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What is a CMA report

To get a bank loan, a working capital loan, or a CC limit, you need to prepare and present CMA data. The CMA report in Excel format is one way to present it more attractively and efficiently. As we said it is really essential to create CMA reports for bank loans. We, the Finline team, have prepared this article to provide answers to all of these queries. Any inquiries are welcome from your side.

CMA report also is known as the Credit Monitoring Arrangement report. It is a report showing the projected performance and the past performance of a business in financial terms for obtaining a bank loan. Also, It is compiled with all the required financial ratios and metrics to help bankers obtain the financial health of a business. Therefore, most of the Banking and Financial Institutions request the entrepreneur to submit the CMA report to understand the flow and application of funds in the business.

Most banks require loan applicants to prepare reports. These reports help the banks determine if the capital can be used for growth and eventual repayment. However, a better CMA report will improve the chance of getting a loan. Finline helps you create the report professionally and easily. A banker/analyst can easily interpret the data and ratios in the report and thus reach into a conclusion on the health of the business unit.

Preparing a CMA report is a tiresome job and needs extra professionalism and care, so a normal entrepreneur feels it very difficult to prepare. With Finline, it’s very easy. You don’t need to worry about difficult calculations, ratios, or adjustments because our intelligent software takes care of it all. Finline is the best tool for CMA data reports to obtain bank loans.

The CMA report includes the following statements:

Operating Statement

This indicates the borrower’s business plan showing the Current Sales, profit before & after tax, sales projections, direct & indirect expenses, and profit position for 3 to 5 years.

Analysis of Balancesheet

This statement contains an analysis of the current & projected financial years. Also, it helps in providing a comprehensive analysis of current & non-current assets, current & non-current liabilities and cash & bank position of the borrower. This statement also specifies the net worth position of the borrower for the future projected years.

Comparative statement of current asset and current liability

This analysis helps to decide the capacity of the borrower to meet the working capital requirements and the actual working capital cycle for the projected period.

Calculation of ABF/MPBF

This includes a calculation that indicates the Asset Based Finance and Maximum Permissible Bank Finance. It shows the borrower’s capacity to borrow money.

Cashflow statement

The main objective of this statement is to capture the movement of the fund for the given period.

Ratios

This indicates the financial strength of the unit at different parameters

Why is CMA data necessary?

CMA provides a financial roadmap of a company’s success through time. CMA data may assess the general financial situation, loan eligibility, repayment ability, etc. A well-planned and written CMA Data is enough to demonstrate loan eligibility.

While a CMA Report conducts a highly thorough examination of a company’s profit and loss account and balance sheet, only a select few ratios and indices determine loan eligibility.

Crafting an effective CMA Report has two key components. First, convey that money is required for development. Second, outline a sound financial estimate. The firm needs to find the right balance between being strong enough to repay the loan and not so healthy that it can grow without needing one, as shown by the CMA Data.

Experts at Finline skillfully create CMA Data and Project Reports for various businesses and industries. We are confident that we possess the necessary expertise to provide our clients with accurate CMA Data and Project Reports. Furthermore, a well-written CMA Data set with precise and understandable financial performance metrics forms the foundation for a loan request. Increase your chances of securing a loan by using our simple help tool.

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Annual Compensation vs Annual Salary: What’s the Difference?

Income is money (or some equivalent value) that an individual or business gets, usually in exchange through investing capital or providing a good or service. You don’t have to publish every employee’s salary publicly to have pay transparency. Learn the stages of pay transparency and how you can implement them to increase performance. On average, each year amounts to 52 weeks and 1 day, or 52 whole weeks total.

What is an example of annual income?

Annual income is the amount of money you bring home each year prior to deductions. For example, if your base pay is $45,000 per year, that's your annual income even though your take-home pay is less after deductions.

Beginning Dec. 1, 2016, the base salary rate was set to increase to $913 per week, but in November 2016 a court case in Texas put that ruling on hold. Compensation is the monetary payment employees earn for doing their jobs. Compensation is a major factor in where employees choose to work, with our research finding that 75% of employees would consider leaving their current job for a salary increase. In analyzing a company’s earnings, GAI will often be disaggregated into Gross Margin, which is GAI as a percentage of total revenue earned.

How Do Credit Cards Work?

