, you need to provide specifics in your loan application letter. If you are looking for a mortgage or car loan, you will have to follow the instructions that mortgage companies or banks provide to you. If it is a personal loan that you are looking for, you might have a little more room to word your loan application letter.

Your loan application letter should be simply written there is no need to mince your words as you are asking for a service and not a favor! Write down the reason why you need a loan and how you intend to pay it back. If you know of a payback method that the company / institute offers, mention it so that the loan officer knows that you have done your homework. Remember that the more informed you are about a loan policy, the easier it will be for you to decide on the best loan option for yourself.

Once you have decided on the loan plan that you intend to apply for, you can begin writing your loan application letter. You may or may not enclose a loan application form if you are applying for a loan and are using the loan application as a cover, you will of course need to enclose the loan application form; if you are just inquiring about a possible loan, only a letter will suffice. Here is a sample:

January 12, 2015

Mr. Jeremy Clarkson Loan Officer Bradenton State Bank 45 61st Avenue Bradenton, FL 16353

Dear Mr. Clarkson:

I appreciate the time you took out to explain the procedures of applying for a personal loan from Bradenton State Bank. I have studied the loan plans that you provided to me and believe that Plan B suits me the best as it is based on monthly payments which I believe will be easy for me to manage as I am paid on the 2nd day of each month.

As I mentioned during our meeting, I need a personal loan amounting to $4000 to renovate my house (66 21st Avenue, Bradenton, FL). Since my house is literally falling apart around me, I need to get work done on it on an immediate basis. The loan application form that you handed me has been filled and enclosed with this letter. I am also attaching proof of my employment and my bank statement for the previous six months as you requested.

I would appreciate it if you could get this expedited. If there are any other documents that I need to provide, please let me know. I can be contacted at (444) 444-4444 if you need any further information from me.

Thank you very much for your time and consideration.

[Sign Here]

Trisha Benneton 000.111.2222 trisha @ email . com

Related posts:

• Personal Loan Application Letter Sample to Boss
• Sample Loan Application Letter to Bank
• Sample Loan Application Letter to Boss
• Sample Loan Application Letter to Employer

How to Write a Loan Application Letter

Table of Contents

Sometimes, taking out a loan can become inevitable. Whether dealing with piled-up medical bills or a financial emergency, it’s common to turn to fast and convenient borrowing options. According to statistics, advances and loans accounted for more than 60% of bank assets in the European Union in 2021. 

If you wish to take out a loan, you’ll have to fill out a loan application or request letter that details what you need the money for and how you’ll use it. The best way to appeal to a lender is by using a convincing tone and showcasing a clear plan for the money. Keep reading as we look at ways you can achieve this and ensure that your loan is granted successfully. 

What is a Loan Application Letter?

A loan application letter is a typed or handwritten letter provided to your lender, helping them decide whether to approve your loan request. This letter is written when the borrower is seeking financial assistance from a lender to pay off some bills or other expenses. 

When Do You Need One?

You might require a loan application letter in the following financing situations:

• When you wish to borrow money from the SBA (Small Business Administration) since it recommends and encourages applicants to start their loan proposals with an executive summary or a loan application letter
• When a borrower opts for a loan from a conventional bank lender and has to demonstrate that their business is financially viable and experiencing growth

In some situations, you aren’t required to write a loan application letter. These include scenarios like when a borrower is seeking equipment financing and said equipment serves as collateral, when someone requests a business line of credit with business bank statements or financial statements, and when a borrower seeks a term loan online using alternative lenders who want to go over your recent bank statements. 

Essential Loan Application Elements

There are specific guidelines you need to follow when writing a loan application:

1. Header and Greeting

Whether you’re filling out a loan application letter for a personal or business loan, it’s crucial that you start with a header and greeting. Include several sentences that outline the necessary, accurate details of your loan request in the header. If you’re opting for a business loan, then you need to include the following details:

• Company name
• Company phone number
• Company address
• Loan agent or lender’s name and title
• Loan agent or lender’s contact details
• A subject line stating the desired loan amount

Follow this by incorporating a greeting right below the header so that you introduce your application with a friendly tone. 

