A soft loan is a type of loan that features little or no interest rate and is offered majorly by governmental bodies especially to developing countries to help fund their needs.
In this article, we have highlighted a few important tips and templates that will guide you on how to craft a good application letter for a soft loan. Read on to discover the pros and cons you never knew about soft loan.
One of the biggest financial institutions that offer soft loans is the World Bank. World Bank comprises of two independent bodies- International Development and Association (IDA) and International Bank for Reconstruction and Development (IBRD)
Established in 1960, IDA (International Development Association) is an international financial institution in the process of offering concessional financing and grants to the underdeveloped countries of the world.
IDA is headquartered in Washington D.C, USA. it was established to complement the already existing International Bank for Reconstruction and Development to lend to countries with poor creditworthiness and lower per capita income.
Applications for Softloan- Best Tips
Loan Application is the letter that helps the lender decide if you’re qualified for the loan. Crafting a Loan Application Letter cover letter that catches the attention of hiring managers is paramount for you to get a loan offer.
Below are tips on how to write a good loan application letter.
Short Applications for Softloan Sample
The Business Manager
(Name of Bank)
(Branch, address, and location)
Dear Sir/ Madam
Application for Personal Loan
I am requesting a business loan in the amount of $15,000.00 for the purpose of expanding my warehouse facilities. My business has experienced significant growth over the past three years. This increase in business necessitates I expand my current warehouse facilities to accommodate a larger inventory.
I have experience in the home decorating business and I am considered an expert consultant in the industry. My interior design plans have been featured in several national magazines, including Architectural Digest, Home Embellishments, and Jenny’s Town and Country Designs. I started Lindon’s Home Decorating Services in 1995 and the company has earned a profit consistently year after year, even during the recent recession.
The market for this business is heavily dependent on the housing market and the health of the economy. Over the years, I have pursued and won major contracts with national hotels. This steady stream of work protected my business during the recent recession. Today, the housing market is improving rapidly and the projected growth exceeds prerecession numbers. In addition, sharp increases in the building supply market suggest a growing trend in home remodeling.
My clientele includes five large hotel chains and two large national corporations that provide my company with new work orders each month. I utilize cost-effective marketing strategies that result in an average of 200 new orders every month from private homeowners.
To date, I have invested and recouped through profits $200,000.00 of my own money. I intend to invest $50,000.00 of my own money for this specific project. My collateral consists of business assets with a fair market value of $950,000.00 and personal assets valued at $550,000.00.
I am enclosing my business plan, which details the reasons for the loan request. If you have any further questions please do not hesitate to contact me.
Cintho’s Home Decorating Services Santa Clara, CA 555-555-555United States firstname.lastname@example.org
Enclosure: Business Plan
Name of applicant
Address of applicant
City, State, Zip Code
Name of Loan officer
Name of Bank
Address of Bank
City, State, Zip Code
Dear Name of Loan officer,
Request For Loan
Exactly one year ago I started a cloth napkin company out of my own home. Over the last year, my business has experienced significant growth up to the point where I now need to expand.
I am writing this letter to request a loan so that I can expand my business. I am very confident that there is a strong market for cloth diapers in the US. I have many repeat customers and my client base is growing rapidly as word about my business spreads throughout the community. Therefore I am requesting $10,000. This money along with the money I already have saved up myself will allow me to lease a modest storefront and to purchase all the paperwork supplies and equipment I need to launch the new space.
I have attached my business plan as well as all of the paperwork needed to apply for this loan. You will see that I have an excellent credit history and a solid business plan. If you have any further questions please do not hesitate to contact me.
Signature of Applicant
Printed Name of Applicant
List of Enclosure
Pros And Cons of Softloan Program