Writing a Strong Business Plan Cover Letter (with Examples) Use these sample business plan cover letters as templates for your formal cover letter.
When submitting a business plan to a lender or investor, it is important to include a business plan cover letter that is addressed to the person who will review the business plan. This is the applicant’s chance to have a personal word with the lender and prepare him or her for reading the business plan.
The feasibility of the business will be judged by the business plan. People starting a small business may spend hours preparing their business plan, but not give much thought to the cover letter. This is a mistake. The cover letter is an integral part of the plan.
If the applicant doesn’t know the name of the person who will read the business plan, they should call the bank, lending institution or investor to get the name. Even if the applicant knows the lender, they should still submit a formal business plan with cover letter. If they do not know the lender, they should remember that the lender will judge them by the content and tone of the letter. The letter should be short, not more than one or, at the most, two pages. It should state right at the beginning that a business plan is attached, and that the applicant is applying for a business loan to start or develop a business. It is important to state clearly the benefits for the bank or investor. They need to believe there will be a good return on their investment, or that the loan will be repaid on time.
Some tips for the style of the letter are: • Use a formal, conversational tone • Do not use slang and contractions • Do not make it too wordy • Give a list of the main points with an explanation for each • Use the active voice and short sentences • Make the business sound interesting, so they want to read the plan
The letter should also state why the business is better than the competition. It can relate some marketing facts, focus group responses, demographic data or other key statistics from the business plan, but it should not be overloaded with these facts. It can have just enough to present the business as viable and show that the applicant has done his or her market research. The rest of the statistics are in the plan.
There should also be a brief mention of the financial position without going into too much detail. The letter can mention how much has already been invested in the business, and what profits are projected for the next year or two. This will show the lender or investor that the business is worthwhile.
Here are examples of a business plan cover letter. It should be personalized for each lender or investor to whom it is sent.
Sample 1 - Business Plan Cover Letter Sample Name of Applicant Address of Applicant City, State, Zip Code
Name of Investor or lending officer at a Lending Institution Name of Bank or Lending Institution Address of Bank etc. City, State, Zip Code
Dear Mr/Ms. Name of lender or investor,
I am submitting my business plan to you in the hope of receiving a start-up loan for $50,000. I learned about your history of funding recycling centers, and my proposal takes the business to the next level. We will be a source for other businesses who want to use recycled products or use waste material to recycle into their own products. According to our research, consumers are looking for businesses that use environmentally friendly products.
I have $10,000 inheritance from my grandfather that I plan to invest in the business. As stated in the plan, we aim to make $5,000 profit the first year and reinvest in the business to widen our clientele. We will be the first company in the city to offer this service, so we hope to be well established before competing companies enter the industry.
My brother, Name of Brother, and I are working together to make this business a success. We have worked for the last five years in Name of Company, where they manufacture plastic sheeting for construction companies from recycled plastic.
As stated in the plan, I will collect the waste material and my brother will manage the accounts. We plan to employ office help and waste collection help. We have contacted several recycling centers in the city who agree to sell us their recyclable waste. We have found a warehouse available to rent when we go forward with the business.
Thank you for your time and consideration in this matter. I hope you will review my business plan. If you have any questions or would like to discuss the plan, I can be reached at 555-123-4567 or at [email protected] I would be happy to meet you at any time that is convenient for you.
Sincerely, Signature of Applicant Name of Applicant Printed Business Plan Enclosed
Sample 2 - Business Plan Cover Letter Michael Jones, Mike's Bistro 419 East Geraldine Avenue Podunk, IA 54301 (555) 555-5555
Mrs. Kathy Smith, Podunk Bank and Trust 3012 Highland Street Podunk, IA 54301
Dear Mrs. Smith:
Attached to this letter is a plan for my business, Mike's Bistro. I have carefully considered the needs of my business and why it will be a good investment for your bank. I hope you will consider the loan I am asking for. Thank you for your consideration.
Podunk has no true bistro restaurants and I wanted to bring some of the big city appeal of them to our small town. I have been cooking all my life and think that I could create a unique and profitable restaurant experience. My business plan shows that I already have $3,000 to invest in remodeling the old ice cream shop on baker into the bistro. I believe I can make a $50,000 profit by the end of the year once the doors open to the public by April.
Thank you for your interest and consideration in this. I understand your time is valuable. If you wish to discuss my business plan with me in person I am always available to arrange an appointment. Thanks again.