Beruflich Dokumente
Kultur Dokumente
This is certify that Miss Ketki Telore student of Huzurpaga Mahila Vanijya Mahavidyalaya completed her project on A STUDY ON DOCUMENTATION IN THE LOAN PROPOSAL PROCESS FOR BUSINESS UNITS for the partial fulfillment of the B.B.A Part-III course of the University of Pune for the Academic Year 2010-2011 as per the concerned firms requirements.
AKNOWLEDGEMENT
Every project report is blend of students hard work and the guidance received by the student from the seniors experience. I am student of BBA being a student of professional course for the practical purpose. I am supposed to submit report for the purpose. At the outset, I would like to express my sincere gratitude for the assistant and support of all those who helped me to carry out this project successfully. Firstly, I am very great full to Mrs. Neha Puranik (Project guide) her technical guidance and suggestion which she provided at various stages throughout the project. I would like to thank my classmates who helped me in all possible ways to complete in all possible ways to complete this mountainous work. I am sure that this project will serve the purpose.
DECLARATION
This is to declare that this project report entitled A study on documentation in the Loan Proposal process for Business Units is a record of genuine work done by Miss.Ketki Telore under the supervision of institutes project guide Prof. Neha Puranik in partial fulfillment of the requirements for BBA of University of Pune. I declare that this project is a fare project and not submitted to any University before.
INDEX
Sr. no.
1
Names Of Chapters
Introduction to Loan Proposal
Page no.
5-34
2 3 4
Objectives & Purpose Bank Profile & Company Profile Projected Statements
5 6
62-63 64
Conclusion
65-66
LOAN PROPOSAL
Loan proposals are formal, written documents that small businesses must prepare when they approach potential lenders or investors for funding. A complete loan proposal package should consist of completed loan application forms (if required), and a comprehensive business plan with complete financial statements. Ideally, the loan proposal should present information about the small business, its future prospects, and its financing needs in a straightforward manner. All the pertinent information the lender or investor might need in making a decision should be provided in a logical format. Loan proposals must be thorough yet concise, convincing yet honest. The aim is to answer all the questions that a lender or investor is likely to ask without overstating the facts and figures. Preparing a solid loan proposal can be very time consuming, but it has proven to be the best way for a small business owner to demonstrate his or her understanding of the business and its financial demands to potential lenders and investors. Furthermore, the business plan portion of the loan proposal can serve as a sort of handbook for running the business. It presents criteria against which management's strategy and decisions can be continually evaluated. Overall, a formal loan proposal should illustrate why the small business is a good credit risk by placing it within the context of its market and competition, explaining any peaks and valleys in cash flow, and emphasizing the strengths of the management team.
favorable decision. For example, the small business owner could attach business licenses, copies of the partnership agreement or articles of incorporation, copies of tax returns, lease information if renting facilities, and information on insurance coverage.
the proposal. It is intended to improve the lender's understanding of the business and the loan request, so that he or she will be able to defend the proposal before other decision makers. At the conclusion of the meeting, the small business owner should ask when a decision might be expected. It is also important for the small business owner to be available during that time period to answer any follow-up questions.
10
Liquidity:
The term liquidity implies the ability to produce cash on demand. A bank mainly utilizes its deposits for the purpose of granting advances. These deposits are repayable on demand or on the expiry of a specified period. In either case, the banker must be ready to meet these liabilities whenever necessary. As such, he has many outstanding contracts for future delivery of money. The banker should always bear in mind that he is the guardian of a very delicate mechanism which paves the way for future economic development and which, if disturbed will create monetary disequilibrium with all the incidental evil effects. Herein lays the importance of ensuring that the advances granted by the baker are as liquid as possible.
Profitability:
Banks are essentially commercial ventures. It is true that excessive and unjustifiable profits can only be at the cost of the customer, in so far as higher lending rates push up production costs, and in the ultimate analysis, adversely affect society in general. The strong operating profits allow for full prudential provisioning. High net profits allow for allocation to capita; and reserves, which is essential for any bank to maintain its competitive viability and expand its lending operations. The shareholders of a bank are entitled to reasonable dividends.
