If you are planning on availing a business loan to set up or grow your business, you might come across the requirement for a business loan request letter. The letter can make or break your loan application. It enables the lender to understand your expertise, business and the loan requirements. A poor business loan request letter can lead to the rejection of the application. Here are a few tips on writing a compelling business loan request letter:
1. Mention the basic business information
The opening line of the letter is one of the most important parts. It should talk about the loan amount required and the reason for applying for a loan. You will need to incorporate the business name, legal status, information on the business, years of operation, the number of employees, annual turnover, and other details as part of the letter.
2. Add details on the purpose of the loan
Here is where you let your emotions pour in. You should talk about why you need the loan, what you will do with the money, and how you will work on systematic growth for your enterprise. A few lines on the groundwork and research incorporated as part of your planning process could strengthen your application. You should remember that lenders want to know where the money is being spent and if the business is set for success and profitability.
3. Assure the lender on repayment
The lender will always work towards minimizing the risks that come with the offerings. You should talk about how you will work towards generating income for loan repayment. A solid repayment plan and strong financials can help assure the lender that the loan will be repaid on time. Some additional details to make a better case for your request include information on the cash flow, projections for revenue from each business line and the benefits that come from the credibility of the lender. Bajaj Finserv business loan on Finserv MARKETS provides a flexible repayment tenure between 12 and 60 months to help ease your repayment process.
4. Write a solid conclusion
At the end of the letter, write about the immense value that the business loan will add to your current operations. You should demonstrate your experience as an entrepreneur and be confident and price in your ask. The lender will have faith in your business if you are able to demonstrate capabilities in managing cash flows and revenue.
The business loan request letter provides a golden opportunity to make a case for your loan requirements. It provides a chance to personally convey to the lender why they should go ahead and approve your loan application. The letter can be looked at as a space to combine your emotions towards the enterprise with numbers from the balance sheets. By following the above-mentioned steps, you can plan the flow of the letter and ensure that the information is coherent.
A few other tips in improving the letter include highlighting the numbers related to your business in bold, explaining the course of the business, adding information on the suppliers for any assets that need to be purchased, and talking about your personal background. You should also talk about the core members of your team and their management or business experience.
If you have decided on taking on a loan, you should peruse through the information on digital lending platforms such as Finserv MARKETS. They offer a seamless process – for instance, the business loan request letter is not required while applying for a business loan available on Finserv MARKETS.
Depending on the loan requirement and tenure, you can access some of the best interest rates in the market including the Bajaj Finserv business loan interest rate at Finserv MARKETS. In order to strengthen your application, you should upload identification proof (such as the PAN and Aadhar cards), annual statements, information on GST returns, and personal details along with your business loan request letter.
Digital platforms provide the flexibility and convenience that you need to repay your loan in time. Personal loans, in general, can be used for a variety of reasons, but it is essential that you talk about the way you will spend the loan amount. It is almost like drafting a pitch for an investor. However, the lender here is being rewarded for their investment of time and their faith in your application.
Also, read about SME Loan meaning and its benefits
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