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Applicant:

​[Sender.FirstName][Sender.LastName][Sender.Company]​

​[Sender.Company] ​[Sender.StreetAddress][Sender.City][Sender.State][Sender.PostalCode]​

​[Sender.Phone][Sender.Email]​

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Bank Loan Proposal Template

Lender:[Lender.Company]​

Attn:[Lender.FirstName][Lender.LastName]​

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Table of Contents

Introduction

  1. Company profile

  2. Partner histories

Loan request

  1. Amount

  2. Loan repayment

  3. Collateral

  4. Financial statements

  5. Income statements

  6. Cash flow statements

  7. Balance sheet

  8. Financial forecast

  9. Projections

  10. Business operational data

  11. Confirmation

What should be included in a bank loan proposal?

A bank loan agreement or proposal is a document used by prospective borrowers for a loan application. It should include the amount of money you want to borrow, your business profile, why you are borrowing, how you will repay, etc.

Loan proposal letter

The introduction section is similar to a cover letter, so feel free to use a letter template as a reference when writing this section. Include a brief description of who you are, your background and qualifications, the type of startup you want to create, and where the loan money will be used. And so forth. You can include a photo of yourself and links to your social media pages to personalize your proposal.

Dear [Lender.FirstName][Lender.LastName],

I have been in the restaurant industry for more than two decades, holding both front of house and back of house positions. I've worked in several major U.S. markets, including New York City and the San Francisco Bay Area, and overseas in South America and Europe.

I first started out in my grandfather's restaurant busing tables and doing dishes, and for the past 5 years I have been the manager of a highly acclaimed and popular destination restaurant in San Francisco. I also hold a Bachelor's Degree in Food Business Management from the Culinary Institute of America.

Since those early days in grandpa's kitchen, I have wanted to run my own restaurant. I believe my time is now, as I have the necessary experience, industry relationships and connections to make this happen. With help from those industry connections, I've created a sound business plan that borrows from established ventures but takes things a step further.

The following proposal will show [Lender.Company] why I’m seeking a loan to launch my restaurant and how the money will be used to complement my existing capital.

Sincerely,

​[Sender.FirstName][Sender.LastName]​

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This bank loan proposal sample is for someone who works in the restaurant industry. You can change the wording of the letter for your industry.

Company profile

Give the lender a sense of your business’s history and where it stands today, along with your target market and clientele, and an overview of your fit in the industry. This will show your lender that you are qualified to do business in your desired sector. Also include applicable photos — for example, photos of your logo or an interior shot of your business, your staff members, or renderings you’ve created.

At its core, a restaurant is a gathering place to relax, refuel, and socialize with others. The world is full of different cultures, but one thing we all share are meals together. I've taken this ethos to heart, and it is the driving force behind my concept for a restaurant.

In San Francisco, it's not enough to just serve good food; you are selling an experience as much as a meal. The city is one of the top markets for restaurants in the country. It was one of the first two regions, along with New York, in the U.S. reviewed by Europe's esteemed Michelin Guide, and it contains the most restaurants per capita of any U.S. city. In essence, San Francisco is a trend-setter in the food world.

My restaurant is currently in the buildout phase, with an anticipated opening date of six months from now. We have secured a lease for a space in a neighborhood that has steady foot traffic, is popular with tourists and locals alike, and does not have any similar restaurants already.

The space will be bright and open, with an exposed kitchen in the rear to show off food production and a 360 degree bar in the center with ample space to wait for a table and have a drink. We are aiming for seating of up to 50 at a time in order to give patrons a more personal experience.

We envision a younger clientele, with plenty of out-of-towners due to the neighborhood being popular with tourists. Our prices will be very competitive in order to attract customers, but I also believe in living wages and benefits for our employees. To this end, all tips generated by the service staff are pooled together and dispersed equally depending on each employee's function in the overall operation of the restaurant.

​

Partner histories

Tell your potential lender who has invested in your business and why they’ve chosen to do so. This will show your lender that you are qualified and well-connected in your industry.

In addition to myself, there are two more investors in my restaurant. We each bring something unique to the concept, all having spent our careers in the restaurant industry.

