Credit Monitoring (CMA) Data and Project Reports provide lenders with most of the information that they need to decide whether a prospective borrower is credit-worthy or not. It helps in gauging the loan feasibility, the prospective borrower’s financial capacity and most importantly, the borrower’s ability to repay the loan in a timely manner. CMA Data is mandated by RBI in respect of all large borrowers.

CMA Data, as already mentioned here, include Financial Statements, Projected Financial Statements, Ratio Analysis, Fund Flow Statement, etc.

• The first requirement for any business expansion is capital. The most common source of capital are financial institutions/banks. In order to successfully borrow funds from these financial institutions, the borrower has to ensure that the documentation provided by them is accurate, complete and reliable. This vastly improves the chances of the loan application to be approved as well. Special care has to be taken to ensure that the amount proposed to be borrowed is within the prescribed Maximum Permissible Finance limits. Being as transparent as possible in the data submitted would portray a positive picture and enable efficient decision-making. Further, it could also prove to be an aid to negotiate better terms and conditions.

• The next step would involve the preparation of a project report. It is advisable to seek professional advice for both CMA Data and Projected Report since any inadvertent lapse in the data might lead to either a rejection or a delay in the loan approval process. A professional might also be able to better align the documents submitted with the requirements of the lender.

• The project report should be prepared on the basis of reasonable assumptions and estimates of the expansion plans of the business. The business entity should be quite clear about the amounts to be raised, how the same is going to be utilized and a prompt repayment plan of such funds.

• Wherever there is reliance placed on past performance such as demonstrating economic trends, it is better to show the linkage with the audited financial statements as well. The track record of the business should be stellar, with appropriate reasoning for any gaps in performance.

• Further, the business expansion plan should be reasonably viable as well. The amount proposed to be borrowed needs to justify the cost of the new venture / expansion plan.

As seen above, the CMA Data and projects report become the key to unlocking the complete growth potential of the business. Preparation of this data also helps the business to add another dimension and point of view to their vision and strategies and help it attain its goal. Please contact BCL India chartered accountant in bangalore to reach the next stage of your business.