Cedarland Lending, a small-business funding service in Roswell, NM, shows how to write a short business loan proposal: what the money is for, how it will be paid back, the business's record, the local market context from Chaves County, NM Census figures, and the documents that back it up. A plan does not need to be long to be useful.
What a loan proposal is for
A proposal is not a full business plan. It is a short document that tells a partner what you want, why, and how the business will pay it back. For a small-business request, one or two pages plus supporting documents are usually enough.
1. The request in one sentence
State the amount, the purpose and the term you have in mind: "$45,000 to buy and install a second alignment lift, over five years." (An invented example.) Everything else in the proposal supports that sentence.
2. Use of funds
Break the amount into its parts with quotes attached: equipment, installation, opening inventory, working capital for the ramp-up. Partners look for a use that matches the product; a remodel described as working capital invites questions.
3. The repayment source
Explain where the payments come from. For a new lift, it may be the additional jobs per week; for payroll cover, it is the receivables that will clear. Use the business's own history: monthly sales, average job size, collection times.
Illustrative arithmetic for the repayment section
Illustrative only, with invented figures, continuing the alignment-lift example. The shop expects the second lift to add eight alignments a week at $95 each.
- Weekly: 8 x $95 = $760
- Monthly: $760 x 52 / 12 = about $3,290
- After parts and labor at 40% of the price: about $1,975 a month
That $1,975 is the figure to put beside the expected payment. Show where the eight-a-week estimate comes from, such as the alignments the shop turned away or sent out last quarter, so the reviewer can check the assumption rather than take it on trust.
4. The business's record
- Time in business and the entity type
- Annual revenue for the last two or three years
- Existing loans, leases and advances, with payments
- The owners' experience in the trade
5. Market context, kept short
One paragraph of local context helps if it is real. For example: Chaves County, NM had 1,342 employer establishments in 2023, half of them with fewer than five employees, and 38 of them were auto repair shops (County Business Patterns 2023). Use figures like these to show you know the market, not to inflate it, and name the source and year.
Avoid claims you cannot back up, such as being the only shop of your kind in town.
When a partner asks for a fuller business plan
If a partner asks for a fuller plan, add a cash-flow projection for the loan's first year, a short competitor note and a staffing plan. Advising from a small business development center can help (ask the center about any fees); local options are listed in the Chaves County, NM help directory.
How to make a business plan for a business loan, in outline
- Summary: the request, the business and the owners, in half a page
- Market: who buys from you and where, with sourced local figures
- Operations: location, suppliers, equipment and hours
- Management: who runs what, and their experience
- Financials: two years of history and a twelve-month projection by month
- Use of funds: the same breakdown as in the proposal
If your customers come mainly from ZIP 88203, the ZIP-level count is closer to your market than the county total: 350 employer establishments in 2023, 54.9% with fewer than five employees (ZIP Code Business Patterns 2023).
Common gaps partners notice
- A use of funds with no quotes behind it
- Revenue figures that do not match the bank statements
- No mention of existing loans or advances
- A repayment source that depends on sales the business has never reached
Fixing these before the proposal goes out saves a round of questions.
A four-week run-up to a small business loan request
- Week one: download bank statements and collect tax returns and the year-to-date profit and loss.
- Week two: reconcile reported revenue with deposits, and list every loan, lease and advance with its payment.
- Week three: get quotes and write the one-page proposal.
- Week four: have your accountant or an adviser read it, fix what they flag, then send it.
Four weeks is a planning rhythm, not a promise about review times. The point is to stop the proposal going out half-finished.
The folder to prepare for a small business loan
- Between six and twelve months of the business account's statements
- Two years of business tax returns
- Year-to-date profit and loss statement
- Quotes or purchase agreement
- Entity record and any local license
For an operating-cash request, see working capital loans; for what happens after you send it, see how a Cedarland request moves. County counts live on the Roswell, NM page; the remaining posts are collected on the Cedarland blog.
By Cedarland Lending · Updated