One investor is a veteran in beer, wine, and spirits who runs a bar consulting business in San Francisco. He has helped open some of the city's most popular and well-respected establishments. He has also won numerous industry awards. His focus is on using fresh ingredients to craft cocktails that pair well with food.

The other investor is a seasoned chef who has worked for some of the finest restaurants in the U.S. for two decades. He studied cooking in France, and held two apprenticeships in Spain. His food has been lauded as "cutting-edge California cuisine."

I bring to the team the front of house experience, handling the direct contact with customers and managing the service staff. I have over 10 years of direct restaurant management experience at high-volume locations in San Francisco and New York.

Management

Include detailed biographies of all officials, managers, stockholders, and key employees, including, but just not limited to: professional experience, affiliations with other enterprises, training and experience (especially that corresponding to the industry), amount of time to be dedicated solely to the business, and stake in the company.

If you have outside experts that have agreed to be a part of your venture through any agreement, actual or intended, include their names with the names of your investors and lawyers.

​

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Loan request

Amount

Tell your potential lender how much you need and why. Provide specifics about how the money will be used and how you arrived at that particular figure. The below mentioned sample serves as a reference guide as to how you’re supposed to create a summary of the money needed.

Our budget for the restaurant is $250,000. Of that, the three investors (myself and the two others mentioned) have raised $125,000, meaning we need another $125,000 to launch the restaurant.

Our existing investment is being used to pay lease costs on the space while it's built out and construction expenses to renovate the interior. It's also going toward city and state permit and licensing costs associated with restaurant and bar operations. As stated previously, we anticipate an opening date of six months from now.

The money we are requesting from [Lender.Company] will go toward the following needs:

  • Kitchen equipment, $75,000: We believe quality food comes from good products. We need to purchase general cooking utensils, tableware and silverware, a new industrial-size oven with a 10-top burner, and refrigeration equipment.

  • Bar equipment, $25,000: Our bar will use only the finest ingredients and spirits available, in addition to a small and well-curated beer and wine list. We have established relationships with beverage industry distributors for these products at competitive rates.

  • Food, $25,000: No restaurant is complete without its menu. Through our years of experience and vast connections, we have established relationships with food purveyors around the state of California and elsewhere in the U.S. to supply the restaurant. These products will be the last items ordered before opening.

​

Loan repayment

Tell your lender what kind of loan you desire and the terms for repayment, such as the interest rate. You also want to show how you will repay the loan based on sales and cash flow projections in your loan proposal. If you are unsure of what to expect, do some online research and plan to negotiate with the lender. Add additional requests if needed, such as opening a line of credit.

We are asking [Lender.Company] for a loan of $125,000 to be repaid over one year at a rate of 6% interest, making payments of $11,041.67 monthly.

Our estimates for revenue are an average of $6,000 per day over 22 operational days per month for a total revenue stream of $132,000 a month. After factoring in staff costs of $25,000 per month and operational costs of $75,000, we are left with enough money to comfortably repay a loan under those terms.

Collateral

Lenders will ask for security for your loan. Collateral is essentially insurance for the lender in case cash flow projections don’t materialize. You and your business partners will need to put together assets that can be used as collateral. This can be done in a simple Excel-style spreadsheet and should be attached to your loan request proposal (you can also send a Word doc or a PDF file).

Spreadsheets for each partner are attached showing various forms of collateral we are putting up as security for our loan request. Among them are mutual fund investments, equity from ownership of two separate residential properties, and savings accounts.

Financial statements

These are more documents that you will need to attach with your loan request. Each partner/investor in your business who has more than a 20% stake should include personal financial statements that are less than 90 days old. You may also be asked for tax return documents for up to three years. As for the business financial statements, if you are asking for a loan for an existing business, then include balance sheets, loss statements, income statements, tax return documents and reconciliation of net worth for a three year period. If you are requesting a loan to launch a business, then include projections of income and a balance sheet.

In general, it is essential to include details about your Income Statement, Cash Flow Statement, and Balance Sheet. These are the three major financial statements you must include, as they will supply the basic general financial information about the borrower.

Attached to this loan request are personal and business financial statements for each partner.