11
Purpose:
The banker has to carefully examine the purpose for which the advance has been applied for. In case the advance is intended to be utilized for productive purposes, it could be reasonably anticipated that cash flows arising from productive activities will result in prompt repayment. The banker has to be careful to monitor the exact purpose for which the advance is actually utilized. There is always the possibility that the advances, once granted, may be diverted for purposes other than that indicated by the borrower at the time of application. Thus, there should be proper provisions for effective post credit supervision.
Social responsibility:
While admitting that banks are essentially commercial ventures, a bank should not forgot the fact that is not enough that only people of means are given bank finance. Through productive efforts bank finance should make people creditworthy, and turn them into people of means. Technical competence of the borrower, operational flexibility and economic viability of the project, rather than the security which the borrower can offer, should be considered in evaluating a loan proposal.
12
13
Cash Credit
With many of the advantages of a standard line of credit, cash credit is the issuance of a short term cash loan to a business. A cash loan of this type if often utilized to meet the expenses associated with a specific task or project, with repayment expected within a period of one year or less. Successfully receiving cash credit and paying off the loan within terms can open the way for the business to be extended a more liberal line of credit for future use. Cash credit works in a manner that is very similar to that of a line of credit. The difference is that cash credit establishes a cash account with the lender institution that can be drawn upon by the debtor. This is different from a conventional loan, in that the debtor does not have to receive the entire amount of the loan at one time. Cash credit is also different from a line of credit, as the amount of resources extended are pre-approved and the repayment schedule is the same whether the debtor is actively using the cash credit or not.
Overdraft Financing
Overdraft financing is provided when businesses make payments from their business current account exceeding the available cash balance. An overdraft facility enables businesses to obtain shortterm funding - although in theory the amount loaned is repayable on demand by the bank. There are several important factors to consider when assessing the appropriateness of an overdraft as a source of funding for SME's: - The amount borrowed should not exceed the agreed limit ("facility").The amount of the facility made available is a matter for negotiation with the bank; - Interest is charged on the amount overdrawn - at a rate that is above the Bank Base Rate. The overdraft financing
14
Overdraft financing is provided when businesses make payments from their business current account exceeding the available cash balance. An overdraft facility enables businesses to obtain shortterm funding - although in theory the amount loaned is repayable on demand by the bank. There are several important factors to consider when assessing the appropriateness of an overdraft as a source of funding for SME's: - The amount borrowed should not exceed the agreed limit ("facility"). The amount of the facility made available is a matter for negotiation with the bank; - Interest is charged on the amount overdrawn - at a rate that is above the Bank Base Rate. The bank may also charge an overdraft facility fee; - Overdrafts are generally meant to cover short-term financing requirements - they are not generally meant to provide a permanent source of finance - Depending on the size of the overdraft facility, the bank may require the SME to provide some security - for example by securing the overdraft against tangible fixed assets, or against personal guarantees provided by the directors The amount of an overdraft at any one time will depend on the cash flows of the business, the timing of receipts and payments, seasonal trends in the sales and so on. This can be illustrated using the data below. In the example cash flow statement given below, the SME generates a positive overall cash flow in a full year. Bank may also charge an overdraft facility fee; - Overdrafts are generally meant to cover short-term financing requirements - they are not generally meant to provide a permanent source of finance - Depending on the size of the overdraft facility, the bank may require the SME to provide some security - for example by
15
securing the overdraft against tangible fixed assets, or against personal guarantees provided by the directors The amount of an overdraft at any one time will depend on the cash flows of the business, the timing of receipts and payments, seasonal trends in the sales and so on. This can be illustrated using the data below. In the example cash flow statement given below, the SME generates a positive overall cash flow in a full year.
Fund Flow
Fund Flow Statements summarize a firms inflow and outflow of funds. Simply put, it tells investors where funds have come from and where funds have gone. The statements are often used to determine whether companies efficiently source and utilize funds available to them.
16
17
Cash credit:
Banks in India favor the granting of loans in the form of cash credit. It is estimated that out of the total bank credit, this method accounts for more than 50%. Under this method, the banker allows the customer to borrow up to a certain amount known as the Cash Credit Limit. Usually the borrower is required to provide security in the form of pledge or hypothecation of tangible securities. In some cases, the limit is granted on the guarantees furnished by sureties acceptable to the bankers. It may be noted that it is not necessary for the borrower to avail of the full cash credit limit in one installment.
