Requirement of Project Report for Bank Loan

Project Report in India:

A Project Report can be said as a detailed account of the business in terms and aspects of economic, technical, production, financial and managerial. It contains the analyzed information about all the required resources like power, raw material, water, manpower, machinery, capacity to manufacture, process of manufacturing, details of all the expenses related to business and production.

It is mandatory in India for a business to make a Project Report for Bank Loan. The business has to provide with all the details regarding the business project/ plan, its viability, analysis on technical basis, finances projected for the same, required funds, etc. in the report for the loan from bank or other lending institutions.

The project report making process is very important and crucial. And this task is to be done by professionals only, in order to get loan approval without any delay. Therefore, businesses are recommended and advised to prepare the Bank Loan Project Report from an Ex-banker, professional Chartered Accountant, or Financial Officer.

Project Report India

Requirement of Professional Project Report:

Since, project report is the most crucial and the basic document for analyzing the businesses future performances and for making a decision or opinion about its future, a project report is therefore, required to be made professionally for the below mentioned reasons-

  • For starting a new business or buying or taking over some other business.
  • For the value assessment of a business plan or a project.
  • For structuring the strategies or financial planning of the business or even restructuring the bank loan.
  • To make presentation for getting the participation of the investors in equity.
  • To avail the different loans such as term loan, capital loan, loan for assets and other loans from the banking institutions.
  • To dispose an existing business entity properly.

Format of Project Report for Loans from Bank:

There is a list of items that are contained by the format of the Project Report for Bank Funding. These points are-

  • Summary page of the project.
  • Details of all the promoters, their educational and professional qualifications, work experience, etc.
  • Details of the employees and the top management level, their educational and professional qualifications, work experiences, etc.
  • Details regarding the existing and the prospective customers.
  • Current status of the activities of the business, its bank statements, products and services it offers and its target customers and market.
  • Details of the deployed tools, machinery, equipment, services, infrastructure facilities and operational premises.
  • Operations at the regional level.
  • Balance sheets of the business.
  • Means of financing.
  • Statements of Fund flow and cash flow.
  • Evaluation of the Break-Even Point.
  • Statements of the profit and loss.
  • Fiscal/ financial acquisitions and tie-ups of the business.
  • Chief Ratios.
  • Conclusions

Importance of Project Report in Loan Approval:

A Project Report plays a very important role in the whole bank loan approval process. It is essential to be prepared to fulfill the needs of funding of a business by availing loans and funds from banks and financial institutions. If a business fails to prepare a proper and detailed report about its project then the consequence of the same is disapproval of the amount it wants to avail from the bank. Therefore, it is advisable to make project report with clear cut information asked by the lending institutions at the time of loan application.

Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or