A loan application letter in Nigeria stands out when you attach an application letter outlining your interest in the organization as well as your qualifications, experience, and talents.
The letter also should demonstrates to the lender why you are the best candidate for the loan.
If you looking for the best format for your loan application letter as well as what to include, then you have found a perfect guide.
Let’s show you how to write the best loan application letter in Nigeria
What is a Loan Application Letter
This is a detailed letter explaining your aims and the reasons behind your loan request addressed to a possible employer or a company.
The loan application letter presents you as a unique personality, showcasing your accomplishments and abilities in an effort to catch the hiring manager’s or application reviewer’s eye.
This letter should grab the manager’s interest enough to prompt him to ask for an interview with you by highlighting your essential credentials for the loan.
The loan application letter, can make or break your chances of getting a loan. A compelling credit application letter ought to just be one page long and contain six or less passages.
What to Include in Your Loan Application Letter For Business
The letter should persuade the financial lender to approve your loan application by emphasizing critical details about your company’s financial history and current state.
You must be careful with how you structure your loan application letter, what you include in it, and the tone you use throughout because banks use the loan application letter to percieve borrowers and their creditworthiness.
Salutation and Heading
A header and greeting section are essential components of a strong loan application letter. The header of the letter will include the applicant’s name,
address, and phone number, the date, the recipient’s name, address, and phone number, as well as a formal salutation addressed to the recipient.
The information you should include in this section is your name, the name of your company, your business address, your business mobile phone number, the receiver’s name, title, and contact information,
including their physical addresses, as well as a clear subject line that states the purpose of the letter and the precise amount of money you are asking the potential lender for.
Acknowledge The Right Authority
Any correspondence must be addressed to the appropriate person. It is highly important since it marks the beginning of a formal engagement,
and you want this to get off on the proper approach. Always try to determine to whom the application must be filed and be sure to address it.
You can use a more general salutation, such as Dear Loan officer, Manager, etc. if you are unable to identify the loaning officer’s or agent’s name.
Give a Brief Summary
Briefly state the aim of the letter and the amount you are requesting from the potential lender at the start of the loan application letter.
Additionally, you should briefly describe your firm, how the money will be used, and your creditworthiness in this part.
When composing this part, think about excluding everything except the most important information to direct the reader to the letter’s body.
Include Your Business Details
Give the crucial information about your firm in the first body paragraph of your loan application letter. The specific business structure (such as a sole proprietorship, partnership, limited liability company, etc.)
of your company, its legal name, how long it has been in operation, the number of employees it has at present, if any, as well as its annual revenue and profit, are all things you should include in this section.
State The Purpose of The Loan
Describe the loan’s purpose and intended use in the second body paragraph of your letter of loan application.
You must be as explicit as you can in this section and use numbers to describe your objectives.
Avoid making any ambiguous comments, though, as this might give the lender cause for concern and cause them to reject your loan application.
State The Exact Amount
A particular sum must be stated when you have a valid justification for the loan request because this will help the lender determine whether you have the borrowing capacity.
If your earnings are high enough to cover the cost of returning the borrowed funds, that is. It also indicates whether the amount borrowed is appropriate for the purpose for which it was borrowed.
State the Means of Repayment
This expresses your desire to refund the money. Because it provides a complete picture of the loan cycle, this is important.
Be truthful and accurate when giving out information: Because lending money is risky in itself, maintaining a strong credit history depends heavily on you being truthful and accurate about the circumstance.
A strong loan application letter conclusion should include a paragraph referencing the financial statements of your company that are attached,
a few sentences encouraging the reader to review the loan application materials and expressing your eagerness to meet with them,
your signature and printed name, and a list of enclosures.
[City, State, Zip Code]
[Loan Officer/Agent/Lender’s Name]
[Financial Institution’s Name]
[City, State, Zipcode]
REF: Small Business Loan Request for [Dollar Amount]
To Mr/Mrs [Receiver’s Surname],
I am writing this loan request letter to ask for a small business loan amounting to [specify the loan amount you wish to borrow] for the purpose (s) of [provide a practical purpose for the loan, e.g., expanding the business, marketing your business to a target audience, recruiting new staff, etc.]
My business, [mention the company name and specify the business structure], became operational in the year[write the year] with [Mention the number of employees at the time of inception] and one location. Over the last 12 years, we have consistently grown, and we now have [Total number of branches] located in [Mention the various branch locations], and we currently have [write your current number of employees].
My business solely specializes in the [Mention the industry type, e.g., food-service, motor vehicle spare parts, building, and renovation industry, etc.]. We advertise on our official website, [provide your business’s website link] and market our products/services on various social media channels such as [Mention the social media pages, e.g., Twitter, Instagram, Facebook, etc.]. So you can visit those sites to follow our business journey and success stories.
In the previous business financial year, our annual sales revenue amounted to [provide the factual figure in dollar amount], and the business generated a net profit of [write profit in dollar amount or percentages]. These figures prove that we have consistently maintained our cash flow for the past [write the number of years] and have managed to generate profits each year we have been operational.
To promote our continued growth, we have strategized a business expansion plan to reach our target market in remote areas. The loan we are requesting will help us meet our business expansion goals. In addition, we anticipate increasing our total revenue by [quantify in figures or percentages] within the first quarter of opening, which will contribute to our loan repayments.
We want to pursue this endeavor in (mention the anticipated project start dates], and we hope you consider financing our business expansion goals. I have also attached our business plan, the most recent financial statements, including our income statement, business balance sheet, and business credit reports, for your review.
I appreciate you for taking the time to review this loan application letter along with the enclosed financial documents. I look forward to hearing from you at your convenience.
[Loan applicant’s name]
[Loan applicant’s signature]
[Loan applicant’s business title].
[List the enclosures provided]
Format for Loan Request letter to Employer
- Address to the right authority
- State Your Reason for the loan
- State the specific amount
- Mention your positive Attributes in the company
- Mention how you intend to pay back
Sub: Application for Loan to purchase a New Bicycle.
Dear Mr. Walters,
I would like to request you if you could please grant me a loan of $800 as a personal loan as I need to purchase a New Bicycle. Also, I am in need of a new Bicycle as my old one is broken beyond repair and this is the mode of transport to commute to work.
I do not have that amount of money in hand at the moment, hence, I was hoping if you could help me by lending me the money.
As you are aware that I have been with the company for the past 3 years and have proven me to be a loyal and dedicated employee under your kind leadership, hence I believe you would consider me worthy of the loan.
As per the company’s employee loan policy, you can suggest a repayment plan for me as per your discretion to be deducted from my salary.
Thanking you in advance and hoping to hear from you soon.
Customer Service Officer
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Now it’s Your Turn
You can use the above listed formats to write the best loan application letter in Nigeria
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