Project Report for Bank Loan:
Finance is known as lifeblood of every business rotation of which results in moving all activities of the business. The financial requirement of any business can be met either by infusion of funds by its promoter / others or internal generation of funds or through bank loan.
Nowadays, almost all the business avail bank loan for meeting their various businesses funding requirement. The bank loan / assistance may be in form of long term assistance like term loan or short term assistance like working capital, derivatives etc. However, it is not easy to avail bank loan as the business has to submit details project report for bank loan including business plan, projected financials, viability study, technical analysis etc. Normally these project reports are been prepared by various experts like CAs, Bankers so as to provide appropriate presentation to bankers.
Requirement of project report / business Plan:
- To avail term loan, working capital loan other loan from bank or financial institution.
- To make presentation to investor for equity participation.
- To structure / re-structure bank loan / business strategies.
- To buy /start a new business.
- To dispose of an existing business.
- To assess the value of the project / business.
Major factor to be considered while making a project report:
- Business Standing.
- Competitor Environments
- Industry / Market Outlook.
- Government Policies, rules, regulations etc.
- Financial Standing of the Business.
- Technological Changes / Up gradations.
Major Components of a project report:
- Brief History of the business
- Promoters details, their experience, qualification, achievements etc.
- Management evaluation
- Existing banking relationship along with tract record.
- Current Standing of the business with its strengths.
- Details about the project / funding requirements.
- Business details like production process, key arrangement, availability of infrastructure, concentration risk, competitor standing, environmental aspects, key approvals etc.
- SWOT Analysis
- Market / Industry Outlook.
- Analysis of previous financial performance of the business along with reasons / justifications for variation, if any.
- Write-up on current performance of the business.
- Projected Financials of the business for five years or till the repayment of term loan which may include the followings :
- Projected Profit & Loss Account.
- Projected Balance Sheet.
- Projected Cash Flow Statement.
- Projected Fund Flow Statement.
- Analysis of various ratios.
- Analysis of projected ratios.
- Means of Finance / Requirements of working capital funds :
- From Promoters
- From Others
- From Bank / Financial Institutions.
- Justification for requirement of funds and reasonability of ratios projected.