POINTS TO PONDER WHILE PREPARING A PROJECT REPORT SEEKING FINANCE FROM BANK - PowerPoint PPT Presentation

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POINTS TO PONDER WHILE PREPARING A PROJECT REPORT SEEKING FINANCE FROM BANK

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Title: POINTS TO PONDER WHILE PREPARING A PROJECT REPORT SEEKING FINANCE FROM BANK


1
POINTS TO PONDER WHILE PREPARING A PROJECT REPORT
SEEKING FINANCE FROM BANK
  • WHAT IS PROJECT REPORT?
  • HOW TO PREPARE A PROJECT REPORT?
  • WHAT ARE ALL THE POINTS TO BE COVERED IN THE
    PROJECT REPORT?
  • WHETHER ANY CONSULTANT (OR) A AUDITOR HAS TO BE
    CONTRACTED TO PREPARE THE PROJECT REPORT?
  • HOW TO EXPRESS TO THE BANK MANAGER ABOUT THE
    PROPOSED PROJECT FOR WHICH YOU REQUIRE FINANCIAL
    ASSISTANCE?

2
PROJECT
  • SELECTION OF LINE OF ACTIVITY
  • GETTING THOROUGH KNOWLEDGE ABOUT THE PROPOSED
    LINE OF ACTIVITY
  • HOW TO MANUFACTURE AND MARKET THE PRODUCT?
  • WHETHER THE PRODUCT PROPOSED TO BE MANUFACTURED
    IS A INNOVATIVE ONE (OR) IMPROVED VERSION OF THE
    ALREADY EXISTING PRODUCT?
  • WHETHER YOU CAN FUNCTION AS AN ANCILLARY UNIT TO
    A MAJOR MANUFACTURER.
  • 5 Ms MAN , MATERIAL , MARKET , MACHINE , MONEY

3
WHO IS AN ENTREPRENEUR?
  • EVALUATION OF THE CHARACTER ,
  • LIKE FRANKNESS, REASONABLENESS, PATIENCE,
    ATTITUDE TOWARDS RISK TAKING ETC.
  • OTHER QUALITIES
  • INITIATIVE , DYNAMISM , LEADERSHIP AND
    RESOURCEFULLNESS.

4
SELECTION
  • LOCATION Proximity to the point of sale (or)
    supply.
  • PREMISES Own (or) Leased.
  • MACHINERY Manually operated (or) Computerised
    Numeric Control (CNC) machine.
  • MANPOWER Unshilled , Semi-shilled , Shilled.
  • MATERIAL Ferrous (or) Non Ferrous.
  • MARGIN MONEY Source Father (or) Friends
    Relatives
  • Building 40
  • Machinery 25

5
COST OF PROJECT
  • Land Cost
  • Building Cost
  • Machinery Cost
  • Working Capital Margin
  • All the above Costs have to be met out from
    Long Term Sources.

6
WORKING CAPITAL
  • For running a business (or) a factory Working
    Capital is very much required.
  • How to mobilize Working Capital ?
  • 1) Own investment
  • 2) Borrowings Friends Relatives
  • Banks

7
BANK BORROWINGS
  • Lending is an Art and not a Science
  • Expectation of the Bank Manager will be
  • 1) Will he repay the Loan? Character,
    Competence and Capital.
  • 2) Competence can he repay the Loan?
  • Managerial Competence.
  • Technical Competence
  • Capital Promoters Stake in the business.

8
A Project can be technically feasible but it may
be Financially not viable.
  • Manufacturing Cost
  • Administrative Cost
  • Selling Expenses
  • Net Profit

9
PRINCIPAL SECURITY
  • A good security should satisfy the principle of
    MAST
  • (ie) it should possess four qualities , namely
  • Marketability
  • Ascertainability of Value
  • Stability of Value and
  • Transferability of ownership.

10
COLLATERAL SECURITY
  • EM of Immovable property
  • Landed Property
  • Building Property
  • House
  • Factory Building.
  • Personal Guarantee of a worthy Person.

11
FINANCIAL ASSISTANCE
  • TERM LOAN
  • Building , Technical Know-how fees
  • Machinery.
  • SHORT TERM LOAN
  • Presale Credit Limits.
  • Postsale Credit Limits.

12
SMALL AND MEDIUM ENTERPRISESSCHEMES AND
OPPOTUNITIES
  • Investment in Plant and machinery does not exceed
    Rs. 1.00 crore It is as SSI Limit.
  • In respect of certain specified items under
    hoisery, Hand Tools, Drugs and Pharmaceuticals,
    Stationery items and Sports Goods , this
    investment limit has been enhanced to Rs. 5.00
    Crores.

13
SMALL AND MEDIUM ENTERPRISESSCHEMES AND
OPPOTUNITIES
  • A Comprehensive legislation which would enable
    the paradigm shift from SSI to Small and Medium
    enterprises is under consideration of parliament.
  • Units with investment in Plant and Machinery in
    excess of SSI limit and upto Rs.10.00 Crores may
    be treated as Medium Enterprises.

14
List of Service Sector activities covered under
Medium Enterprises - Services
  • Call Centres
  • BPOs
  • Cybercafes
  • DTPs
  • Hotels and Restaurants
  • Hospitals / Clinics
  • Ancilliary agencies
  • Cable TV Network
  • Professionals like Doctors, Architects, Software
    Providers, Engineering concerns, Consultancy and
    Allied activities.
  • Beauty Parlours
  • Advertising Agencies
  • Industrial Research and Development Labs.

15
List of Service Sector activities covered under
Medium Enterprises - Services
  • Industrial Testing Labs
  • Clinical Laboratories
  • Industrial Photography
  • Photographic Labs / Processing Labs.
  • Cold Storage Services / Milk Chilling / Milk
    Processing.
  • Washing and Laundry Services / Dry Cleaning.
  • Motor Cycle Repairing.
  • Super Markets.
  • Shops , Offices , Show Rooms , Training Centres
    of Professionals.
  • Resorts and Travel Agents.
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