2. Loan Request Summary

You will have to provide your lender or loan agent with an overview of your loan request in this section. Ensure this section is concise, detailing only crucial information that’ll enable the lender to reach the letter’s body quickly. Entrepreneurs applying for a business loan should state why they are trustworthy borrowers, basic business details, the ideal loan amount, and the use of the loan. 

3. Basic Business Details

It would be best if you started by making a clear loan request which includes the amount you wish to borrow. When you write a few sentences about the workings of your business, they should include the following information:

• The legal business name 
• Any DBA used by the organization
• The amount of time the business has been operating
• The business structure
• Number of employees
• An overview of what the company does
• Profits and annual revenue, if applicable

Once this is done, you can move on to the next step, which is explaining why you need a loan. Don’t also forget to outline how you plan to repay the owed amount if the lender grants the loan.

4. Loan Usage

Every lender’s goal is to minimize risk as much as possible, so don’t be surprised if they carefully scrutinize your application before deciding whether to accept or disapprove it. They will assess whether you can pay back the loan entirely on time. Make a solid outline of how you intend to use the loan and why granting you the funds is a wise investment. It’s essential to inform the lender that you have clear goals you will accomplish if the loan application is approved. 

5. Proof of How You’ll Pay Back the Loan

In order to show your company’s financial health, you’ll need to use figures from the latest balance sheet or income statement. These records are essential because they demonstrate that you can repay the loan. 

Additionally, you must include any additional business finances to prove you’re a low-risk investment. State down any existing debt and a schedule detailing how you’ll pay it back if you owe someone else money. Perhaps, you’re a new business, but profits are stable. In that case, ensure you mention this, as it proves your ability to repay the loan. 

Once you achieve this, you can add a particular cash flow prediction to give the lender an idea of your payback plan, including the principal and interest amount. 

6. Give Accurate Information

There’s no doubt that lending money is a risky investment. You can make your lender’s life easier by providing factual and correct details to ensure both parties agree with the terms of the deal. For example, include your accurate credit history. If you are dishonest during the loan application process, you will be considered a fraud, and there will be repercussions for your actions. 

Tips for Writing a Loan Application Letter

• Before sending a loan letter request, check your business and personal credit scores and whether you need to take specific steps to improve them
• Provide transparent, genuine, and concise explanations
• Ensure all information is factual and relevant
• Keep all your financial statements ready, such as business balance sheets, cash flow statements, PSL statements, etc
• Submit every relevant credential with your loan application request letter
• Include the date, time, method, and manner you’ll use to make your payment
• Avoid writing a letter that is unnecessarily wordy and long
• Follow the rules available online on writing formal letters, so you don’t use an informal tone while assembling your loan application letter
• Whether including your business’s current assets, liabilities, or financial health, don’t jot down false information that can get you into legal trouble.

Loan Terms and Penalties

If you fail to pay your loan on time, cancellation fees or penalties may apply that depend on the number of days you’re overdue on the payment. For example, if you’ve looked into how to get a title loan with a lien , you know that your car will be used as collateral. In case you default on payment or provide false information, you are likely to lose ownership of the vehicle.

You should go through the loan terms and conditions as this will enable you to determine how many days your payments can be delayed, how much penalties are for late payments, and the amount you’ll be charged if you cancel your loan. Choosing a loan provider that offers the lowest and most amenable terms is recommended. 

Whatever reason you have for acquiring a loan, writing a solid loan application letter will improve your chances of obtaining the financial help you need. This application letter should be composed in a polite, convincing tone and include accurate information. You can do thorough research to pick a lender whose provided options align with your requirements. Consider beforehand how much money you need and apply for the relevant loan. 

