A loan cover letter is written by an applicant who needs more capital to do a certain activity. It could be a business startup, mortgage or setting up a new building. Such a letter is written to a lender whom the applicant has talked to about their plan.
This letter is important because it formalizes a loan request so that it can go to the next phase of approval. It also has the terms under which the applicant will pay back the loan and the amount being borrowed. The lender also gets more information on the plan, its strengths, weaknesses, how the applicant is willing to address the limitations, and if the plan is worth investing in.
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Tips for writing a loan cover letter
- Explain how you intend to utilize the loan
- Highlight the particular strengths of your plan
- If there are weaknesses in your plan, mention how you will overcome them
- Mention how you intend to pay back the loan
- Keep it brief and formal
- Mention conversations or understandings you have had with the lender
Loan Cover Letter Template
It is almost impossible to venture into business with limited capital. Here is a loan cover letter template that will help you get your loan approved soon enough. Example loan cover letter samples will also be helpful.
Date (date on which letter is written)
I wish to express my warmest regards for the appointed you scheduled to discuss my business proposal. I wish to request loan of $____________ for the purposes of ____________. Over the past ____________years, my business has experienced significant growth and dominated the hospitality market in ____________. I hope to build ____________ and ____________ after identifying an untapped opportunity in the market.
I have experience in the hospitality industry, marketing, and financial management which has promoted the success of my ____________ hotel chains. I am confident that this business will create numerous job opportunities and contribute to overall economic growth.
After reviewing the loan repayment options you offered, I am comfortable with option ____________ and repay the loan in ____________ years. I have also invested $ ____________ of my money in this project. Kindly find the attached architectural and structural plans as well as a detailed business proposal.
I hope for your approval of my request with priority.
Loan Cover Letter Sample
Most people have no idea how to write a loan cover letter. Have a look at our sample loan cover letter that will guide you through writing a perfect cover letter that will ensure your request is prioritized.
8339 Grove Dr.
Miami Gardens, FL 33056
8262 Manor Lane
Cranford, NJ 07016
Date:____________ (Date on which letter is written)
Sub; Request for a small business loan
Dear Mr. Bradley,
From our conversation this week, I wish to apply for a $50,000.00 to expand my hotel El Palacio to a neighboring plot that I have acquired recently. My hotel has experienced significant growth in the past ten years and gained popularity in the hospitality industry. I hope to extend my hotel by building larger capacity conference halls and increase the number of cottages.
I have experience in hospitality management, my marketing strategies and financial management skills have promoted the success of my five hotel chains. I have identified the potential market of getaway cottages for tourists in Miami and conference centers. I am confident that this business venture will improve economic growth in Miami.
After carefully reviewing the loan repayment terms you provided, I wish to proceed with the 4D option. Kindly have a look at the approved architectural and structural plans for the proposed buildings.
Thank you for considering my request.
Loan Cover Letter Email Format
Are you worried about your loan request being passed over numerous times during the approval process? Here is a sample loan cover letter in an email format that will help your application get approved.
Dear Mr. Bradley,
Thank you for scheduling our appointment this week. Regarding our conversation, I wish to apply for a $50,000.00 to expand my hotel El Palacio to a recently acquired plot. I have identified the potential market for getaway cottages and larger capacity conference centers in Miami because of the rising number of tourists.
The hotel has over ten years’ experience in the hospitality industry. My marketing, hotel management, and financial management skills have promoted the success of my five hotel chains. I am confident that this project will support economic growth in Miami and create employment opportunities.
After examining your loan repayment options, I wish to proceed further with the 4D option. I hope to complete the loan in five years. Additionally, I have invested $10,000.00 of my own money in this project. I am comfortable with proceeding with the legal procedures for the loan approval process. Kindly find the attached architectural and structural plans for the proposed buildings.
Kindly also receive my business proposal attached below with more information on the specifics and details of the reasons for the loan request.
Thanks in advance,
Loan applications follow certain procedures which include filling pre-selected and generic forms. A loan cover letter should be brief and formal. It should also indicate why you need the loan, this part should be strong enough to stick in one’s mind and this will help in the approval process. Your cover letter should stand out among other applications and give enough reasons for the lender to approve your loan.