Writing a Loan Application Letter for Business [with Sample]

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You typically need to complete an application when applying for a loan from a bank or other lending organization.

You may also submit a loan application letter in addition to this application if you want to provide more information than what is asked for on the form.

This letter, which is addressed to the loan manager, may aid that person in determining whether or not you qualify for a loan.

The letter might include some personal information, but it is also a professional business document, so it should be concise and to the point.

Some Lenders

For a personal loan, several lenders want a typical loan application letter. This indicates that the loan officer is curious in how the money will be used. This is done to ensure that the loan isn’t being utilized for illicit activities.

In the opening paragraph, you should explain why you need the money. You can provide specifics regarding how the funds will be used.

For instance, it might be to landscape a yard or remodel a kitchen. It might also be indicated if these improvements are being made to raise the house’s worth.

Positive Information

The letter for a personal loan could also state when you plan to pay back the sum borrowed in full plus interest. You can also add any encouraging details that will show the loan officer that you are a reliable person.

Information on your employment, previous financial history, such as loans that were paid back on time, and any volunteer work you conduct may be included.

Your desire for a loan and the proposed loan amount should be stated in the first sentence of the loan application letter. The letter can provide personal justifications for the loan request in a matter-of-fact manner.

It may also specify the purpose of the loan and the terms of repayment. All provided financial and company information must be accurate and truthful.

If the letter contains any lies, it may be construed as fraud, which is punishable by the seizure of accounts, penalties, and perhaps even the applicant’s imprisonment.

Small Business

If a small business is requesting a loan, the letter must include specific supporting documents that demonstrates how the money will be used.

The amount of money needed, how it will be repaid, and any security assigned for the loan should all be specified in the letter. The majority of lending institutions want this to protect their investment from the likelihood that the loan will not be repaid.

Some of the documentation that should be included is:

  • The names and job details of the management team including the legal structure of the business, senior management and qualifications
  • A clear understanding of the current marketplace including how the business attracts customers and their daily or monthly sales numbers
  • Proof of substantial experience in the industry such as years the business has been functioning and how the profits have increased each year

The letter should explain how the loan would help the business succeed. It can specify how the loan will be used, such as to buy more inventory, office equipment, or expand warehousing.

Below is a sample loan application letter written by an individual for his business. It should be written in a formal business-letter style and be included with the loan application. The applicant should keep a copy of the application letter.

Sample Loan Application Letter For Business

Your Name
City, State, Zip Code
Bank Account Number: NUMBER


Name of Loan Officer
Name of Bank or Lending Institution
Address of Bank or Lending Institution
City, State, Zip Code

RE: Application for loan of $50,000

Dear Name of Loan Officer:

This is a formal request that you take my loan application into consideration. For the past 20 years, I have been a customer of this bank. 

My salary is transferred into my checking account every month, and for the past seven years, I have also kept a savings account.

Please take notice that I started my business with a $5,000 loan from you 13 years ago, and I’ve always paid you back on schedule. 

My company has prospered, therefore today I’m asking for a $50,000 loan to open a new location on the opposite side of town. 

The property is mine, but I need the money to furnish the office. The loan application and the necessary documentation are enclosed.

I may be reached at the telephone or email address if you have any questions. At a time that is convenient for you, I would be pleased to discuss my request in person, including the repayment plan and the date the loan would be fully returned.

I appreciate you taking the time to review my loan application in advance. I’m looking for a quick and helpful response.


Your Signature
Your Printed Name
Bank Account Number
Enclosures List

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