This is usually calculated by taking a range of salary amounts for a role. For example, let’s say the average salary amounts for a role were €20,000, €30,000 and €40,000. To get the average, you’d add up these 3 numbers, then divide by the number of salaries (3).

Adjusted gross income is simply all the money you made for a year minus special adjustments the IRS allows to help lower taxes. Then, that $113,000 https://adprun.net/bookminders-outsourced-accounting-and-bookkeeping/ gross income is used to calculate other forms of income. Sometimes a credit application won’t specify if they want your net or gross income.

Credit Card Quick Links

Businesses operating as sole proprietorships, partnerships, or S corporations are not taxed. Any net income is passed through to the owners or partners, who pay federal taxes based on their individual tax brackets. State income taxes vary as well, ranging from 2.5% to 12%, although some states have no tax. The term household income generally refers to the combined gross income of all members of a household above a specified age. Household income includes every member of a family who lives under the same roof, including spouses and their dependents.

You’ll also get access to Statistics, our innovative feature which automatically categorises all of your transactions to help you understand your spending. Your gross income is used as the starting point for determining your taxable income, as well as your ability to pay rent and pay back loans. He gave his Accounting For Startups: Everything You Need To Know In 2023 accountant all his income receipts and after he reviewed them he estimated that Mr. Johnson’s gross annual income was $42,578. Now that he has this number he can figure out how much Mr. Johnson has to pay this year and he can also compare this figure with last year’s to see how he’s doing with the company.

Net Income Formula: How To Calculate Net Income

When preparing and filing your income tax return, gross annual income is the base number you should start with. If you know your gross income, you’ll have a better idea of what taxes you will either owe or be returned. Your gross annual income is also the number that’s used to qualify you for a loan or a credit card. Calculating annual income can be confusing for some, and it’s something you want to get right when it comes to reporting your income on Federal and state tax returns.

  • The federal government establishes base salary guidelines for certain employees including those working in executive, professional, and administrative positions.
  • State income taxes vary as well, ranging from 2.5% to 12%, although some states have no tax.
  • He gave his accountant all his income receipts and after he reviewed them he estimated that Mr. Johnson’s gross annual income was $42,578.
  • The financial state of a business or individual impacts their way of living and purchase decisions.
  • These expenses are typically referred to as the cost of goods sold (COGS), or cost of sales in the case of services businesses.
  • Our work has been directly cited by organizations including Entrepreneur, Business Insider, Investopedia, Forbes, CNBC, and many others.
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FSSAI – Registration/License

FSSAI stands for Food Safety and Standards Authority of India which is an organization that monitors and governs the food business in India. It is an autonomous body that is established under the Ministry of Health & Family Welfare, Government of India.

Every food business operator involved in the manufacturing, processing, storage distribution, and sale of food products must compulsorily obtain FSSAI Registration or License. On all the food packages a 14-digit registration or license number will be there. The 14-digit registration number gives details about the assembling state and producer’s permit. The aim of this registration procedure is to make the FBO more accountable for maintaining the quality of the food products. The licensing and registration procedure and requirements are regulated by the Food Safety & Standards (Licensing and Registration of Food Business) Regulations, 2011. FSSAI Registration is different from FSSAI License in the sense that depending on the size and nature of the business, FBO should obtain the necessary registration or license.

FSSAI registration or license is based on the business volume and premises. Depending upon the installed capacity or turnover or location, applicant premises are eligible for licenses such as basic license, central license, and state license.

How to get FSSAI Registration?
FSSAI Registration is a basic license and it is required for all the FBOs involved in the small-scale food business. This category covers the following businesses:
  1. Any FBO with an annual turnover of not more than Rs. 12 lakh.
  2. Petty retailer dealing in food products
  3. Any person who manufactures or sells any food article by himself
  4. The temporary stallholder sells food.
  5. Any individual who distributes food in any religious or social gathering except a caterer
  6. Small-scale or cottage industries dealing in the food business and the following:
What is the Procedure to follow?
  1. Initiate FSSAI registration by submitting Form A (application) to the Food and Safety Department.
  2. The Department can accept or reject this application within 7 days from the date of receipt, and it must communicate the rejection to the applicant in writing.
  3. If the department accepts the application, it will grant a registration certificate with the registration number and the photo of the applicant.
  4. FBO should prominently display the certificate of registration at the place of business during business hours.
How to get an FSSAI License?

