A funding request letter for a small business is a letter that is written by someone who is planning to initiate a small business but lacks the capital for it. It can be addressed to the financial institutions like banks, government authorities, that lend a supporting hand to the people or to any sort of investors, individuals, or organizations. In this letter, the individual requests the addresser for the funds, that can be invested in to start his business. He needs to justify his request as well as convince the fund provider about the chances of success of the business.
There are many people, who want to start their own businesses, but, lack the money for it. Therefore, they go for the best option among the available options and seek funds to start a small business. The possible options could be:
- A bank or any financial institution, that can provide a loan.
- A government institution or authority, that is helping people by providing aid or loan to the starters.
- An individual investor, who wants to invest his extra money to generate additional income.
- An organization, that wants to put his eggs in different baskets, and hence, invests in other people’s businesses.
When the business initiator wants to make a request to any one of the above, he would write a funding request letter for a small business, and seek funds. The information in this letter may vary depending on many factors, that include:
- The complexity or simplicity of the business idea.
- The prepared and detailed business plan.
- The amount of investment.
- Requirements of the addresser.
- Priorities of the business initiator.
However, generally, the following details are present in such letters:
- Details of the addresser.
- Details of the addressee.
- The plan and idea of the small business, with all the relevant details of the required capital, offerings, location, etc.
- Experience, expertise and skills.
- Convincing statements.
- Request and seek funds.
- Mention attached documents, if any.
- State re-payment option or profit-sharing ratio, whatever is applicable.
- Show hopefulness of acceptance of the request.
Sample Funding Request Letter for Small Business
Dear Mr. David,
I am writing this letter to make a request to you for providing the capital for my project of clothes stitching business.
I am a professionally trained tailor and have always wanted to start a small unit but lacked a proper team of skilled tailors. Now, I have brought a group of tailors together as a team and want to start my own business. I have a stitching experience of over 10 years and have built my clientage during my career.
However, I do not have sufficient funds for the venture. The total investment required is $[X], and I have been able to arrange $[Y], which makes my current requirement be $[Z]. I am attaching the detailed business plan with this letter as well, so to provide you my business idea. I will be serving in the ABC locality and would be providing door-to-door service, at reasonable rates.
As our government is supporting small businesses, I want to request you to consider my case as well. I am attaching all the relevant documentation with this letter. Kindly, accept my request, and release the capital for my business. I want to opt for the five-year repayment plan and will make equal payments, with the 5% interest, every year to return the funds.
Looking forward to your positive response. Thank you.
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