When a business applies for a term loan or working capital from a bank, the bank officer reads one document more closely than any other: the project report. It tells the bank who you are, what you will do with the money, and how you will pay it back.
A project report is often prepared as a written document, but many business owners and CAs also present it as a PowerPoint deck for the bank meeting, because it is easier to walk through and easier to read. This guide explains what to include, the key terms in plain language, and how to present it.
Note: Every bank has its own format and checks. For a working capital loan the bank may ask for CMA data in its own layout. This guide is a general presentation guide and not financial or legal advice. Ask your bank, and your CA, for the exact requirements before you submit.
What a bank is really checking
Behind the pages, the bank is asking five questions:
- Who are the promoters? Experience, track record and credibility.
- Is the business real and viable? Product, market demand and location.
- What does the project cost, and who pays? The total cost and how much comes from you versus the bank.
- Can the business repay? Projected profit and cash flow compared with the loan instalments.
- What if things go wrong? The risks and the security offered.
A good project report answers these five questions clearly and consistently.
Sections to include
1. The people and the business
- Promoter profile. Background, qualifications, experience and net worth of each promoter or director.
- Business overview. What the company does, when it started, ownership and key customers.
2. The project
- The project in brief. What you are building or buying, and why now.
- Products and capacity. What you will produce or sell, installed capacity and expected utilisation.
- Market and demand. Who the customers are, how large the demand is and where the competition stands.
- Location and infrastructure. Site, power, water, access and approvals.
- Plant and machinery. The list of machines or assets, with suppliers and prices.
3. The money
- Cost of project. Land, building, machinery, installation, working capital margin and other costs, with a total.
- Means of finance. How the total cost will be funded: promoter’s contribution, the term loan and any other source. The total of the sources must equal the total cost.
- Loan requested and repayment schedule. Loan amount, tenure, moratorium if any and instalments.
4. The projections
- Projected sales. Year by year, usually for the full loan period, with the basis of your assumptions.
- Projected profit and loss, balance sheet and cash flow. The three statements for the same years, and consistent with each other.
- Break-even analysis. The sales level at which the business covers its costs.
- Debt service coverage ratio (DSCR). Whether cash earned each year covers the loan instalments and interest.
- Key ratios. Margins, current ratio, debt-equity and similar measures the bank tracks.
- Working capital requirement. How much day-to-day funding the business needs.
5. The close
- Employment generated. Jobs created, where relevant.
- Risks and mitigation. The main risks and what you will do about each.
- Approvals and licences. What you hold and what is pending.
- Security offered. The collateral and any guarantees.
- Declaration and contact. Signed declaration and contact person.
Key terms in plain language
- Cost of project: the total money needed to start or expand, from land to machines to initial working capital.
- Means of finance: where that money comes from. The promoter’s own contribution is often called margin money, and the rest is the bank loan.
- Moratorium: a period at the start of the loan when you pay only interest, or nothing, before the instalments begin.
- DSCR (debt service coverage ratio): cash available for debt payments divided by the debt payments due that year. A value above 1 means you earn more than you owe; banks generally want a comfortable margin above 1. Ask your bank what level it expects.
- Break-even point: the level of sales at which profit is zero. The lower it is compared with your projected sales, the safer the plan.
Tips for a convincing report
- Keep the numbers consistent. The cost of project, the loan amount and the first year of the projections must agree on every page. Mismatches are the quickest way to lose a banker’s trust.
- Make assumptions visible. State the price, volume, cost and growth assumptions behind the projections, and keep them realistic.
- Cover the full loan period. If the loan is for seven years, project seven years.
- Show the downside. A short sensitivity view, such as sales 10% lower than planned, shows the bank you have thought about risk.
- Use charts for the story and tables for the proof. Revenue, profit and DSCR trends read well as charts; keep the detailed statements as tables.
- Keep it clean and formal. A plain design with one accent colour suits a bank meeting.
Common mistakes
- Total of the means of finance does not match the cost of project.
- Optimistic sales with no basis, such as full capacity from year one.
- No view of working capital, although the business will need it.
- Promoter profile that lists titles but not experience.
- Leaving out risks. The bank will find them, so show that you have too.
A ready-made project report deck
The Bank Loan Project Report PPT template is a 25-slide deck structured the way a bank or CA expects: promoter profile, business overview, project in brief, products and capacity, market and demand, location, plant and machinery, cost of project, means of finance, loan requested and repayment schedule, projected sales, profit and loss, balance sheet and cash flow, break-even, DSCR, key ratios, working capital requirement, risks, approvals, security and declaration. Charts are linked to Excel (right-click, Edit Data), and the amounts are shown in ₹ crore. It is included in every SmartSearch pass.
For single slides, see the business plan PPT templates, data chart PPT templates and org chart PPT templates. To turn a table from Excel into a PowerPoint chart in seconds, use the free Chart Maker.
Frequently asked questions
What is a project report for a bank loan? A project report is a document that describes your business or project, the money you need, how you will use it and how you will repay it. Banks use it to decide whether to sanction a term loan or working capital.
Who prepares the project report? Usually the business owner with a chartered accountant or a consultant. The bank may ask for its own format, so confirm before you start.
How many years should the projections cover? Cover the full loan period. Many banks ask for the loan tenure plus the period needed to show repayment.
Can I present a project report as a PowerPoint? Yes, many borrowers bring a deck to the meeting and also submit the detailed written report. Ask your bank which it needs to see.
What is a good DSCR for a bank loan? It differs by bank and by industry. As a rule, a DSCR clearly above 1 shows the business can service the loan. Ask your bank which level it expects.