Project Report for Bank Loan

Updated on April 9, 2024, 7:19 p.m.

Learn all about a project report and how it is prepared. Project report is financial viability report of a business to avail financial assistance from a financial institution.

Project Report is a must have document for availing any type of business loan. Whether you are applying for a term loan, or a working capital loan for your business, you need to have a project report with financial projections.

Even if you are applying under a government scheme (Mudra or PMCGS), you need to prepare a project report.

Any business without adequate financing will not survive or grow at a faster rate. You may have introduced your own savings into the business but at some point of time, you may need to avail financing from external sources. Any external source will check business viability before funding your business.

Project Report for Bank Loan

Project Report is a document with estimates and projection of financial performance of a business.

This document list down the estimated operation results in financial terms. Project report consist of various components, however the vital part is financial performance.

A report consist of:

  • Financial estimates
  • Technical know how
  • Business opportunities
  • Promoter background
  • Details of overall business environment
  • Economical and governing challenges and opportunities

However, for small size loan up to 5 crores, a financial projection report is considered sufficient.

A Financial Project report has various components. Here are the major components of a project report:

  • Profit and Loss statement
  • Balance sheet
  • Cash Flow statement
  • Borrowing statement
  • Depreciation Calculation
  • Various ratios

Projected Profit and Loss Statement

Projected Profit and Loss Statement is the document showing future outcome of business operations. It is prepared to estimate future profit and loss from business.

It shows revenue and expenditure from business. This is most important part of report, as all other part of report depends on profit and loss statement.

Projected Balance Sheet

Projected Balance Sheet depicts the financial position of business as on a future date. This document shows the financial position of business over a period of time.

One has to arrive and support with explanation various numbers such as Debtors, Creditors, loan balance and Fixed Assets.

Cash Flow Statement

Cash Flow statement shows the source of funds and application of funds. It shows the cash generated from business operations and financing and where this money is being spent.

Sources of cash inflow can be profit from operation, capital by promoters, loan from bank. Cash outflow is by investment in assets and change in working capital.

Other statements and ratios

Apart from Profit and Loss statement, Balance Sheet and cash flow statement a project report also comprise of Fixed Asset Register, Loan statement and ratios.

Report should present below ratios at least:

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