Project Report Format For Bank Loan 

What is a bank loan project report

In this post, I will share Project Report Format For Bank Loan pdf with you. If you want to download Project Report Format For Bank Loan pdf, you can read this article carefully and download Project Report For Bank Loan easily by the below link.

A written document related to investment containing information or details proving the worthiness or potential of a project is known as the Project Report. It helps the entrepreneur get an exact idea about the initial inputs required for the business, providing records that allow him to avail of certain loans and funding from various banks and institutions.

The project report necessarily contains details about the business’s financial, economic, managerial, production, and technical aspects. 

This also involves in-depth information about the production, machinery, manufacturing process, manufacturing capacity, raw materials requirement, human resources, power and water, and other business-related entities. 

Download Project Report Format For Bank Loan 

PDF Name:-	Project Report Format For Bank Loan
Pages:-	7
PDF Size:-	152KB
Language:-	english
PDF Category:-	PDF
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Is it mandatory

Yes. A business must present the Project Report for Bank Loan, including a business plan, projected financials, viability study, technical analysis, etc., for availing loan or funds from the bank and other financial institutions to meet the financial requirements of the business. 

Who can make it

The task and process of making an appropriate project report are crucial. Therefore, the Project Reports for Bank loans are generally prepared by many experts like Bankers and CAs, having years of experience. 

Why clear a cut project report required?

1. For availing of working capital loans, term loan, and other loans from banks or financial institutions.
2. For making a presentation to get equity participation of the investor.
3. For structuring / re-structuring bank loan / economic and business strategies of the firm.
4. For buying, taking over, or starting a new business.
5. For making proper disposal of an existing business.
6. For assessing the value of the project or the firm.

Does the bank verify the information you have provided

Of course! The bank verifies the financial details and other information presented in the project report before issuing the loan to the business. Therefore, it is advised to prepare a neat project report for a bank loan with all necessary details regarding the financial projects of the company. 

What if your project report gets disapproved?

Suppose the submitted project report for the bank loan anyhow gets disapproved by the bank. In that case, the business firm applying for the loan may prepare another project report and reapply or may use the project report for any other bank or financial institution. 

standard format for preparing Project Report for Bank Loan

1. Introductory Page
2. Summary of the project
3. Details about the Promoters, their educational qualifications, work experience, etc.
4. Current Status of the Bank, its products and services, target market, and activities.
5. Employees, details about the top management, their educational qualifications, work experience, etc.
6. Infrastructure facilities, tools deployed, operational premises, machinery, etc.
7. Customers, details about them as well as prospective customers
8. Regional Operations
9. Fiscal acquisitions and tie-ups
10. Means of Financing
11. Balance Sheet
12. Profit and Loss Statements
13. Fund Flow Statement
14. Chief Ratios
15. Break-Even Point Evaluations
16. Conclusions

In finance, a loan is money lent from one individual, organization, or entity to another individual, organization, or entity. A loan is a debt provided by an entity (organization or individual) to another entity at an interest rate and evidenced by a promissory note which specifies, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and date of repayment. A loan entails the reallocation of the subject asset(s) for some time between the lender and the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender and is obligated to pay back or repay an equal amount of money to the lender later.

The loan is generally provided at a cost, referred to as interest on the debt, which incentivizes the lender to engage in the loan.

In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional conditions known as loan covenants. Although this article focuses on monetary loans, any material object might be lent in practice.

Acting as a provider of loans is one of the principal tasks for financial institutions such as banks and credit card companies. For other institutions, issuing debt contracts such as bonds is a typical funding source.

Types

Secure

A secured loan is when the borrower pledges some asset (e.g., a car or property) as collateral. A mortgage loan is a prevalent type of loan used by many individuals to purchase things. In this arrangement, the money is used to buy the property. However, the financial institution is given security – a lien on the title to the house – until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the home and sell it to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the vehicle, much like a mortgage is secured by housing. The duration of the loan period is considerably shorter – often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. 

A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.

Unsecured loans are monetary loans that are not secured against the borrower’s assets. These may be available from financial institutions under many different guises or marketing packages:

• credit card debt
• personal loans
• bank overdrafts
• credit facilities or lines of credit
• corporate bonds (may be secured or unsecured)
• peer-to-peer lending

The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974.

Interest rates on unsecured loans are nearly always higher than for secured loans because an unsecured lender’s options for recourse against the borrower in default are severely limited. 

An unsecured lender must sue the borrower, obtain a money judgment for breach of contract, and then pursue execution of the judgment against the borrower’s unencumbered assets (the ones not already pledged to secured lenders). 

In insolvency proceedings, secured lenders traditionally have priority over unsecured lenders when a court divides up the borrower’s assets. 

Thus, a higher interest rate reflects the additional risk that the debt may be uncollectible in the event of insolvency.

Features of Bank Loans 

1. It is a short-term source of finance.
2. Depending on the circumstances, a bank loan may be either secured or unsecured.
3. The interest charged by the bank on such a loan may be either fixed or variable.
4. If the mortgage loan is to be obtained, the borrower must pay several fees such as title searching fees, application fees, inspection fees, etc.

Advantages of Bank Loans

1. They can be easily procured.
2. They can be used for short-term as well as medium-term financing.
3. Interest paid on a bank loan is a tax-deductible expenditure.

Disadvantages of Bank Loans

1. Some bank loans carry a prepayment penalty.
2. We are borrowing too much as a bank loan can decrease cash flow.
3. In most cases, the bank does not disburse the whole loan amount; it pays cash lower than the loan demand.

Sources of Bank Loans

A bank loan is an amount of money borrowed for a set period within an agreed repayment schedule. The repayment amount will depend on the size and duration of the loan and the rate of interest.

Many businesses use bank loans as a suitable part of their financial structure. Bank loans tend to be more available for well-established and growing firms than start-up businesses.

The reason for this is the risk – banks prefer to loan to businesses with an established track record of profitability, which makes them more likely to be able to repay the loan and interest.

If a bank loan can be obtained, then there are several advantages for a growing business:

• The business is guaranteed the money for a certain period – generally three to ten years (unless it breaches the loan conditions)
• Loans can be matched to the lifetime of the equipment or other assets the loan is for
• While interest must be paid on the loan, there is no need to provide the bank with a share in the business.
• Interest rates may be fixed for the term, making it easier to forecast interest payments.
• The main disadvantage of a bank loan is the security that usually has to be given to the bank over the business’s assets. 

The bank becomes a secured creditor with collateral over the business assets. If the business fails, the bank has the first call on what is left (before the shareholders).

Conclusion

Thus, a Project Report for Bank Loan is necessary for availing funds and loans from financial institutions and banks for the needs of business funding. 

It is mandatory for the said purpose and must be prepared based on the format explained above.  Failure in presenting a clear-cut project report may result in disapproval by the bank, and then you have to reapply or reconsider the information entitled in words. 

Now you can download Project Report Format For Bank Loan pdf by clicking the above link. So, if you have any doubts or any questions regarding the preparation of the project report for the bank loan, then contact us through the comments anytime.