Overdrafts
This method of granting advances resembles the cash credit system. However, to avail off an overdraft facility; the borrower has to open a current account. This account is allowed to be overdrawn up to a certain limit. As in the case of cash credit, the borrower has to pay interest only on the amount actually overdrawn and only for the period during which it is utilized.
according to whom the earning assets of a commercial bank should consist mainly of short-term self liquidating productive loans.
Loans
The term loan is popularly used to denote the granting of an advance in lump sum, generally on the basis of securities acceptable to the bankers. The distinguishing feature of a loan is that interest on it is payable on the entire amount, whether it is fully utilized or not it is granted for a definite period and the borrower is given the facilities to repay it in one lump sum or in installments . As far as a banker is concerned, the operating cost of a loan is lower as compared to a cash credit or an overdraft. This method of granting an advance has the advantage of strengthening the financial discipline in the use of bank credit. follow up , supervise and control of end use of bank credit could be made more effective in the case of loans as compared to cash credits and overdrafts .
19
Bankers Lien:
A bankers lien is a general lien which confers a right to a retain properties in respect of any general balance due by debtors to the bankers. Bankers have a general lien on all securities deposited with them in their capacity as bankers by a customer, unless there is an express contract or circumstances that show an implied contract inconsistent with the lien .Bankers right of sale extend only to fully negotiable securities. As far as such securities are concerned the bankers may exercise his right of sale after serving reasonable notice to the customer.
Pledge:
A Pledge is a contract where by an article is deposited with a lender as a promise or security for the repayment of a loan or performance of a promise. To complete a contract of pledge, delivery of the goods to the banker is necessary. Delivery of the title documents relating to the goods, or the keys of the godown where the goods are stored, may be sufficient to create a valid pledge, strictly speaking where no possession is given, it is known as hypothecation and is elaborated in the next section.
Mortgage:
Section 58 of the Transfer of Property Act defines a Mortgage thus A mortgage is the transfers of an interest in a specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to pecuniary liability . In terms of above definition, the initials of mortgage are as follows. 1. There must be a transfer of interest in an immovable property.
20
2. The immovable property must be a specific one. 3. The consideration of a mortgage may be either money advanced or to be advanced by way of loan or the performance of a contract.
21
Employment of Fund
Before dealing with the different forms in which the bankers funds are employed profitably, it will not be out of place to consider the purposes for which banks keep their reserves and the considerations governing the size of reserves. The term Finance simply put is perceived as equivalent to Money. In Economics we read about money & Banking, about Monetary Theory &Practice and about Public Finance. But finance exactly is not money; it is the source of providing funds for a particular activity. The banking sector which forms the bedrock of the Indian financial system falls under the regulatory ambit of the Reserve Bank of India under the provisions of the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934. The Reserve Bank also regulates select AIFIs. Consequent upon amendment to the Reserve Bank of India (Amendment) Act in 1997, a comprehensive regulatory framework in respect of NBFCs was put in place in January 1997. The financial market in India comprises the money market, the Government securities market, the foreign exchange market and the capital market. A holistic approach has been adopted in India towards designing and development of a modern, robust, efficient, secure and integrated payment and settlement system. The Reserve Bank set up the Institute for Development and Research in Banking Technology (IDRBT) in 1996, which is an autonomous center for technology capacity building for banks and providing core IT service.
22
23
6. Nature of advances and amount of bills discounted: -The reserve a bank should keep is also
affected by the consideration of the amount of money invested by him in the discount of commercial paper.
years are studied, it would give a trend as to the progress made by the company not only financially but also in other aspects. This would, therefore, enable the banker to form a judgment not only in regard to the way in which a company or business in managed. 2. The banker must see to it that the balance- sheets which are studied are for full period of 12 months. Otherwise, if a balance- sheet is for six months only and other balancesheets are for different periods, it would not be possible for a banker to compare the financial position. The comparison of balance-sheets will give an idea of a trend in financial affairs over a period of time. 3. The banker must see to it that the balance- sheet is certified as true and is duly signed by the auditors of the company. 4. It is not sufficient to study only the balance- sheet of a company. It would only give a partial picture of the affairs of the company. A balance- sheet, therefore, has to be studied not in isolation but in relation to other financial statements such as profit and loss account, trading account, income and expenditure account, etc. this would enable the banker to compare the figure which are relevant in arriving at a decision in considering a proposal for an advance. The next question which arises is what a banker should look for in a balance-sheet. The banker should look at a balance-sheet only from one angle & that is from the view point of the leading bank. As a leading banker, he is interested in seeing to it that the money which is advanced comes back.
