Dear Manjula,
You have asked for the draft of the letter that turns down (yes, please use the phrase "turn down" and not "reject") the request for the salary advance. Nevertheless, the question that arises is why do you wish to turn down the request? What is the length of the service of the employee in your company?
Furthermore, is the employee asking for the "salary advance" or the "employee loan"? The former is given for the number of days for which the employee attended the duties in that particular month. Anyway, the employee is eligible to get the salary as per attendance, and the disbursed amount can be deducted from the employee's salary. So what is the hold-up?
If the employee has asked for the "loan", then the employee's application merits scrutiny. The genuineness of the reason mentioned in the application may be examined closely.
Please provide a complete picture of the situation. The drafts of the letters cannot be provided with incomplete understanding.
Thanks,
Dinesh Divekar