For all other FBOs apart from small-scale businesses, an FSSAI license has to be obtained. FSSAI License can be classified into two categories i.e. State FSSAI License and Central FSSAI License based on the size of the business whether it is a medium scale or large scale business.

Generally, FBOs who are large manufacturers, importers, and exporters dealing in large-scale food business need to obtain FSSAI registration from the central government and FBOs with small to medium-sized manufacturing units, transporters, marketers, traders, etc., need to take FSSAI registration from the state government. To apply for State License the FBO must have a turnover between Rs 12 lakh to Rs 20 crore.

What documents are needed?
  • Address proof
  • List of food category
  • Layout plan
  • List of equipment
  • NOC from municipality
  • Incorporation certificate
  • List of directors/partners
  • MOA and AOA
  • Water test report
  • Import Export Code
  • Form B duly completed and signed
  • Plan of the processing unit showing the dimensions and operation-wise area allocation
  • List of Directors/ Partners/ Proprietor with address, contact details, and photo ID
  • Name and list of equipment and machinery used with the number and installed capacity
  • List of food categories to be manufactured
  • An authority letter from the manufacturer nominated a responsible person’s name and address
  • Analysis report of water to be used in the process to confirm the portability
  • Proof of possession of premises
  • Partnership deed/ affidavit of proprietorship
  • NOC and copy of License from the manufacturer
  • Copy of certificate obtained under Coop Act 1861/Multistate Coop Act 2002
  • Food safety management system plan or certificate
What Documents Are Required to Obtain the Central License?
  1. Form B duly completed and signed
  2. Plan of the processing unit showing the dimensions and operation-wise area allocation
  3. List of Directors/ Partners/ Proprietor with address, contact details, and photo ID
  4. Name and list of equipment and machinery used with the number and installed capacity
  5. List of food categories 
  6. An authority letter from the manufacturer nominated a responsible person’s name and address
  7. Analysis report of water to be used in the process to confirm the portability
  8. Source of raw material for milk, meat, etc
  9. Recall plan wherever applicable
  10. Ministry of Commerce Certificate for 100% EOU
  11. NOC/PA document issued by FSSAI
  12. IE code document issued by DGFT
  13. Form IX
  14. Certificate from Ministry of Tourism
  15. Proof of possession of premises
  16. Partnership deed/ affidavit of proprietorship
  17. NOC and copy of License from the manufacturer
  18. Food safety management system plan or certificate
  19. NOC from the municipality or local body
  20. Supporting document for proof of turnover and transportation
  21. Declaration form
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you need a bank loan to start your dream business, a project report is a necessary document. Struggling to make one? Don’t worry, you are at the right place. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our reports. Click to create your report.

Now there is nothing stopping you from starting your dream business. Begin your journey with Finline right away!

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Aatmanirbhar Bharath Abhiyan

Aatmanirbhar Bharath Abhiyan

In his fifth address to the nation, Prime Minister Narendra Modi launched Atma-Nirbhar Bharat Abhiyan(ABA). The objective of this ‘Self-Reliant India Mission’ is to bring a special economic package that will offer relief measures across all the sectors in the country. Also, the package announced is estimated to be 10 per cent of India’s GDP. At the same time, it is a supporting key to all businesses after Covid-19. 

To regain economic power amidst the pandemic, the relief packages announced the total amount whooping Rs.20 lakh crore. Finance Minister, Nirmala Sitaraman, addressed the fiscal policies and relief measure that comes under this package. With the ongoing economic ramifications, the ABA policy ensures that it doesn’t leave any sector untouched by the revival, particularly in MSMEs, which are the heart of the economy.

Who is eligible to avail of the benefits of ABA?

The Aatmanirbhar Bharath Abhiyan has mapped out a clear plan for the Micro, Small and Medium Enterprises (MSME). These enterprises employ almost 40% of all the employees in India. Thus all the owners, laborers, and workers who are part of the Indian MSMEs greatly benefit from the new ABA policies. This will majorly include the Manufacturing and Services enterprises but not limited to the industries, plants, and machinery-dependent management. Importantly, even the stressed enterprises are included under the scheme. 

Thus, with the new reforms, the MSMEs get to grow in size and enjoy the benefits. However, the elaboration on relief measures taken under ABA provides five important takeaways.

