For obtaining any business loan from a bank, one of the required documents is a project report. It is an important document that can help you avail the loan. However, many new entrepreneurs lack experience in preparing a project report for bank loan. This results in the rejection of a business loan leading to stagnant growth. It is of utmost importance therefore to prepare the business project report well.

This article throws light on how to prepare a project report for a business loan, the essential components of a project report, and a few tips to prepare a project report for bank loans.

How to prepare a project report for bank loan?

One may wonder how to make project report for loan. It is fairly simple if you understand the following aspects.

Project report is similar to a business plan however it is a tool to communicate to the bank about what your project is, how you plan to implement it, why you need a loan, sales projection, how you plan to repay it, etc. As a result, you need to present a detailed plan as to how you plan to make the project successful and it has to be backed by data, market reports, etc.

Here are some components that you should include in a project report for a bank loan.

Format for a project report

A good project report usually has the following components:

Introduction page

This page should introduce your business briefly. You can speak about what is your business. For example, ABC Company is an automobile business and operates as a commercial vehicle dealer in Pune, Maharashtra. You can further add details such as the purpose and aim of your company.

Summary

This is a summary of your project. Briefly, you can write information on your project. For example, automation of your business operations. You can also mention the cost of the project, sources of finance, and other information in brief. Here is how you can include means of financing the project.

Promoters’ details:

You can mention details such as promoters’ work experience, educational qualifications, and so on. Here is how you can do it:

Details of the project

You need to mention all details of the project including what products/services you are offering, details of raw materials required for the business, details of required plant and machinery, required workforce, other infrastructure details, and so on.

Allocation of funds

You also need to mention how you plan to spend the fund that you may receive from the bank.

Marketing strategy

If applicable, you need to write about marketing strategy and plan for the project, marketing budget, and so on. For example, digital marketing, participation in trade fairs, live demonstrations, etc.

Sales projections

Mention your sales figures including what your sales projections are and how you plan to make it possible can add value to your project report.

Customer details

In case it is a big order from a customer or a contract win, you need to mention the details of the customer. You can list down names of the customers and details in following manner.

Tips to prepare a project report for loans from banks

Preparing a well-written project report can be time consuming and overwhelming. Here are a few tips to prepare a project report for a bank loan.

• Collate information and data: The project report includes a lot of data. It’s recommended to contact the relevant stakeholders, collate the information and save it in a centralised database. For example, you may get employee details from the HR department while the marketing plan needs to be gathered from the marketing head.
• Objective: When you are writing a project report for a bank loan, you need to keep the objective in mind and emphasise relevant information.
• Keep it simple: You need to prepare the project report in simple language. For example, you may be an engineering firm executing a civil works tender project. Here it is important to keep the language of the project plain and simple without using too many technical jargons.
• Format it right: You need to keep the format simple. You can check project report templates online to write the report. The bank officials may not read the entire project report. So, use a mix of text and visual elements (e.g., tables, images, charts, graphs etc) and highlight information that you think is important. Also, check in which format you need to submit the project report, for example, excel, PPT, PDF, etc.
• Present latest data: Data is extremely dynamic. Therefore, check and present the most recent data.
• Read and edit: Once you prepare the report, read through it thoroughly. This will help you to avoid errors.

Is a project report mandatory for business loans?

A project report is an important document for the future of your business. Therefore, it is necessary to spend time doing basic groundwork in detail. For example, market surveys and research can reveal the scope of your product in the market. Generally, it takes about 2-3 weeks to prepare a project report. Business communication internally is key here. So, connect with your teams and start preparing in advance.

However, not all business loans require project reports. For instance, if you are looking for an unsecure business loan, most lenders do not ask for a project report or business plan.