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Bank Projection

Final Student (Articleship Trainee) (36 Points)

17 February 2010

Dear Friends,

I need to prepare a Bank Projection to submit to a Bank. I have some basic idea about that. But it will be very much useful for me, if you give some tips to prepare.

Thanks in Advance...

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5 Replies

Pavan Daga (business) (125 Points)
Replied 17 February 2010

Hi,

Dear Friend,

When you go for an bank loan for any organisation (Propritorship / Partnership / Company) the banks normally ask for the following details:

1. Last 2 years balance sheet.

2. Next 2 financial years projections, B/s & P&L

3. Purpose for which the loan is taken

4. Profile of the business / Promoters

5. Project report for which the loan is approached for, that projects cash flow

6. Sales projections & means of funding, the banks fund only if there is any shortfall in the funds coming from Customers, or for starting up a new project. You must project the cash flow & keep in mind the DSCR ratios in the cash flow prepared.

7. The bank will be more keen on how the loan will be repaid & will look more deep in the IT returns of the past 3 years & on Guarantee.

8. Pls update your self with process of creation of Mortgage

9. If a company even forms needs to be filed with MCA.

10. When you meet the bank officer he will also give you the CMA form which has to be filled & the loan application form.

If you need more in detail, pls let me know the purpose for which you are approching for the loan from the bank.

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Final Student (Articleship Trainee) (36 Points)
Replied 17 February 2010

Thanks Pavan & Friends,

Sorry, I have not asked my question specifically. I am preparing bank projection for a CC.

My actual question is, Is there any specific rules like financial ratios, to be followed while projecting the figures.

Waiting for your reply..

BHARAT (PRACTICE) (54 Points)
Replied 18 February 2010

Dear Freind

Bank normally goes by 2nd method of Tandon and Chore committee. You have to work out CMA in such a way that there is no MPBF.( Maximum Permissible Bank Finance)

Final Student (Articleship Trainee) (36 Points)
Replied 19 February 2010

Thanks Bharatji...

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