Business Loan Letter Assignment. For your next assignment, you will be writing a business loan letter.

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1 Business Loan Letter Assignment For your next assignment, you will be writing a business loan letter. You have learned about the parts of a computer. You have researched prices for those parts. You have put together a spread sheet that adds those prices together to give you the cost of assembling your own computer. No, you do not have the experience of assembling your own computers. (The school does not have the resources for the supplies necessary to have you all assemble your own computer. Otherwise I would have you all assemble one.) You have used your spread sheet to calculate the costs you would need to buy the number of computers you think you could assemble in a week. You have estimated a sales price for you computers and calculate your net earnings for selling one week s worth of computers. You have found the difference between your costs and your net earnings to estimate your weekly profits. Imagine that you were to use this information to create your own computer manufacturing business. You will buy parts, assemble them, and sell the computers. How much money would you need to start this business? Where would you get that money? Often, people who want to start a business turn to banks to get a business loan, which they could use to start a new business. Using the information from your spreadsheet, you will write a business loan letter requesting the money you would need to start your computer manufacturing business. You will be writing your loan letter on Libre Office Writer, you will be learning basic techniques for formatting a business letter using a word processing program. You will also be learning some basics about formal business English.

2 Code Switching If you think about it, we often switch the way we speak or write depending on who we are speaking or writing to. If I was sending a text message to a friend of mine, it might be considered normal if I sent a text message that looked like this: hey frank what ru doing l8r This is normal as a text. Standards for writing a text messages are based around the idea that the writer is writing the message without a full keyboard and is writing quickly. Capitalization and punctuation are often dropped from text messages. Writers often abbreviate or use slang shortenings of words. All of this makes sense for text messages. However, we considered it to be awful academic English. In formal academic English, we would write this: Hey Frank, what are you doing later? Knowing what style of English you should use in a situation and switching how you communicate to match is called code switching. For this assignment you should code switch to formal business English. Formal business English is slightly different from formal academic English and far different than the way most people write when they are texting. Writing Guide for Business English Readers who do not know you will judge you by your writing. Pay attention to what you say and how you say it. Bellow, you will find a sample cover letter for a bank loan request. A cover letter is a letter that goes onto a stack of formal documents, like a loan application. It is the first thing the person reviewing those documents will read. You should notice information is put into a short letter. It focuses on the information the bank needs to know in considering the application. As you read through the cover letter. You should consider the following. In formal business English, you should write the way you talk. Just be more formal. Read what you are writing out load to yourself as you write. Consider whether it sounds correct as you say it. Avoid slang and contractions. Do not try to make it too fancy. Start with a list of the main points you need to get across; then explain them. Use only the three basic tenses, past, present, and future. Refer to your business by its name, or "it". Use "I" or "we" only when referring to the actions of the individual owners. Write in the active voice. Use short sentences.

3 Formatting a Business Letter Include a formal address on the first line. If you know the name of the person who will be reading the letter, use their title and last name: Dear Mr. Manuel, Dear Dr. Noble, Dear President Obama Etc. If you do not know their name, but know their position, use their position as a title: Dear Hiring Manager, Dear Bank Loan Officer, If you do not know the title for their position, you can use a generic formal greeting: To Whom It May Concern, Dear Sir or Madam, There should be one line space between your greeting and your opening paragraph. In a formal business letter, paragraphs are separated by hard returns, leaving one space between paragraphs, and not indented. Do this by hitting the <enter> key twice. Use single spacing, not double spacing. Choose a clear, professional font. You can change the font of your text by selecting the font drop down menu at the tool bar of your program window. Acceptable fonts for Microsoft Word include Plantino, Times New Roman, and Arial. Acceptable fonts for Libre Office Write include Liberation Serif, Liberation Sans, Droid Serif, Droid Sans. Do not use Gothic fonts, scripted fonts (fonts that resemble cursive), or causal fonts, like Comic Sans. Examples of fonts you should not use: This is a Gothic font. Notice that the lower case letters just look like small upper case letters. Do no use this. This is a script font. Notice how it looks hand written. You should also notice that it is difficult to read. Now imagine that your job is to read fifty cover letters a day. This is a font called Comic Sans. It is intended to look like the font used in comic books. It is considered to be too informal for business writing. Save it for party invitation flyers. Read the following business loan cover letter. Make note of the content and style. Notice that the title of the company is always written in all capital letters.