26
27
The study of these ratios will enable the banker to decide whether the proposal for an advance should be consider on merit or not if other factors are otherwise favorable. There are many more ratios but they are not of much importance to a banker.
28
Nature of business:In first place the banker should ascertain the nature of the trade or business retail, wholesale or manufacturing- of the applicant for loan. This is necessary in order to consider the various items of the statement.
Differentiation of liquid and other assets:Thirdly, the statements should differentiate between the assets, which are of a liquid nature and those which are more or less fixed.
29
Liquid assets to be sufficient to meet short-term liabilities: Fourthly, in examining a statement, the banker must
see whether or not they would be borrower can meet his current or short-term liabilities with the help of his quick or liquid assets. It is necessary to do so, because the continuation of the business may depend largely upon meeting the short-term liabilities as they mature.
Difference in the book value and realization value of assets:-Fifthly, it must be borne in mind that the value of the
assets given in the statement is ordinarily expressed to show their worth to the trader for use in a going concern. The banker should remember that normally they will fetch much less in case of a good sale.
30
Stock in trade:As regarded the stock, it may not be feasible always to get inventory made and its value estimated by an independent and reliable value, and therefore, the bank may generally have to rely upon the borrowers valuation.
Stock exchange securities:As regards the stock exchange securities held by the applicant for loan, the banker should try to find out the object with which they are carried as an asset. If the borrower has invested in securities, funds which he cannot profitable use in his own business, his credit position is strengthened, but on the other hand, if securities happen to be of a speculative nature, the banker should regard them with some suspicion.
Fixed assets: -In case of fixed assets the banker should ascertain
whether the land and buildings owned by the borrower are not to subject to any incidental charges such as rates, taxes, etc.
Sundry assets:There may be certain sundry assets such as leasehold, goodwill, patents, trademarks, etc., whose values should generally be ignored by the banker, as, in the case of liquidation of the business, they are not likely to fetch any prices.
31
Intangible and fictitious assets:Intangible assets are those assets which carry some value to the concern (but are not tangible) like goodwill, patents, copyrights, Trademarks etc. Although in strict commercial terms these items are valuable, for analytical purposes, the bank should not attach any value to these items, as already stated.
Liabilities:On the liabilities side the banker should first see whether the capital is large enough for the nature and turnover of the business. If the capital is inadequate the business will be hampered. As already stated, it is ordinarily not the function of a bank to supply fixed capital to an industry because commercial banks as far as possible keep their assets in a liquid form. When the concern applying for a loan is banking only with one banker, the amount and the terms of the credit facilities enjoyed by it will be known to him.
Profit & Loss account:The banker should examine the profit & loss account statements as they will show, whether or not, the business is a paying one. The banker should not only satisfy himself that all the expenses, chargeable to the profit & loss account, have been deducted before arriving at the figures of net profits, but also that sufficient amounts have been set aside for depreciation of certain assets, which need replacement after the expiry of certain periods and for payment of income-tax, etc. He has to see that profit shown is real & not fictitious. The profit & loss account is important statement as it shows the income & expenditure of a concern during the year.
32
Term Loans
Where a loan is granted for a fixed period exceeding one year and is repayable according to the schedule of repayment, it is known as term loan or term finance. The period of term loan may extend up to 10 years and in some cases even more than 10 years. Where the period exceeds one year but not, say 5 to 7 years, it is commonly known as a medium-term loan.
33
Working Capital requirement:Working capital is the capital requirement for day-to-day requirements of the firm. This is also called changing or circulating capital. The working capital is required for maintenance of inventories, for extending credit to customers and for maintaining a cash balance. The total requirement is met partly by the credit that the suppliers of goods and services extend to the firm. The remaining part is to be provided by the firm out of its own internal sources or short-term borrowings from banks.
