This letter offers to replace or repair an item that you borrowed and then lost or broke.
1234, Main Street
Boston, MA 02123
07 April, 2005
<Recipient Address Goes Here>
I am so embarrassed, but I have to tell you that I <lost/broke> the <item borrowed> you lent to me. You have always been so nice about letting me borrow tools and I feel just awful about this. Please allow me to replace the <item borrowed>. If you tell me where you got it, I'll gladly purchase a new one. Or, if you prefer, let me know how much I owe you and you can pick out your own.
Again, I am terribly sorry about this and regret any inconvenience this might cause you. Please let me know how you wish me to proceed.
encl: <List of enclosed items goes here>