4 Notice that subsections of the letter are labeled using title case and are bold. To make a section bold, you can simply highlight a section of text and type <ctrl>+b. Notice that two sections are put into number lists. You can do this using the number list button that you will find in the tool bar. You letter, of course, will not have this much information, but you should copy as much of the style as possible.

5 Dear Bank Loan Offfice: ADVENTURE WORKS is a high-end design and remodeling firm with a reputation for integrity, quality craftsmanship, and excellence in management. In three years annual sales have increased to be well over a million dollars. ADVENTURE WORKS was formed by Brian Groth as a sole proprietorship in December In 1998 a combination of activities involving residential design, consulting, and general construction brought Gross Sales of $250,000. The company experienced steady growth since its inception, and incorporated in March 1999, (see Appendix 6, Articles of Incorporation). In 1999 Gross Sales of $750,000 were achieved. In 2000, signed contracts show that Gross Sales are expected to be $1,300,000 (see Appendix 2, current Backlog). The company has its address in leased premises at 1234 A Street, Springfield, MD Its activities fall under the Standard Industrial Classification SIC 1521 and The owners are Brian Groth and Julie Bankert. ADVENTURE WORKS is involved in four distinct activities: 1. Architectural Design 2. Residential & Light Commercial Construction 3. Property Services 4. Retail Floor Coverings (see Appendix 4). Eighty to ninety percent of the Gross Sales are in design and construction. At the moment (May 2000), there are 25 permanent employees on the payroll and 10 subcontracted workers excluding subcontracting companies (see Appendix 1 for resumes). Short Term Objectives The company's short term objectives (within the next three years) are to increase activity in all Divisions, and to achieve annual profit, net after taxes, of $200,000 by Its long term objectives are: to maintain the level of current business achieved up to 2005, and then to move into historical restorations, more light commercial work, and increased new custom home construction. To implement these objectives the company needs: 1. A loan of $100,000 at Prime plus 2%. This loan to be used for current near term expenses including, and It will be repaid in five years.

6 2. A line of credit of $50,000 to take advantage of discounts available, avoid associated penalties, and expand into high profit areas requiring positive cash flow. The prospects for ADVENTURE WORKS continued growth are excellent, with 2000 construction and design contracts underway already exceeding $550,000 (see Appendix 2, Backlog 2000). For equity the company has assets of $227,000 (see Appendix 9, Balance Sheet as of mm/dd/2003). Additionally, the company's owners are willing to offer as collateral a second mortgage on a residence with an estimated equity of $150,000. The address of this residence is 456 Oak Dr., Mt. Vernon, CA The company's overall objective is to satisfy that market segment that demands integrity and quality construction, and to maintain a steady growth in sales volume that will sustain the company for twenty years. Brian Groth has enhanced his reputation to the point where the company is regarded by many architects as the recommended choice with their clients due to the excellence of its craftsmen and management. Market research shows that the population in Springfield has increased by 200,000 between 1985 and This increase in population brought about an increase of 19,850 new single family homes valued at over three billion dollars. This increase gives the area over 128,000 existing homes as a potential remodeling market. Demographic estimates published by the State Office of Financial Management, 2002, indicate that an additional 20,000 persons will need to be housed between 2002 and ADVENTURE WORKS intends to pursue this market vigorously. (See Appendix 7 for data on anticipated changes in the population of the County). Financial Objectives The financial objectives of ADVENTURE WORKS over the next few years are as follows: Sales $7,000,000 $10,000,000 Net Income after Tax $500,000 $1,000,000 Please review the enclosed business plan and loan proposal, and of course feel free to ask for any additional information or explanations you may want. I will call you in about one week's time to arrange an appointment so that we can discuss the loan in person. I look forward to a mutually profitable relationship with the Woodgrove Bank. Sincerely, Brian Groth