How to Write a Financial Proposal
One of the most overlooked aspects of asking for a loan or grant is the proposal. Anyone who might be willing to loan investor money wants to know why this person needs the money, what plans they might have for the funds, and, most importantly, how they plan to pay the loan back. Getting the first loan proposal out, can be time consuming, frightening and stressful. Knowing what is expected can do a lot to lessen the stress, and make for a better and successful proposal.
What is expected in a Financial Proposal? Like any other loan document, the lender wants to see a well written proposal detailing why someone is applying for a financial or business loan. This is the first and most important time a candidate will try to sell their business. In this document, a loan requestor needs to prove to the lender they are serious and want to do business.
Financial Proposal – Cover Letter
Writing the cover letter is just as important as other aspects of the financial proposal. Use regular business grade paper. The cover letter should be a brief introduction to your company, the size of loan request and the purpose of the loan. This should all be very succinctly written.
Getting a Start with your financial proposal
Begin the proposal with the background information about the person requesting the loan and the company. This means such general information as the name of the company, the address, social security numbers of the principals requiring the loan, the exact amount of money being requested and details on the project on which the money will be spent, or what exactly will be done with the money.
Next, there should be a detailed description that includes information on how the company has performed in the past, details and projected performance of the project and anything unique about the business that the lender should know. Details should also include the legal and ownership structure of the company.
Financial Proposal with all the trimmings
The next part requires information that has been very carefully researched. It is very important that no guess work or equivocation is done, since the information is bound to be checked carefully. Provide market information regarding how the company performs against similar companies. Prepare a management profile for all key employees like managers. Look for ways to make their past accomplishments, qualifications and education stand out.
Financial Proposal preparing a closing – The document should also have complete information of operations of the last three years and this includes projected balance sheets and income statements. Include financial statements from all the owners and any information on collateral that will be pledged as security.
Proofread the document by checking the grammar, spelling and facts. Have at least three other people carefully do the same thing. Make copies of the documents and keep one copy along with a copy of any loan package the lender requires.