MSME Redefined

The government altered the definition of MSMEs to offer great support and benefits. Earlier, the authorities defined the MSMEs only based on the investments. Now, in contrast, they will be described as a composite matter of considering both investment and turnover. The table given below highlights the differences.

Extension of Emergency Credit Line for MSMEs

To begin all the operations post-pandemic, the Government offers Rs.3Lakh crores as additional funding. Lenders provide this collateral-free automatic loan to MSMEs with a tenure of 4 years along with a 12-month moratorium on the principal. No guarantee fee is levied on additional collaterals, and the Government covers 100% of the credit as a guarantee through banks. It is estimated that around 45Lakh business units in India benefit, and the scheme will be open until October 31, 2020.

Debt Value to NPA or Stressed MSMEs

The Aatmanirbhar Bharath Abhiyan provides an additional debt of Rs. 20,000 crores to the MSMEs categorized as NPA or stressed. Considering the valuables provided to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), we offer a partial credit guarantee of Rs. 4,000 crores to the banks. Expect banks to provide this fund as infused money for the equity given to the enterprises.

Equity Infusions

The Government also provides equity funding for the potential growth under the introduced reform policy called “Fund of Funds.” With a corpus amount of Rs.10000 crore, the Mother Fund and Daughter Funds leveraged for  MSMEs. This is bringing an opportunity for companies to enlist them on the Stock Exchange.

Global Tenders Dissolved

By making amendments to the General Financial Rules, the Government has disallowed the Global tender of up to Rs.200 crores. As a measure to promote Make-In-India and also to save Indian ventures from foreign competitors, this policy has become one of the primary agenda under ABA.

How do MSME owners apply for the ABA funding?

Even though the details of the application for Aatmanirbhar Bharath Abhiyan are yet to be announced, there is one primary thing you need to do beforehand. Start your business project report. Project reports are one of the determining factors to take your application forward.

Generally, the report will give an overview of the company. For example, current status of the projects, the number of employees, the budget for each project, balance sheets, expenditures, employee salaries, taxation, etc. With the perfect project report, there is a high probability that you may have a successful funding or loan process/

If you have never created a project report before, then don’t worry. You can find the right tool for creating one. Check Finline, a platform that allows you to create a project report. You can create a powerful project report in ten minutes. That too in your language. Also,all public and private sector banks working in India accept our project report. Click to create your report.

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Top 5 Government Loan Schemes for Small Businesses

Approximately 40 million Micro Small and Medium Enterprises (MSMEs), both registered and unregistered, exist in India. The government provide some loan schemes to assist small and medium enterprises. These loans primarily aim to assist the less fortunate and middle-class segments of society. The top 5 government loan schemes for small businesses in India are discussed in this article by Finline.

1. MSME Business Loans

One of the several loan programs made available by the government in September 2018 is the MSME business loan. The loans approved under this program are intended to increase financial support for national development and promote local business expansion. The program enables both new and established enterprises to make use of the financial support it offers. The plan earns the designation “MSME business loan in 59 minutes” primarily because it obtains permission for the credit within 59 minutes.

Benefits

The loans offered under these schemes range up to Rs. 1 crore and take between 8 and 12 days to complete the procedure. The type of enterprise the loan application involves will determine the interest rate. The loan amount issued under this plan can vary from 1 lakh to 5 lakh, and the interest rate on such loans starts at 8.5%.

Eligibility Criteria

The following criteria must be met in order to be eligible for a loan under this program:

  • GST confirmations
  • IRS tax-related documentation
  • The most recent six months’ worth of bank statements
  • Ownership-related records
  • KYC specifics
2. MUDRA Loans

The Micro-Units Development and Refinance Agency organization, which was founded by the Indian government to provide financing to micro business units, approves the MUDRA loans. “Fund the unfunded” is the guiding principle of MUDRA loans. MUDRA loans are offered by all bank branches in India. These loans were significant in developing the idea of low-cost finance for small and medium-sized firms. The following categories apply to MUDRA loans:

CATEGORY OF LOAN BENEFIT
Shishu Loan Upto 50,00 INR
Kishor Loan 50,000 INR-5,00,000 INR
Tarun Loan 5,00,000 INR- 10,00,000 INR
Eligibility Criteria

All enterprises, including sole proprietorships, partnership firms, private limited liability corporations, publicly traded companies, and other legal organizations, are qualified to apply for credit under this program.