Join the thousands who have sharpened their business writing skills with our award winning courses.

Copyright © 2024 Businesswritingblog.com.

Home > Finance > Loans

How to Properly Write a Business Loan Request

We are committed to sharing unbiased reviews. Some of the links on our site are from our partners who compensate us. Read our editorial guidelines and advertising disclosure .

Have to submit a business loan request letter as part of your loan application? Not sure how to get started?

We don’t blame you. These kinds of letters aren’t as common as they used to be. While online lenders don’t usually ask for small-business loan requests, some traditional banks and credit unions still do. And if you apply for an SBA business loan (a loan backed by the US Small Business Administration), you’ll need a small-business loan request as part of your loan application package.

No matter which lender you’re applying with, this guide will help you write a strong business loan request letter―and to get the business loan you need.

How to write a business loan request letter

• Start with the easy stuff
• Write a brief summary
• Add information about your business
• Explain your financing needs
• Discuss your repayment plan
• Close the letter

1. Start with the easy stuff

Writing a loan request can feel overwhelming. After all, it’s not an everyday part of being a small-business owner. What do you say when applying for a bank loan? How do you write a business proposal for your loan application? What’s your lender even looking for in a business loan request letter?

That’s why we suggest starting your request writing process with the easy bits: formatting.

You’ll want to begin your business loan request with some pretty standardized formatting that includes your contact information, the date, your lender’s contact information, a subject line, and a greeting.

Typically, you’ll want to format the beginning of your small-business loan request roughly like this:

First and last name

Business’s name

Business’s phone number

Business’s address (this one is optional)

Lender name (or loan agent’s name and title, if you have one)

Contact information for your lender or loan agent

Subject line

Obviously you can simply plug in the relevant information for most of this. Easy peasy, right?

You’ll really only have to come up with your own subject line and greeting. But don’t overthink it. Something like this will work just fine for your subject line:

• Re: [Your business’s name] business loan request for [loan amount]

Likewise, keep your greeting simple. “Dear [lender]” or “Dear [loan agent]” will do quite nicely.

Got all that? Then you’re ready to get into the actual loan request.

By signing up I agree to the Terms of Use.

2. Write a brief summary

Before you dive into the meat of your loan request, you should give a brief summary of your letter. Just write a short paragraph that says why you’re writing and what you want.

So you’ll probably want to include the following details:

• Business name
• Business industry
• Desired loan amount
• What you’ll use the loan for

No need to get fancy with this. You’re trying to condense the most important information into one or two sentences.

For example, your summary might look something like this:

• I’m writing to request a [loan amount] loan for my small business in the [industry name] industry, [business name]. With this loan, [business name] would [describe your intended business loan use].

As you can see, you don’t need much detail here. You’re just giving the reader a quick overview of what’s to come.

And now that you’ve given them that preview, it’s time to get more in depth.

Remember, your lender isn’t here to grade your writing. Try to use good spelling, grammar, and punctuation―but don’t stress about crafting beautiful sentences.

3. Add information about your business

Your next section should add more detail about your business. You’ll want to include information like this:

• Business’s legal name (if different than name used)
• Business’s legal structure (LLC, partnership, S corp, sole proprietorship, etc.)
• Business’s purpose
• Business’s age (or date it began operating)
• Annual revenue
• Annual profit (if applicable)
• Number of employees

Now, keep in mind that you’re not trying to give your reader an encyclopedic history of your business. Instead, you’re trying to show that you have a well-established business―one that’s solid enough to deserve a business loan. So focus on relevant details that show your business’s maturity.

You can keep this section as short as a few sentences or as long as a few (brief) paragraphs. Just make sure you leave plenty of room for the next two sections.

4. Explain your financing needs

After discussing your business, it’s time to explain why you need a bank loan.

That means you’ll want to offer some details about how you plan to use your business financing. For example, you can talk about the employees you plan to hire, the building you want to expand, or whatever else you intend to do with your term loan .

