For availing of a business loan from the bank or financial bodies for a new start-up business, the borrower must submit a detailed project report for loan. All the necessary requirements and official documents have to be provided with the project report.  

Make sure that the Project Report is structured in such a way that it represents the idea of the whole business and can be easily understood by the lender. Further, discussed are the components of the project report required to be submitted in order to avail business loan.

Scope of the Project

The scope of the project should have below mentioned below:

  • Promoter’s details
  • Product and services  
  • Plant & Machinery /equipment
  • Market potential & strategy
  • Manpower requirements
  • Risk and mitigation strategy

Project Feasibility Ratio

Project feasibility ratio is basically deciding on the ratio of cost, discounts, and revenue of an enterprise.  

It can be presented in the form of a graph by mentioning the year-on-year comparison between revenue and expense. However, the project report should also contain the expense split-up graph.

The components of Project Feasibility Ratio are below mentioned that are required to be displayed as per year-on-year comparison:

  • Current ratio
  • Quick ratio
  • Interest coverage ratio
  • Debt equity ratio
  • Gross profit Sales Percentage
  • Net profit Sales Percentage
  • Return On Capital Employed

CMA Data

Now a days, to manage working capital requirements, business owners are moving towards banks to raise funds at lower rates instead of investing their own funds.

Banks also initiated various loan schemes for businesses that have strong financial and repayment capacity. When we approach the bank then they ask for Project Report and CMA Data of business. So that they can analyze the financial soundness of business.  

CMA Data is one of the most crucial documents required for bank loans. CMA Data is based on audited/provisional/projected financial statements of the business. There are various points we have to cover while preparing CMA data of any enterprises like accurate financial figures, comparative project figures and ratio analysis.

Documents required for preparing project report and CMA Data are as follows:

  • Income tax returns of the business and its owners
  • Last 2 years audited financial statements
  • Provisional financial statements for the year in which we are preparing CMA Data
  • Cost sheet of direct and indirect expenses
  • Notes on assumptions used by us while preparing projected financial statements

Usually, in CMA Data, we have to provide 5 years of comparative financial statements. The CMA Data must be prepared with due care, loan application approval is mainly depended on these financial figures and ratios.