3. Stand-Up India Scheme

The Stand-up India program was initiated by the government to offer loans to women and members of Scheduled Castes as well as Scheduled Tribes who own companies. This program is run by the Small Industries Development Bank of India (SIDBI). 

Benefits

The loan amount awarded under this program may be anywhere between Rs. 10 lakh and Rs. 1 crore. This loan must go to at least one woman entrepreneur or member of a Scheduled Caste or Scheduled Tribe from each bank. This loan is supposed to cover approximately 75% of the project’s entire cost.

Eligibility Criteria

Companies operating in manufacturing, commerce, or other service-related industries can apply for loans under this program. If the company is not a sole proprietorship, at least 51% of the assets must be owned by a woman or a member of a Scheduled Caste or Scheduled Tribe.

4. Udyogini

A program called Udyogini, which means “women empowerment,” has been started to educate Indian women. The Women Development Corporation, on behalf of the Government of India, launched the program. Cash provided under this program assists women in obtaining the capital they need to establish a company.

Benefits and Eligibility

Under this program, the lender can only provide a loan of up to Rs. 15,00,000. A woman entrepreneur must be between the ages of 18 and 55 in order to be qualified to apply for this program, and her family’s yearly income cannot exceed Rs. 15,00,000. For physically impaired or widowed women, there is no upper-income restriction. For loans under this program, there are no processing fees or collateral requirements.

Documents Required
  • Passport-sized photos
  • Birth certificate
  • A card showing they fall under the federal poverty line
  • An Aadhar card
  • Proof of their caste
  • A passbook or bank account
  • A ration card
  • Documentation of their income
5. Credit Guarantee Fund Scheme for Micro and Small Enterprises

The Indian government has introduced a credit program that enables funding for enterprises that are part of the MSME sector through unsecured loans. The program may offer loans to both new and established businesses. The Ministry of MSMEs and Small Industries created the Credit Guarantee Fund Trust as a trust with the goal of administering the CGFMSE program. This program may make cash flow loans of up to Rs. 200 lakhs available, with advantages given to qualified women entrepreneurs.

Eligibility

Examples of organizations engaged in manufacturing include retail businesses, institutions of higher education, self-help organizations, and training facilities. Additionally, companies in the service industry are also eligible to use this loan program’s money.

Entrepreneurs should take full advantage of these top 5 government loan schemes to start their dream business.

Frequently Asked Questions (FAQs)

How are government business financing programs implemented?

The government implemented its business loan programs to help people, particularly those who own Micro, Small, and Medium-Sized Enterprises, obtain financial support in the form of loans for their company’s needs.

How can a startup obtain loans?

If a start-up is not eligible for bank loans but is an MSME, the person in charge of the enterprise may be able to obtain a business loan through any recently implemented government programs.

The above-mentioned schemes need detailed documentation and a perfect project report.  We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.

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How to Manage Account Payables

Cash is the lifeblood of every business. Run out of cash, and your business will be dry and out of the blood. you can’t pay your bills or make payroll. Even if you’re not up and running yet and just planning on launching a new business, you’ll need to know how much cash you need to get started and stay in business during those first crucial months. To prevent the horrible situation of running out of cash from ever happening to you, it’s critical to understand how cash is moving into and out of your business. Accounts payable is the total of the bills that your business has, but that you haven’t paid yet.

Accounts payables are considered as short-term debt. It includes things like your business rent, electricity cost and anything associated with running your business month to month.

A cash flow statement shows how cash is moving in and out of your business over a certain period like a month/quarter/year. This statement is one of three key financial statements for every business—the other two, are an income statement (also known as a profit and loss statement) and a balance sheet. These three statements give you the complete picture of your business from a financial perspective and tell you exactly how your business is doing.

Account payable is an important parameter in the cash flow and balance sheet. Accounts payable is the amount of money that you owe to your vendors and suppliers. Essentially, it’s a total of all the invoices that you have received but that you haven’t paid yet. In your company’s financial statements, accounts payable will show up on your balance sheet as a liability. Ideally, you should keep your business’s financial books organized and enter your bills into your accounting system as they arrive. This doesn’t mean you have to pay your bills right away, but it helps you keep track of who you owe and what your liabilities are.

