Should we include personal financial information in a business lending proposal?

For SME facilities where personal guarantees may be required, some lenders will ask for a personal statement of assets and liabilities from directors. This is usually requested separately rather than included in the main proposal. Follow the lender's guidance on what they require and in what format.

How current do the financial figures need to be?

Statutory accounts more than 18 months old will typically need to be supplemented with management accounts. Most lenders want to see financials no more than six months old, and current year-to-date management accounts regardless of when the statutory accounts were filed. More recent figures are almost always better.

How to Write a Funding Proposal for Business Lending

Start with the lender's perspective

A funding proposal is not a business plan and it is not a pitch deck. Its purpose is to give a commercial lender sufficient information to assess risk and structure a facility. The lender's primary questions are: can this company repay the debt from identifiable cash flows, and what happens if the primary repayment source fails?

Write with that in mind. Every section should contribute to answering those questions. Context about market opportunity or company history is useful as background, but it should not dominate the document.

Structure the proposal logically

A workable structure for most SME lending proposals: executive summary (one page); company overview (background, structure, key personnel); financial summary (three years of historic performance plus current year-to-date); the specific funding request (amount, term, purpose, proposed repayment structure); financial projections (base case and downside, with clearly stated assumptions); and security or collateral available.

Keep the total length proportionate to the complexity of the deal. A £250,000 facility request does not require a 40-page document. Ten to fifteen well-organised pages with supporting schedules as appendices is usually appropriate.

Present the numbers clearly

State financial figures in a consistent format — ideally matching how they appear in your management accounts or statutory filings. If you present an EBITDA figure, show the reconciliation from operating profit. If you quote a revenue figure, clarify whether it is inclusive or exclusive of VAT.

Projections should be grounded in assumptions you can defend. Lenders will ask how you arrived at a growth rate or a margin. 'Industry average' is a weak answer unless you can cite the source. 'Based on our contracted order book for Q1 and Q2, plus historic conversion rates on pipeline' is a strong one.

Address risk directly

Many proposal writers avoid the risks section or bury it in vague language. This is a mistake. Lenders will identify risks regardless — the question is whether you have identified them first and thought about mitigation. A proposal that acknowledges concentration risk (for example, one client representing 40% of revenue) and explains how that is being managed reads as more credible than one that ignores it.

Include a brief downside scenario: what happens to cash flow and debt service if revenue comes in 15–20% below projection? Show that the business can still service the facility, or identify what the contingency would be.

Be specific about the ask

State the amount, the proposed term and the purpose with precision. 'We are seeking a £400,000 term loan over 36 months to fund the purchase of two CNC machines at £195,000 each, with the balance covering installation, commissioning and first-year maintenance contracts' is a fundable request. 'We need around £400,000 for equipment and general purposes' is not.

If you have a preferred structure (term loan versus revolving credit, interest-only period, balloon repayment), say so — but be clear you are open to the lender's preferred approach. Demonstrating flexibility signals commercial awareness.