Business Project Report plays an important role for Loans, Grants, Funding or Investment from Banks, Financial Institutions, Investors & Government?
Project Report is a document that provides detail on the overall status of the project or the areas of investment. Regardless of the type of report, it is made up of project data based on economic, technical, financial, managerial aspects. A well prepared project report will help to get that financial assistance or investment aiming for. Since the Project report is one of the key documents the Investor/Banker shall consider while reviewing loan/investment request, therefore it is important that the project report present to the business in a positive light and emphasize business determination to succeed. Reporting includes Financial performance, analysis interpretations, scope and viability.
Project Report can give the lender a condensed picture of where your business stands financially. It can demonstrate management strength—or, frankly, weakness. If done correctly, your financial sourcing proposal can also reinforce your deep knowledge of your market and industry, and therefore your business.
Business Financial Requirements
Every Business needs two types of funding requirements one is for assets creation and another is for working capital means day to day expenses and provision for receivables. New Businesses need funds for setting the parameters of business and a running entity also needs funds for expansion.
Bank or Financial institution provides Term loan for meeting the requirement of fixed asset creation or long term investment. Repay the amount availed EMIs includes principle & interest, term loans are available as both secured and unsecured credits.
Working capital loan is a loan that is taken to finance a company’s everyday operations. These loans are instead used to provide the working capital that covers a company’s short-term operational needs. Those needs can include costs such as staff salaries, rent, and debt payments.
Project Reports Requirements
Bank & Financial Institutions need project reports for Term Loan or Working Capital Loan. Institutional investors, Venture capital funders, Equity or preference share investors need projects for knowing the viability of business. For Government Grants or subsidies Departments also required projects. More than these requirements, one business needs projects or feasibility study for getting clarity of business operations.
Content of Reports
Introduction is a brief description regarding the project proposal of an entity, which is like an intro of a movie, covering all areas of business in some sentences.
Industry Pages is supposed to know the present scenario of the business in the Industry with facts and figures.
Business Pages include the present status of business, vision & mission, Services or products dealing with, business & branches details with locations, current performance & future plans or milestones.
Promoter Pages explaining experience, achievements, academics, skills and identity of promoters or key persons.
Project Pages covers all the details of the proposed projects like project description, project location, Scope, SWOT analysis, technicality, utilization of machineries and project parameters like raw materials availability, stocking, & manpower.
Financial feasibility explains the past and projected performance, funding and sourcing for the project, working capital requirements, past and projected financial position of business, Interpretations with facts & figures for understanding whether the project is financially viable or not. Analysis includes cash or fund flow, break even analysis, return on investment, payback period and other ratios.
Project Implementation phase includes the stages of implementation, time schedule and other factors up to the project setup and fully functioning.
Social Cost Benefit pages explaining how the proposed project is beneficial for the society and impact in society while implementing the project.
Conclusion is a summary of the total project and specifying whether the project proposal is viable or not.
Impact of Project Report
- Clarity on Operations and it will be a milestone and budget for the next few years.
- Know the scope and adequacy of the proposed project in the present scenario.
- Better utilization of 4M of business includes Men, Money, Materials & Machines.
- Repayment Capacity to cover the smooth repayment of funding includes the return on investment.
- Ensuring sufficient Cash Flow to meet the operational and non-operational fund/cash outflows with the projected inflows.
- Analysis and interpretations of the project provides understanding of Financial Leverage and Liquidity of investment.
- Promoters get the best equations in the business, how much fund required for setting up parameters and sources of funds means Promoter’s contribution/ capital, from Equity or preference share issue, investments, grants or subsidies or Advances or credit purchase.
- Investors get clarity on whether the investment is safe, favorable return on investment considering the alternative investments opportunities, exit clause, safe and secure exit from the investment without any loss or damage.