Tracking your accounts payable is a critical component of managing your cash flow. As your business grows, you may be spending money on different services for your business. You will also receive invoices that need to be paid. If you can’t manage your debts, you could find yourself in a cash crunch, or worse, defaulting on a debt. Especially when you are growing quickly, you may need to buy more inventory and invest in business expansion at a faster rate than your customers are paying you. This means that you will have bills that come due before you receive money from your customers.

In general, having a lower accounts payable balance is better. This means that you are paying your bills on time. Of course, as your company grows, your accounts payable will also naturally grow as you purchase more supplies and have bigger bills to pay. Don’t worry, though. This is normal. If you are growing, you’ll want to track what’s called the accounts payable turnover ratio to make sure the percentage of accounts payable compared to your total purchases remains fairly constant.

How to reduce your accounts payable?

If your accounts payable are growing and you need help paying your bills, there are a few strategies you can explore. This will help to reduce your AP or at least manage it better:

1. Negotiate with your suppliers:

Most suppliers would rather see you pay their bills than have you default and not pay at all. A simple call to your vendors to negotiate a payment plan can often help ease the pain. Also, this method can keep you in good standing with your supplier so you can continue to do business with them.

2. Encourage your customers to pay faster:

For most businesses, getting cash in the door from customers is the best way to help pay bills faster. 

3. Establish a business line of credit:

You should do this before you have an accounts payable problem as banks are less likely to lend to you if you already have too much debt. That can help ease the pain of certain times of the month when you have less cash on hand. Just be careful not to overextend your business and add even more debt. Instead, think of a line of credit as a very temporary loan that allows you to pay your bills.

4. Lower your costs: 

This is probably the most obvious option for lowering your accounts payable, but it’s always worth mentioning. When you shop around for different vendors, you might be able to lower your expenses and therefore lower your bills. It’s always good to be on the lookout for better deals for your business. So reserve some time every few months to look at your expenses and see where you might be able to cut costs.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our project report. Click to create your report.

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Prepare a Projected Balance sheet

A projected balance sheet also known as a pro forma balance sheet, shows the estimation of the total assets and total liabilities of any business. A pro forma balance sheet is a tabulation of future projections. As a result, it will help your business manage your assets now for better results in the future.

The asset will contain long-term assets (non-current assets ) and current assets. The long-term assets will include the building, land, machinery, and vehicles. Whereas the current asset includes the cash in hand/bank, receivables, and socks for the short term.

On the liability side, we have non-current liabilities and current liabilities. In the non-current liabilities, it includes the term loan and current liabilities include the account payable and short-term loan such as a working capital loan.

You may need to prepare a projected balance sheet if you have applied for a business loan for your new project or if you are interested in buying new fixed assets. By showing a well-crafted projected balance sheet from Finline, the bank will get the confidence that the business unit is viable to invest/provide the loan.

How to Prepare Projected Balance Sheet

The following steps will help prepare the projected balance sheet:

Step 1: Calculate cash in hand and cash at the bank

If you have no booking record of your cash, you can show cash in hand after checking your cash balance in the business’s pocket. You can check also the available balance at the bank. Both will be your current assets on the balance sheet.

Step 2: Calculate Fixed Assets

See everything around you. Make a list of assets whose benefits are you taking more than one year. Check its price from cash memos or past bills. Try to calculate the time of its use. If you have used it for 3 years. Its value will surely decrease due to depreciation. Charge 10% to 20% per year on every fixed asset up to the used period with any method of depreciation. Now, the system will provide you with the current cost of the fixed asset. Show it on the asset side of the balance sheet.

Step 3: Calculate the Value of Financial Instruments

If you invested your money in shares, bonds, and other financial instruments. Write its purchase price. If it has decreased, then you can also show the current market price of financial instruments.

Step 4: Calculate your Business Earning

If you have not made a profit and loss account. You can compare your expenses and your income. If your income is more than your expenses, it will be your net profit. That will be transferred to the liability side of the balance sheet. You should only deduct expenses whose benefits, you have obtained in one year.

Step 5: Calculate Business’s Liabilities

In these liabilities, you can add bank loans, secured loans, and other loans. That will be added to the liability side of the projected balance sheet.

