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While submitting the finance proposal to banks or any financial institution, the proposal should contains the basic details to preliminary assess the requirement of finance as well as understand the persons behind the business.

These basic details, submissions are listed as follows:

KYC Details.

KYC details are required for the company as well as promoters or directors of the company. In case of Firm the details of the Firm as well as the partners are required.

The KYC details includes, Proof of business & residence address, Photo Identity, Copy of PAN card, Various licenses issued like license under The Shops & Establishment Act, as applicable.

Project Details.

This include a details project report explaining the production, procument, marketing, and finance details. The project details also include the CMA Data giving the various ratios, and other details of Net worth, etc.

This will help to understand the utilization of the finance sought for.


IN case of completed years, the audited accounts of immediate preceding three years required to understand the trend and line of business activity. In case of new venture, a provisional accounts will serve the purpose.


The Income Tax returns filed for last three years of the business entity, as well as the owners i.e. directors or promoters should also required. This helps in accessing the income earned out of the business venture.

Net Worth.

The statement of net worth of the Directors as well as existing business activity should be attached. This helps in ascertain the security offered and generation of the worth out of the business activity.

Details of Primary and Collateral Security offered.

Generally, the primary security offered are in the form of stocks, book debts, rent receivables,etc. In case of such type of primary security the details like location,valuation,average holding, insurance, safety measures etc are required. In case of term loan, the Performa of machinery to be purchased, assets to be generated by way of construction etc,comparative prices of the new asset, and the details of the suppliers, their reputation, their account details should be submitted.

The collateral security offered are generally in the form of immovable property,exisiting plant & Machinery, Land & building etc. The copies of the tile deeds, valuation report, vetting report, legal opinion on marketability of the security offered be submitted.

Agreements of Business Tie up.

Distributorship agreements, Agreements for supply of raw materials. sales orders in hand, tie up arrangements for marketing, manufacturing and outsourcing agreements as applicable should be submitted to give an idea of the early business activity already undertaken.

Write-up on Business Activity.

This will include, the prospectus of the exisisting line of activity as well as the growth potentials of the new activity. The note also explain the promoters experience in the business activity to be undertaken i.e. new venture.

IT also contain the views of the promoters about the growth and future of the business. The note also explain whether the new business activity is forward or backward integration of the exisisting business line.


It is always, better to submit all the preliminary details as stated above to the bank or financial institution whether the same are asked for or not as this will helps to reduce the time lag between the submission of the finance proposal and sanction in principle.

CA Satish C Badve


Published by

CA Satish Badve
(Professional Practice)
Category Others   Report

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