Measurement or assessment of working capital:There are following methods for measuring or assessing the working capital of the concern: I. II. Net working capital Operating or working capital cycle.
Sources of working capital:The working capital required by a concern can be financed from internal as well as external sources. The various sources of working capital are: i. ii. iii. Net gain from operations. Sale of fixed assets Bank borrowing
34
35
The objectives of the project can be stated as follows: 1) To understand the documents required to be submitted for pressing the loan. 2) To find out the procedure to acquire the bank loan. 3) To determine the requirements of finance. 4) To determine the working of bank 5) To have a comparative study of the loan schemes and the interest rate offers. 6) To learn installment patterns of loan repayment. 7) To learn types of loans.
36
COMPANY PROFILE
37
Company Profile
38
Location
The proposed project is located in Magarpatta, Hadapsar which is little far from human migration and close to other industries. Because this industry produces large amount of sound which is harmful for human and beneficial for us for transportation of good this is important part of this industry. It also helps to reduce the cost of transportation and takes less time to deliver the goods.
Manufacturing Process
Material is been purchased as per the given information. After the material is been purchase it is tested and cutting of material is done by the given size. Job phasing is done as per the drawing and sharp edge is been drabber.
Procedure
First operation is that the rough surface is been drabber at the size of (8mm). Cross drabber of job is done at (17mm). At this stage, the drilling of job is been finished slitting of job is done on milling machine as per the sketch all over the champing of the job is done and after all this procedure the last operation is inspection of job is done.
39
BANK PROFILE
40
Cosmos Bank
Now its in your Cosmos Interest to get a Loan, because Cosmos Loans are now available at reduce interest rates w.e.f 1st August 2009. Cosmos SME : 12.5% and Cosmos Education: 10%. loan transfer/takeover at reduced rate of interest possible. Banking and a lot more only at The Cosmos Co-op Bank Ltd.
Establishment in 1906, The Cosmos Co-operative Bank Ltd (Cosmos Bank) is one of the oldest urban co-operative banks in the country, reputed for its quality services. Today, the Cosmos Bank is one of the leading Multi-state Scheduled Co-operative Banks. The bank has carved a niche in the urban banking sector with its rich heritage, integrity, adherence to the prudent banking practices, technology savvy customer services. Cosmos bank has attained multi-faceted growth not only in terms of financial indicators/standards but also in overall expansion of activities. Established in 1906, the Cosmos Co-operative Bank Ltd. is the second oldest bank in the country. The Bank has recently completed glorious 105 years of service successfully. It has attained multi state scheduled status in 1997. The Bank is a professionally managed 'Financial Institution', a benchmark of
41
credibility and innovation. Bank has nurtured its traditional values in business practices and in serving the small customers. At the same time it has adopted new technologies and advanced banking tools to add value to its services. Cosmos Bank has carved a niche in the banking sector due to its rich heritage, integrity, adherence to prudent banking practices, technology advancement, customized products and services and most of all due to its experienced, qualified and professional Board of Directors. Setup Financial & Geographical Financial setup of the bank as on 31.03.2010 was Rs.11835 crore, comprising of Deposits of Rs.7213 crore and Advances Rs.4622 crore. Cosmos Bank operates through 104 branches and 9 Extension Counters in India spread across 5 States and in 28 Major Cities, which are as follows: Mumbai, Pune, Nagpur, Aurangabad, Nashik, Baramati, Jalna, Kolhapur, Satara, Phaltan, Sangli, Solapur, Bhusawal, Jalgaon. Madhya Pradesh Indore. Andhra Pradesh: Hyderabad, Vijaywada Banglore. Belgaum, Nipani. Karnataka : Surat, Ahmedabad, Baroda, Ankaleshwar, Gujarat: Rajkot, Bhuj, Gandhidham, Bhavnagar Maharashtra : Social Obligations Cosmos Foundation is a public charitable trust founded under the initiative of shareholders of Cosmos Co-op Bank on 16.10.1987. The registered office of the foundation is at 269/270, Shaniwar Peth, Pune-30. The main objectives of the foundation are 1. To give loans to Cosmos Bank members at concessional rates for pursuing higher education abroad. 2. To give medical help to members upto specified limits.