Step 6: Calculate Business’s Capital

Business’s capital, you can calculate by subtracting outside liabilities from total assets. That will also add to the balance sheet on the liabilities side.

Non-finance/accounting people will be puzzled about how to create the projected balance sheet for their project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

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Best Low-cost Business Ideas for India

The following are the Best Low-cost Business Ideas that you can start in India:

  1. Food truck

    The food truck is one of the fastest-growing businesses in India. Food trucks offer the potential to those looking to get into the low-cost-high-returns business. Considering their growing appeal among the urban masses today. As the retail cost is increasing, this is a highly profitable business.

    2. Tour guide

    This is a no-investment service where you only need to spend your quality time to start earning. Can focus on school trips, college trips, tourist-travels can ask you to not only make all the arrangements for the trip but also guide them through it, as the leader of the pack. Since the entire business can be carried through the internet, there is no other starting cost that you need to worry about, other than perhaps maintaining a travel-guide website for your potential clients.

    3. Mobile recharge shop

    Even with online recharge, in India, most mobile users prefer visiting a recharge shop to fill their balance. So those looking to practice this business can start by renting a space in a small local shop. This rent will be the primary (monthly) expenditure. You also need to form ties with the network providers of the area, such as Airtel, Vodafone, Idea, etc., and pen down their commission rates, where they will receive a cut of your profits from the sale of the commodities taken from them. If you start with a low rental option, then your profit will be on the higher side.

    4. Tuition center

    This is possibly one of the most cost-effective businesses to launch, due to its near-zero starting cost requirement. Most tuition teachers take classes in their own homes, thus eliminating any expenditure on rent and supplies. The only effort you need to put in as a tuition teacher is to take to advertise yourself on social media or go the old-school way with flyers and ‘word-of-mouth’ recommendations.

    5. Tailoring unit

    As the population increase, the demand for crafted and customized dress is a need of the hour. You can very easily start the tailoring unit with very little investment. If you start the service in your home, the cost of the machine will be only considered and that too will be less than Rs 10 thousand/-

    6. Online bakery

    If you are a cook or crazy about cooking? then you can start a very low-investment home-based bakery and you can sell the product through online delivery apps like Swiggy, zomato, and Uber Eats.

    7. Vlogging (Youtube channel)

    YouTube is a hotspot for creative and talented individuals looking for great returns with little monetary investment. YouTube allows its users to create independent channels and upload their videos for free. It even pays some YouTubers whose channels are popular.

    8. Event or Wedding Management

    Event managers barely spend any time in the office. They are best at networking and managing, checking out the hundreds of venues, meeting sponsors, scheduling performances, and being on the field 24/7. On that basis, their demand revolves around their brand image and popularity, which can be built with a good online marketing strategy. However, the overall startup cost for building this brand is minimal, if at all priced.

    9. Tea stall

    80% of Indians love tea and sip an average of 3 teas a day, so if you have a small bench or a wayside, you can easily start it. Many truck-based tea vendors are also coming up. While the tea industry as a whole has done exceptionally well over the decades, the smaller tea stall owners have been reaping the benefits of their overall success. Besides a basic budget for renting a small room or stall for space, the only other investment you need to make is on buying tea from the manufacturers and purchasing makeshift benches and tables.

    10. Dance/ Music school

    The only investment that those looking to run dance or music schools have to carry out is in rental space. Besides this, the business runs on their skill as an instructor as well as their active presence in respected circuits. As the business grows, it may need to set aside an amount for the salary of an assistant or associate as well, but in the initial stages, the trick is to make sure that enough people are recommending your school to its potential students.

 

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

Also Read: Which are the Best Low Investment Business Ideas 2021?
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Types of Business Loans in India

A business loan is a type of financial assistance one can avail to meet various needs of a new or growing business. The lender feels comfortable offering a business loan to a borrower if the application has a strong ‘business plan /project report’ with decent cash flow goals and capital gain much greater than the interest of the secured loan. If you don’t have capital in hand, it is better to go for business loans in the following scenarios.

  1. Planning to establish a new business
  2. Planning a rapid business expansion
  3. Need new equipment and machinery for your business
  4. Require additional working capital for your business
  5. Need capital infusion in the business to turn it profitable
  6. Need capital to replay previous loans
What are the Types of Business Loans?

There are 8 types of business loans based on their nature.