Take note, though, that you also need to explain why your loan request makes sense. Because your lender doesn’t really care that you want a loan―it cares whether or not it makes sense to lend to you. You need to convince your lender that you have a good plan for your loan―one that will make it easy to repay the money you borrow.

Try to answer questions like these as you write this section:

• Why should your lender want to approve your loan application?
• What happens to your business if you get your small-business loan?
• What kind of growth will your business loan allow for?

Dig into your business plan and projections to find some good stats. Explain how hiring those additional employees will increase your revenue by a certain percentage or dollar amount. Break down how opening that add-on to your restaurant will allow you to seat a number of additional customers, and how much revenue you expect that to bring in.

The more specific you can get, the better. Because again, you’re trying to convince your lender that you’re borrowing as part of a thoughtful business plan ―not just because you want some cash.

And take your time with this part. In most cases, this section and the next one will form the meat of your business loan request letter. 

As a rule, you should keep your business loan request letter to one page.

5. Discuss your repayment plan

By this point, your lender should understand what your business does and why a loan would help it grow. Now you need to prove to your lender that you can repay your small-business loan.

This doesn’t mean you have to show precise calculations breaking down your desired interest rate and monthly payment. (After all, your bank probably hasn’t even committed to a specific interest rate yet.)

Instead, talk about things like your business’s past finances, other existing debts, and any projections can you offer.

So if you have a profitable business, point that out, and discuss how that will free up cash flow to repay your loan. Offer summaries of profit-and-loss statements that show your business has been growing. Tell your lender how you’ll pay off that existing loan within a few months, so they don’t need to worry about it interfering with repayment of your new term loan.

Put simply, this is your chance to convince your lender of your creditworthiness. Especially if you have a slightly low credit score or some other concern, you want to use this section to show that you will absolutely repay your loan.

6. Close the letter

Finally, you can add a few finishing touches.

Usually you should close with a short paragraph or two that refers the reader to any attached documents (like financial statements) and asks them to review your loan application.

You may also want to include a sentence expressing willingness to answer any questions―or just saying you’re looking forward to hearing back.

Then end things with your signature, list any enclosed documents, and you’re done!

Well, sort of.

At this point, we strongly recommend you print off your business loan request letter and read it―out loud, if possible. This will help you catch any errors. Because no, your lender isn’t a writing teacher, but you still want to make a good impression.

Plus, if you make typos on something like your business name or desired loan amount, that inaccuracy could lead to confusion from your lender―slowing down your loan approval process.

Once you’ve proofread your loan request letter, you’re ready to submit it to your lender. With any luck, your thoughtful letter will help convince your lender to give you that loan you want.

Loan proposal letter template

So how do all those steps look when you put them together? Something like this:

            First and last name

            Business’s name

            Business’s phone number

            Business’s address (this one is optional)

            Date

            Lender name (or loan agent’s name and title, if you have one)

            Contact information for your lender or loan agent

            Subject line

            Greeting

This first paragraph should summarize the rest of your letter. Keep it to just a couple sentences.

The next one to three paragraphs add more detail about your business. Include facts about its age, revenue, profit, employees, and other relevant information.

Then explain why you need financing and how you’ll use it to grow your business. This section can be a little longer (but remember your whole letter  should fit on one page).

Next, talk about how your business will repay your loan. You may want to mention how financial documents show your business’s financial health, for example.

Finally, close with a short paragraph or two that list any enclosed documents and invite the lender to consider your loan application.

Printed name

List of enclosed financial documents

That’s not so hard, is it? With this basic business loan request letter template, you can easily write your own personalized business loan proposal.

The takeaway

So there you have it―that’s how to properly write a business loan request.

Get your formatting right, include a short summary, talk about your business, explain your loan needs, prove you can repay your loan, and close things off. (And don’t forget to proofread.)