Income statement

Mention your income statement details here

The company’s expenses and sales revenue are broken out on the income statement to indicate where the company’s net profit comes from. The income statement enables the bank to respond to queries like how much it costs to produce a good or service when expressed as a percentage of the sale price, or how much fixed expenditures, such as rent, reduce earnings.

The income statement reflects if the firm follows a discounted price/high volume strategy or offers a premium product with a significant profitability ratio but fairly low demand. Given the anticipated shifts in the competitive environment and the economy in general, they show whether the profit levels are feasible over the coming months and years.

Cash flow statement

Mention your income statement details here

Lenders require proof that your regular business activities will earn adequate money to pay back the loan, and to achieve that end, financial institutions study both the statements of cash flow and the net income in addition to the financial statements. The origins of both inflows and outflows of cash are described in this section.

Cash inflows and outflows within a certain financial period could be the results of decisions made in the past. The cash flow sheet clearly displays the payback of a debt taken out years ago, which will result in a substantial financial outflow. It won’t appear on the income statement because it is neither a gain nor a loss. Therefore, the bank must carefully examine how the business handled its financial resources to determine if the borrower will be able to repay the borrowed loan.

Balance sheet

A balance sheet is simply a description of a firm’s assets and liabilities. One portion of the balance sheet shows all assets, including real estate, machinery, buildings used as offices and factories, cash, and other items. On the right side of a balance sheet are obligations, such as anticipated income taxes, accounts payable to merchants for goods acquired on debt, and loan commitments to other lenders. These facts must be disclosed to the bank since the revenues from the sale of the properties are the sole source that may be used if earnings are insufficient to cover the loan.

Attached to this loan request are personal and business financial statements for each partner.

Financial forecast

It’s likely that if you seek a loan, you will be required to submit a fiscal projection for your company. Your existing financial situation will be a key component of the selection process. A lender will also desire to know your economic goals for the company and your proposed path to achieve them. A successful firm must have the ability to make accurate financial predictions and forecasts.

The majority of firms depend on bank financing for expansion. For your enterprise to be approved for credit, an equipment loan, or a lease on real estate, you will need to provide all necessary documents proving the viability of your operation, how you plan to use the cash, and your capacity regarding repayment of the loan. Include such details here.

Projections

As mentioned above, you’ll need to give your potential lender income and cash flow projections if you’re requesting a loan for a new business. If your loan is for an existing business, then you’ll be required to present recent income and cash flow documentation. You will also want to show your lender how you will adjust operations in the event that your projections do not materialize.

Other documentation attached to this request includes income and cash flow projections for the restaurant, and alternative operational structures in the event our projections do not materialize.

Business operational data

The relevant issues that are discussed in narrative form in this portion:
(a) A description of the business as it is carried out, as indicated by the SICS code, including the main goods supplied or services provided.
(b) The overall evolution of the goods and/or services as during the past three years or since launch.
(c) The percentage impact of each main product or offering to the size of the business and its earnings.
(d) Material variations in item or service kinds.
(e) A rough five-year plan outlining the firm’s aims and goals, together with expected income and sales.

Confirmation

I, [Sender.FirstName][Sender.LastName], attest that all information mentioned above is true to the best of my knowledge and understanding.

​[Sender.Company]​

​[Lender.Company]​

​

Signature
MM / DD / YYYY

​

Signature
MM / DD / YYYY

​[Sender.FirstName][Sender.LastName]​

​[Lender.FirstName][Lender.LastName]​

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Bank Loan Proposal FAQ

  • A loan proposal is a document that is prepared by prospective borrowers to get a loan from a bank. It includes details such as amount required, financial statements of the borrower, projections, company profile, etc.

  • A new loan proposal is your first and best chance to acquaint the lender with yourself and your company. Alongside writing down your company profile, loan request, financial statements and other requested data, be sure to make it as personalized as possible, if relevant to helping acquire the loan (these include pictures, stories, links to your social profiles, etc.)

  • Any bank loan proposal begins with an introduction by the person who’s seeking the loan. Next, you follow it with details such as company profile, partner histories (if you have any), loan request, loan repayment, collateral, financial statements, and projections.

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