Bank Loan Request Template

WRITINGGUIDE

Readerswhodonotyethavetheadvantageofknowingyouwilljudgeyoubyyourwriting.



lly.Avoidslangandcontractions.Donot

ners.

Paysomeattentiontowhatyousayandhowyousayit.Whatfollowsisasamplecoverletter

forabankloanrequest.Notehowmuchinformat ionispackedintoashortletter,andthatit

focusesonwhatabankerwouldmostwanttoknow.

Writeasyouwouldspeak,butjustalittlemoreforma

trytomakeittoofancy.Startwithalistofthemainpointsyouneedtogetacross;thenstart

explainingthem.Useonlythethreebasictenses,past,present,andfuture.Refertoyour

businessbyitsname,orʺitʺ.Thus,Contoso,Ltd.wasformedin1996etc.,isnowcalled

AdventureWorks.UseʺIʺorʺweʺonlywhenreferringtotheactionsoftheindividualow

Writeintheactivevoiceandinshortsentences.

ExecutiveSummary

ADVENTUREWORKSisahigh‐enddesignandremodelingfirmwithareputationfor

integrity,qualitycraftsmanship,andexcellenceinmanagement.Inthreeyearsannualsales

haveincreasedtobewelloveramilliondollars.

ADVENTUREWORKSwasformedbyBrianGrothasaSoleProprietorshipinDecember1997.

In1998acombinationofactivitiesinvolvingresidentialdesign,consulting,andgeneral

constructionbroughtGrossSalesof$250,000.

TheCompanyexperiencedsteadygrowthsinceitsinception,andincorporatedinMarch1999,

(seeAppendix6,ArticlesofIncorporation).In1999GrossSalesof$750,000wereachieved.In

2000,signedcontractsshowthatGrossSalesareexpectedtobe$1,300,000(seeAppendix2,

currentBacklog).

TheCompanyhasitsaddressinleasedpremisesat1234AStreet,Springfield,MD40523.Its

activitiesfallundertheStandardIndustrialClassificationSIC1521and1522.Theownersare

BrianGrothandJulieBankert.

ADVENTUREWORKSisinvolvedinfourdistinctactivities:

1. ArchitecturalDesign

2. Residential&LightCommercialConstruction

3. PropertyServices

4. RetailFloorCoverings(seeAppendix4).

EightytoninetypercentoftheGrossSalesareindesignandconstruction.Atthemoment(May

2000),thereare25permanentemployeesonthepayrolland10subcontractedworkers

excludingsubcontractingcompanies(seeAppendix1forresumes).

ThecompanyʹsShortTermObjectives(within thenextthreeyears)aretoincreaseactivityinall

Divisions,andtoachieveannualprofit,netaftertaxes,of$200,000by2005.ItsLongterm

objectivesare:tomaintainthelevelofcurrentbusinessachievedupto2005,andthentomove

intohistoricalrestorations,morelightcommercialwork,andincreasednewcustomhome

construction.

Toimplementtheseobjectivesthecompanyneeds:

1. Aloanof$100,000atPrimeplus2%.Thisloantobeusedforcurrentneartermexpenses

including__________________,______________and____________Itwillberepaidin

fiveyears.

2. Alineofcreditof$50,000totakeadvantageofdiscountsavailable,avoid associated

penalties,andexpandintohighprofitareasrequiringpositivecashflow.

TheprospectsforADVENTUREWORKS’ continuedgrowthareexcellent,with2000

constructionanddesigncontractsunderwayalreadyexceeding$550,000(seeAppendix2,

Backlog2000).

Forequitythecompanyhasassetsof$227,000(seeAppendix9,BalanceSheetasof

mm/dd/2003).Additionally,thecompanyʹsownersarewillingtoofferascollateralasecond

mortgageonaresidencewithanestimatedequityof$150,000.Theaddressofthisresidenceis

456OakDr.,Mt.Vernon,CA31304.

Thecompanyʹsoverallobjectiveistosatisfythatmarketsegmentthatdemandsintegrityand

qualityconstruction,andtomaintainasteadygrowthinsalesvolumethatwillsustainthe

companyfortwentyyears.BrianGrothhasenhancedhisreputationtothepointwherethe

companyisregardedbymanyarchitectsastherecommendedchoicewiththeirclientsdueto

theexcellenceofitscraftsmenandmanagement.

MarketresearchshowsthatthepopulationinSpringfieldhasincreasedby200,000between

1985and2003.Thisincreaseinpopulationbroughtaboutanincreaseof19,850newsingle

familyhomesvaluedatoverthreebilliondollars.Thisincreasegivestheareaover128,000

existinghomesasapotentialremodelingmarket.DemographicestimatespublishedbytheState

OfficeofFinancialManagement,2002,indicatethatanadditional20,000personswillneedtobe

housedbetween2002and2020.ADVENTUREWORKSintendstopursuethismarket

vigorously.(SeeAppendix7fordataonanticipatedchangesinthepopulationoftheCounty).

FinancialObjectives

ThefinancialobjectivesofADVENTUREWORKSoverthenextfewyearsareasfollows:



2005 2005‐2010

Sales

$7,000,000 $10,000,000

NetIncomeafterTax

$500,000 $1,000,000



Pleasereviewtheenclosedbusinessplanandloanproposal,andofcoursefeelfreetoaskfor

anyadditionalinformationorexplanationsyoumaywant.Iwillcallyouinaboutoneweekʹs

timetoarrangeanappointmentsothatwecandiscusstheloaninperson.

Ilookforwardtoamutuallyprofitablerelationship with theWoodgroveBank.

Sincerely,

BrianGroth