A business proposal, also known as a business plan, is necessary when applying for a small business loan at a bank. The proposal should explain what your company does, the experience of management and have a concrete plan with contingencies that to generate revenues and pay the loan back. It is important to understand the requirements of each bank and the structure of the loan in order to customize a proposal for each specific institution.

Ask a lot of questions at the bank you hope to get a loan from. Inquire about the types and amounts of loans. Request information about the standard repayment terms and any collateral that will be required for the loan.

Create an outline of what you will need to place in the proposal. These section should be given headers and placed in a Table of Contents. Be sure to include a Corporate Overview, Management Experience, Marketing Plans and Summary of how loan funds will be used with Pro Forma Statements.

Write each plan section. Use existing company data to create sales charts that project future earnings based on the influx of loan capital. Add photographs of products, factories or locations. Include references to collateral that will be offered as leverage for the loan.

Write a one page cover letter. The cover letter explains why your company needs the funds, how funds will be used and how your company is able to mitigate the bank's risk. Summarize gross revenues and investment returns.

Address the bank underwriting requirements. This section is a compilation of the data you obtained speaking with the bank loan officer and inputting company data demonstrating that your company can be funded under the parameters of the bank loan. Don't rely on the bank to see how your company fits, show them. Hire an accountant if you are having trouble working the numbers to meet underwriting requirements.


While you want to include all pertinent information, try to keep the business proposal under ten pages. Use charts, pictures and bullet points where possible to draw the reader's attention to important information.

Open a corporate account prior to applying for the loan to develop a relationship with the bank ahead of time. Showing positive revenues may help the bank feel more comfortable with lending you money.


Start up companies may not meet the underwriting requirements of a bank loan. You may need to wait six months and increase revenues in order to qualify. Just because a bank was unable to fund you at one point, doesn't mean that will always be the case.