We believe in you. You can write this thing.

And good luck getting your loan application approved!

Don’t just tell your lender you can repay your business loan―make sure you can with our business loan calculator .

Related reading

Best Small Business Loans

• How to Get a Small Business Loan in 7 Simple Steps
• 6 Most Important Business Loan Requirements
• How Long Does It Take To Get a Business Loan?
• Commercial Loan Calculator

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

5202 W Douglas Corrigan Way Salt Lake City, UT 84116

Accounting & Payroll

Point of Sale

Payment Processing

Inventory Management

Human Resources

Other Services

Best Inventory Management Software

Best Small Business Accounting Software

Best Payroll Software

Best Mobile Credit Card Readers

Best POS Systems

Best Tax Software

Stay updated on the latest products and services anytime anywhere.

By signing up, you agree to our Terms of Use  and  Privacy Policy .

Disclaimer: The information featured in this article is based on our best estimates of pricing, package details, contract stipulations, and service available at the time of writing. All information is subject to change. Pricing will vary based on various factors, including, but not limited to, the customer’s location, package chosen, added features and equipment, the purchaser’s credit score, etc. For the most accurate information, please ask your customer service representative. Clarify all fees and contract details before signing a contract or finalizing your purchase.

Our mission is to help consumers make informed purchase decisions. While we strive to keep our reviews as unbiased as possible, we do receive affiliate compensation through some of our links. This can affect which services appear on our site and where we rank them. Our affiliate compensation allows us to maintain an ad-free website and provide a free service to our readers. For more information, please see our  Privacy Policy Page . |

© Business.org 2024 All Rights Reserved.

Similar Letters

Sample letter of intent of job application, letter to ask about an international exchange program, letter of application for a teaching position. sample letter, application letter for school admission. sample letter, application sample letter for an administrative assistant, job application letter of interest. sample letter, application letter for a job vacancy. sample letter, application letter for high school. sample letter, work visa application for research abroad sample letter, follow up letter after application. sample letter, letter example inquiring about a program for foreign nurses, letter of application for a nanny job in a foreign country, sample letter to apply to an excavation department abroad, letter of applying for a position. sample letter, letter of application for graduate school. sample letter, thank you letter for an application sent. sample letter, motivational letter sample for job application, application letter for teaching. sample letter, letter of application for employment. sample letter, application letter for an internship. sample letter, letter categories, loan application letter. sample letter.

• Express your desire to apply for a loan.
• List down the reason or reasons why you would like to get a loan.
• Ask for the requirements for the loan to be granted.

SAMPLE LETTER

[Letter Date]

[Subject: Normally bold, summarizes the intention of the letter] -Optional-

Dear [Recipients Name],

I am applying for a loan since I want to be able to acquire a car for myself and my family. I ask that you kindly send me the list of any and all requirements which I have to send to you so that I can be able to proceed with my application as soon as possible.

Sincerely, [Senders Name] [Senders Title] -Optional-

[Enclosures: number] - Optional - cc: [Name of copy recipient] - Optional -

Loan application letter. Sample letter.

Further things to consider when writing application letters to banks

Application Letters

Application letters are letters that you write to formally request for something from authority, apply for a job, or join an institution. Effective application letters will give a detailed explanation for your interest in the specific item, company, or institution. They showcase your abilities and strengths and illustrate your experience. In most cases, people write application letters to express their interest in receiving a position, attending an institution, or when applying for a visa, for instance. In all scenarios, application letters must be accompanied by the relevant documents. Application letters are the perfect tool to demonstrate something of your personality. Therefore, you should write in a professional tone setting a clear outline that allows the reader to scan the primary data quickly. Introduce yourself and briefly explain your intent and reason for the application. Address the letter with a title or name of the recipient. If your application is for a job or to join an institution, for example, you need to highlight your experience and qualification; if you are applying for a travel visa, make sure to state a clear intention for your travel. End with a positive tone and invite the recipient to contact you.

