Why Project Report for Bank Loan is rejected by Banks?

The Project report for bank Loan consists details and projection of business future years Assets, Liabilities, Profit & Loss Account, Fund Flow, Debt Repayment Capacity and Financial Ratios. Here is details of particulars in project report for Bank Loan-

Assets:

There are two types of Assets shown in project report for Bank loan –

Fixed Assets:

The assets that business plans to use for long term and more than 12 months in life for Example- Furniture, Machinery, Vehicles etc.

Current Asset:

The assets that business plans to use for short Term and less than 12 months in life for Example: Stock, Receivables, Bank Balances etc.

Liabilities:

The Liability part is divided in three parts in project report for loan which are as follows-

Capital Fund:

This is fund introduced by owner of firm which can be Proprietor, Partnership firm, Pvt Ltd or Public Ltd Company.

Long Term Liabilities:

The long term liabilities are liabilities which are payable after period of 12 months for Example- Bank Term Loan, Any other Loan etc.

Current Liabilities:

The current liabilities are liabilities which are payable within 12 months for example Vendor Payables, Salary Payable, etc.