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3. To felicitate the awards of members who excel in Std. X & XII examinations. 4. To promote educational spirit and to maintain, support, propagate intellectual qualities educational facilities, etc. 5. To arrange educational seminars, conferences, etc. 6. To grant relief in the event of natural calamities such as earthquakes, floods, famine, 7. The Foundation also provides outsourcing facility 8. Special arrangement as Executor & Trustee for preparation & execution of Will especially for the Senior Citizens. Future Plans 1. Internet Banking 2. Utility Terminal
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Step Two- Verification of Facts: Verification of the income, liabilities and assets information provided by the borrower. These are almost always verified in detail, through employers, banks, credit bureaus and other third parties. Step Three-preparation of the Loan Package: A checklist of business loan documents is sent to the borrower. Step Four-Evaluation and Underwriting: The business loan documents package is verified for accuracy and honesty. Once the verifications are assembled the loan package is submitted to formal underwriting. This may be done electronically through automated underwriting systems, but even when a customers business loan is approved in this manner, an underwriter reviews the entire file and provides a final clearance for funding. The underwriter is usually not the originating loan officer.
44
Step Five- Condition, Letter of Intent (LOI) and Commitment: Most loans are approved with some type of conditions, often a requirement to provide further or updated verifications. Here the borrower may be involved again to assist in collecting copies of documents needed to finish the file. A Letter Of Intent or LOI is a document outlining an agreement between two or more parties before the agreement is finalized. LOIs resembles written contracts but are usually not binding on the parties in their entirely. Many LOI, however, contain provisions that are binding, such as nondisclosure agreements, a covenant to negotiate in good faith, or a stand-still or no-shop provision promising exclusive rights to negotiate. A Commitment Letter is formal offer by a lender making explicit the terms under which it agrees to lend money to lend money to a borrower over a certain period of time. It is also known as a standby loan commitment or commitment letter or firm commitment lending also called Loan Commitment. When this step is cleared, parties are ready to close the transaction.
Step Six-Closing: Processing times vary greatly. An important consideration for a borrower wishing to complete processing quickly and agreeably is to be very responsive to the loan officer and his processors when they call for required documents or actions. Business Loan will usually not close without complete compliance with these requests.
45
Objectives of the Scheme: The scheme aims at providing financing support for the working capital needs of the small entrepreneurs loans up to 25 Lacs.
Eligibility Criteria: The applicant should be regular member or nominal member of the Bank. Applicant should have banking relation with bank. The applicant shall be engaged with trading/industrial/service activity with valid Licenses.
Type of Facility: Operative Overdraft facility with cheque book. Margin: 25% of the marketable Security value in banks favour (limit will be 75%).
Security (Prime): In the form of immovable constructed property in Corporation limits: if the outside Corporation Limit-TP Plan and Collector NA is required. The property shall be self occupied. Any other assignable security such as NSC, LIC, Shares, FDRs etc in support of the above condition.
46
If the shares are offered as security, the maximum limit will be restricted to Rs. 20 Lacs. Security (Collateral): Stock & Debtors will be collateral security, only initial stock/debtors statement will have to be submitted. Period: On demand or 3 years, Renewal with necessary documents.
Rate of Interest: At present @13% p.a. Interest Rates are subject to change from time to time. Processing fee: @0.10% of the Loan Demand.