Letters to Banks

Letters to banks are letters sent specifically to the banks by their customers. The letters can be addressed to bank managers or any other relevant bank official, based on the situation at hand. There are various reasons why you may want to write a letter to the bank. The most common ones include to request for a new ATM card, to ask for funds transfer from one account to another, or to open or close an account. You can also write to inform the bank about a phone number or postal address change. In all these situations, letters to the bank must remain formal and professional. Before writing letters to banks, you need to make sure that you have all the information the bank may need regarding your account. Use the standard business greetings. If you know the recipient's name, write to him/her by name. Mention the purpose of the letter. Provide all the necessary information such as account number, name, postal and email address, contact number, etc. as registered with the bank. Be specific and avoid writing the same thing twice. Keep the letter simple and concise. Wrap the letter up by calling the recipient to appropriate action.

These articles may interest you

• Application
• example of a loan application letter
• loan application
• application letters

All Formats

13+ Loan Application Letter Templates

Thinking of asking for a loan? Opening up a business and need the extra money to kick your idea into existence? Loan applications form are a standard piece of document that is significant when asking for a sample loan , and in this website, we provide you with ample of application letter templates for loan to choose from and use.

Business Loan Application Letter Template

Car Loan Application Letter Template

Personal Loan Application Letter Template

Loan Forgiveness Application Letter Template

Calamity Loan Application Letter Template

Sample Loan Application Letter Template

Loan Application Letter Templates

What Is a Loan?

How to fill out a loan application, employee loan application letter template.

Medical Loan Application Letter Template

Basic Loan Application Letter Template

Bank Loan Application Letter Template

Tips before Filling for a Loan

• Why do I need the loan for?
• How will it help my business?
• How will I spend it?
• Who will manage the loan?
• Start by filling up the basics, such as the type of business, the name, contact numbers, and the legal structures.
• Typically after the application, there will an agreement concerning fees associated with the loan. These should be discussed personally with the lender.
• Be sure to double-check that every question is filled. If anything is amiss, the application might end up with the underwriter and may be delayed.
• Be sure to bring plenty of back up documents when meeting personally the lender. These documents include a resume, a credit report templates, past tax returns, the business plan templates, and balance sheets .
• Do not be afraid to include too much information so that there would be an assurance of confidence from you lender that it is strictly business and is legitimate.

More in Letters

Reference Letter for Loan Application Template

Mortgage loan application letter template, letter of intent for loan application template, house building loan application letter template, gold loan application letter template, group loan application letter template, emergency loan application letter template, foreclosure loan application letter template, follow up loan application letter template, funeral loan application letter template.

• FREE 26+ Covid-19 Letter Templates in PDF | MS Word | Google Docs
• Thank You Letter for Appreciation – 19+ Free Word, Excel, PDF Format Download!
• 69+ Resignation Letter Templates – Word, PDF, IPages
• 12+ Letter of Introduction Templates – PDF, DOC
• 14+ Nurse Resignation Letter Templates – Word, PDF
• 16+ Sample Adoption Reference Letter Templates
• 10+ Sample Work Reference Letters
• 28+ Invitation Letter Templates
• 19+ Rental Termination Letter Templates – Free Sample, Example Format Download!
• 23+ Retirement Letter Templates – Word, PDF
• 12+ Thank You Letters for Your Service – PDF, DOC
• 12+ Job Appointment Letter Templates – Google DOC, PDF, Apple Pages
• 21+ Professional Resignation Letter Templates – PDF, DOC
• 14+ Training Acknowledgement Letter Templates
• 49+ Job Application Form Templates

File Formats

Word templates, google docs templates, excel templates, powerpoint templates, google sheets templates, google slides templates, pdf templates, publisher templates, psd templates, indesign templates, illustrator templates, pages templates, keynote templates, numbers templates, outlook templates.