How To Write A Business Loan Proposal

A business loan proposal helps lenders understand how much funding you need, how you’ll use it, and how you plan to repay it.

While not every lender requires a formal proposal, having one prepared can strengthen your application — especially when working with banks, credit unions, or SBA lenders.

Here’s what a business loan proposal includes, when you need one, and how to put it together effectively.

What Is A Business Loan Proposal?

A business loan proposal explains why a lender should approve your loan request. It outlines how much funding you need, how you’ll use it, and how you plan to repay the loan, supported by your business’s financial performance.

Because lender conversations are often brief, a proposal helps present key information clearly in one place. It gives lenders a snapshot of your business operations, financial health, and risk profile without relying on in-person explanations.

In short, a business loan proposal helps lenders evaluate whether your business is a good lending risk — and on what terms.

What Do You Need For A Business Loan Proposal?

Before writing your proposal, gather the information lenders use to assess risk, repayment ability, and business stability.

Business Information

Lenders need a clear snapshot of your business, including:

• Business name and legal structure
• Time in business
• Annual revenue
• Number of employees

You should also be prepared to briefly explain your business model: who your customers are, how you generate revenue, and where you fit within your industry. If you already have a business plan, include it as supporting documentation.

Financial Documents & Cash Flow

Your proposal should be supported by recent financial records, such as:

• Profit and loss (P&L) statements
• Balance sheet
• Cash flow projections based on historical performance

Most lenders will also request:

• Business and personal tax returns (typically 2+ years)
• Bank statements
• Business and personal credit reports

These documents help lenders evaluate your ability to manage cash flow and repay debt.

Existing Debt Information

If you have current loans or financing, be ready to provide:

• Lender names and contact information
• Outstanding balances and original loan amounts

This allows lenders to assess your overall debt load and how a new loan would fit into your repayment obligations.

Owner & Management Information

Lenders often evaluate the people behind the business, especially for smaller or closely held companies.

Be prepared to share basic information for owners, partners, and key managers, including names and contact details.

Online Presence & Marketing Activity

While not always required, your online presence can support your application.

A website, social media profiles, or other marketing efforts help demonstrate that you’re actively working to attract and retain customers.

How To Write A Business Loan Proposal

Once you’ve gathered your information, focus on presenting it clearly and logically. A strong loan proposal doesn’t need to be long or creative — it needs to be organized, specific, and easy for a lender to evaluate.

What To Do If You Don’t Get Approved For A Loan

Even a strong loan proposal doesn’t guarantee approval. Common reasons a business loan may be denied include:

• Weak or limited credit history
• Not meeting the lender’s eligibility requirements
• High existing debt or insufficient cash flow
• Errors or missing information in the application

If your application is denied, ask the lender for the specific reason. That feedback can help you determine whether the issue is fixable, such as correcting documentation, improving cash flow, or applying for a different loan product.

While a well-prepared proposal won’t overcome every obstacle, it can reduce avoidable issues and put you in a better position the next time you apply.