47
PROJECTED STATEMENTS
48
Projected Statements
- Bank Repayment Statement - Projected Income Statement -Projected Balance Sheet -Cash Flow Statement
49
Principle Repaid
15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Interest
Installment
April May June July August September October November December January February March
9750 9588 9425 9263 9100 8938 8775 8613 8450 8288 8125 7963
24750 24588 24425 24263 24100 23938 23775 23613 23450 23288 23125 22963
Total
180000
1066278
286278
50
Principle Repaid
15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Interest
Installment
April May June July August September October November December January February March
7800 7638 7475 7313 7150 6988 6825 6663 6500 6338 6175 6013
22800 22638 22475 22313 22150 21988 21825 21663 21500 21338 21175 21013
Total
180000
82878
262878
51
Principle Repaid
15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Interest
Installment
April May June July August September October November December January February March
5850 5688 5525 5363 5200 5038 4875 4713 4550 4388 4225 4063
20850 20688 20525 20363 20200 20038 19875 19713 19550 19388 19225 19063
Total
180000
59478
239478
52
Principle Repaid
15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Interest
Installment
April May June July August September October November December January February March
3900 3738 3575 3413 3250 3088 2925 2763 2600 2438 2275 2113
18900 18738 18575 18413 18250 18088 17925 17763 17600 17438 17275 17113
Total
180000
36078
216078
53
Principle Repaid
15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Interest
Installment
April May June July August September October November December January February March
1950 1788 1625 1463 1300 1138 975 813 650 488 325 163
16950 16788 16625 16463 16300 16138 15975 15813 15650 15488 15325 15163
Total
180000
12678
192678
54
Less: Expenses Salary Rent Insurance Electricity bill Telephone bill Stationary Miscellaneous Maintenance Depreciation on F.A. Interest on Term Loan Net Profit before Tax @30% Tax 210000 60000 20000 38500 10000 3500 2000 50000 83350 106278 225000 62000 20000 40000 10000 3500 2000 51000 83350 82878 300000 65000 20000 42000 8000 3000 2200 48000 83350 59478 310000 68000 21000 43000 8500 3000 2000 48500 83350 38078 315000 70000 21000 43500 8800 2800 2000 49000 83350 12678
316372 94912
645272 193582
812972 243892
976572 292972
1281872 384562
221460
451690
55
569080
683600
897310
1532230 2125830 2923140 540000 180000 360000 360000 180000 180000 180000 -NIL
1381460 1583150
Assets: Fixed Assets Less: 10% Depreciation 833500 83350 750150 Deposit Cash Balance 63000 568310 750150 83350 666800 63000 853350 666800 83350 583450 63000 583450 83350 500100 63000 500100 83350 416750 63000
1381460 1583150
56
2011-12
2012-13
2013-14 2014-15
2015-16
2610000 -1890000
180000 106278 94912 210000 60000 20000 38500 10000 3500 2000 50000 833500 60000 63000 568310
180000 82878 193582 225000 62000 20000 40000 10000 3500 2000 51000 -70000
180000 59478 243892 300000 65000 20000 42000 8000 3000 2200 48000 -80000
180000 36078 292972 310000 68000 21000 43000 8500 3000 2000 48500 -90000
180000 12678 384562 315000 70000 21000 43500 8800 2800 2000 49000 -100000
Interest on Loan Income tax Salary Rent Insurance Electricity bill Telephone bill Stationary Miscellaneous Maintenance Purchase of Fixed Assets Drawing Deposit Cash Balance
853350
57
1245780 1742730
2443390
58
RATIO ANALYSIS
59
Ratio Analysis
Particular
2011-12
2012-13
2013-14
2014-15
2015-16
1225000 1444000 1600000 1890000 3500000 3800000 4000000 4500000 35% 38% 40% 42%
Sales
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2011-12 2012-13 2013-14 2014-15 2015-16 Series 1
60
Particular
2011-12
2012-13
221460
451690
569080
683600
897310
3000000
7.38
12.9
14.97
17.09
21.36
61
BIBLIOGRAPHY
62
63
LOAN FORM
64
CONCLUSION
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Conclusion
1) I can conclude that applying for bank loan is very lengthy and tiring procedure that should be done by Banks electronically. 2) However, it is a very risky matter but commerce will not only save time but also help to maintain the document in a good condition something that I can learn from this project is that it is not very simple to pursue a business loan there are large number of document that are to be submitted and that they should also be cleared by Bank. 3) Also after visiting a Private bank as well as Government bank one can understand that there is a huge difference between the loan procedure as well as interest rates. 4) Government bank lends loans at a Prime Lending Rate that is fixed by the Reserve Bank of India whereas the Private Bank decides the interest rate depending on the project of the company and their financial position. 5) However, a bank loan is not the only way the only source of finance if possible debentures should be issued as they have benefit of tax shield. 6) This project has increased my knowledge about financial operations. 7) I have also realized that this practical knowledge gained during the project will help me greatly.
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