Project loan for New Business is offered by various banks & financial institutions to financially support more & more self-employed which ultimately create a huge level of employment opportunities in India, whether it’s a new setup or existing business finance is a basis necessity of every business.
Project loan interest rate is much affordable starts from 7.50% onwards with flexible tenure facility comes along with it.
If you have a solid project plan then no one can stop you from getting a loan.
Project Loan Scheme-
- Term loan facility are offered for existing business
- Under CGTMSE loan upto 2 Crore
- Upto 85% of project cost funded with minimum 25% margin
- Maximum repayment upto 10 years
What Banks check before financing a project?
When it comes to project funding, banks consider various points in terms of making sure that their funding project does have enough capacity to pay back borrowed amount within agreed time period without making any default.
Banks look at what type of products or services are offered, whether management are backend with high qualification & experience or not, what is their target segment to know it’s potential growth level & other financial parameters are considered. If all seems good then only back proceed further for funding.
What is the cost of Project?
Cost of project plays a crucial role in evaluating project loan, it estimates project projection. Significantly, the cost of project is based on calculating various circumstances like basic cost of land, building for plant & equipment, import & indigenous machinery & other preliminary and capital expenses.
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Is working capital part of Project Cost?
Yes, working capital is an essential part of project cost where it compiles the gap between account payable and account receivable too estimate the overall project cost required to implement the project through project loan.
Working capital helps to differentiate between company's current assets and current liabilities.
Major factors considered to determine working capital requirements-
Eventually there are some major factors considered to determine Working Capital requirements as under given: -
Type of Business- Business to business capital requirements go ups & downs, it totally depends on the nature of business if it falls under trading then obviously it requires a large level of working capital while we talk about manufacturing then investment seems lower as compared to trading business.
Seasonal Imbalance- Different business deals with different season, so it's not possible to produce such items overall the years & hence they need to store them which additionally add on capital requirements.
Operating Cycle- Operating cycle considered to be one of the key factors determining working capital as longer as business needs to meet paying suppliers & generating revenue from sales are the operating cycle of a project loan.
Inventory Turnover- Inventory turnover reflect numbers of times business sold & replaced inventory during a certain period of time. For example- When a company's inventory turnover seems to be lower the cycle through inventory gets delayed & eventually number of days get increased which ultimately require much working capital but when company’s hits higher inventory turnover its outcomes with decrease in inventory days.
How do I get a Loan for a Project?
Do you have a supreme project plan? If yes, then what are you waiting for- unlock financial blockage by approaching for project loan at your preferred bank.
Various banks & financial institutions offer project loan at competitive rates, compare| Search & Choose your ideal banking partner from evaluating all features whether its project Loan Interest Rate, processing fee, loan amount & much more. Just quote a request for further information.
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