Term loans

Lenders offer both secured and unsecured business loans based on the state and needs of the business. There are three types of term loans available with the lenders, these include a) short-term loans, b) long-term loans and c) intermediate loans. The repayment schedule of term loans can be monthly or quarterly. Based on the term loan secured, the type of interest can be floating or fixed. Part of popular schemes such as MUDRA, PMEGP, etc come under this

Demand loans

A demand loan needs to be repaid based on the demand schedule of your lender. Banks and financial institutions offer both secured and unsecured demand loans. The repayment tenure of demand loans extends up to a maximum of 12 months.

Loan against securities

Such loans are offered based on bank-approved financial securities such as insurance policies, mutual funds, Demat shares, saving bonds, fixed maturity plans, etc. Such loans can be secured to mitigate an immediate financial crisis

Invoice discounting

During a financial crisis, the business can secure instant cash from the lender by submitting invoices of credit sale as a security

Letter of credit facility

Typically, businesses use this type of loan in international transactions. This type of loan can be availed based on the creditworthiness of the buyer’s bank when the seller and the buyer do not know each other. This ensures on-time payments to the seller based on the letter of credit offered by the bank

Cash credit facility

It is similar to the overdraft facility. In this facility, the maximum withdrawn limit is set by the lending bank. The repayment tenure can be renewed for such loans in each 12. Best for working capital management.

Bank guarantee

It is a type of secured loan and can be availed with a mortgage or bank guarantees such as property as collateral.

Women-specific loans

The majority of the banks and Non-Banking Financial Companies (NBFCs) offer exclusive women-specific loans to promote women’s entrepreneurship. These loans come with a plethora of benefits such as lower interest rates, flexible repayment tenure, etc.

Also Read: Documents Required for Business Loan
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.

Step by step – question by question – you can create your report less than an hour

View sample PDF report
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Project Report Format for Bank Loan

If you need a bank loan to start your dream business, a project report is a necessary document. Struggling to make one? Don’t know the format for the project report? Don’t worry, you are at the right place!

In this blog, we will discuss about:
1) What is a project report?
2) Why do you need it?
3) How can you prepare a convincing project report?

1) What is a project report?

A project report is a mandatory document that outlines different aspects of the business or startup project. It should contain the project’s details, feasibility, and financial requirements. Here comes the next question, why does someone need this?

2) Why do you need it?

There are several reasons which show project reports as a must. Some of them are listed below:

  • Project reports will help the bank assess your project’s success rate and can thereby make sure that you can repay the loan.
  • It will help the bank understand the project’s risks and rewards.
  • Submitting a decent project report shows the lender that you have done enough homework and is serious about the project. The project report also provides information about your qualifications and experience.
3) How can you prepare a convincing project report?

The format of a project report varies from loan to loan. However, a strong and convincing project report should contain the following:

  1. Executive summary: An executive summary is a short summary containing the business’s overall status. It should be concise and should provide an overview of the entire project.
  2. Project description: It should explain the project’s nature, purpose, scope etc.
  3. Details of promoters: The details of the promoter’s skills, qualifications and experience should be mentioned.
  4. Details of Employees: Like the promoters, the details of the employee’s skills, qualifications and experience should also be mentioned.
  5. Production plan: This includes the details such as plant and machinery, raw material used and steps in the manufacturing process.
  6. Market analysis: It conducts research about the market to understand the demand for your product and services.
  7. Marketing plan: This provides the details about the marketing and sales strategies of your product/service.
  8. Project cost estimation: It’s the estimated expense that arises at the time of building the project.
  9. Balance sheet: All accounts will be visible on the balance sheet so that the lender can see where the money was spent.
  10. Profit and loss account: It shows whether the company is making a profit or a loss.
  11. Cash flow statement: It allows the lender to understand whether you have the ability to repay the loan.
  12. Loan repayment plan: This section should provide a well-defined plan for repayment of the loan.
  13. Break-Even point evaluations: It shows the point at which the project revenue equals its expenses.
  14. Conclusion: Lastly, Conclude the report by summarizing the key strengths of the project. Make it short and compelling.

Still, having trouble creating one? Let us help you. Our expert team at Finline helps you craft a compelling project report in less than 10 minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

Now there is nothing stopping you from starting your dream business. Begin your journey with Finline right away!

View a sample project report