Sections a report should have
- Executive summary: the project, loan amount and purpose in one page
- Promoter profile: experience, qualifications and existing businesses
- Project description: product or service, location, capacity and market
- Project cost: land, building, machinery, pre-operative costs, working capital
- Means of finance: own contribution, term loan, working capital, subsidy
- Projected financials: profit and loss, balance sheet and cash flow for 5 to 7 years
- Key ratios: DSCR, break-even, current ratio, debt-equity
- Repayment schedule and security offered
- Assumptions and risk factors
Numbers credit teams check first
| Measure | What it shows | What banks look for |
|---|---|---|
| DSCR | Cash available to repay loans each year | Comfortably above 1, often 1.25 to 1.5 or more |
| Promoter contribution | Your own stake in the project | Usually a meaningful share of project cost |
| Break-even | Sales needed to cover costs | Achievable within the early years |
| Debt-equity | Borrowing compared with own funds | Within the lender’s policy |
Making projections believable
- Base sales on capacity, prices and realistic utilisation, not round numbers
- Match margins to your past results or industry data
- Include working capital needs for stock and receivables
- Show quotations for machinery and civil work
- Explain any jump in growth with a clear reason
Project report vs CMA data
For term loans and new projects, banks ask for a project report. For working capital limits, they usually ask for CMA data, a standard set of tables showing past and projected performance and the working capital gap. Many applications need both.
Common mistakes
- Projections that do not match past ITRs and financial statements
- Ignoring working capital, so cash runs short after launch
- Missing quotations or unclear cost estimates
- Generic templates that do not describe the actual business
Government scheme applications such as PMEGP have their own report formats. Check the scheme guidelines before preparing the report.
Frequently asked questions
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Sources
Information is for general guidance and not a substitute for professional advice. Rules, rates and due dates change; confirm with us before acting.