Most project reports that reach a bank are read for about four minutes before a view forms. The credit officer is not looking for your story. They are checking a small number of things, in a fixed order, and if those do not hold up the rest of the document does not get read carefully.
1. Debt Service Coverage Ratio
The first number they find. It answers one question: after everything else is paid, is there enough cash to service this loan, with room to spare? A DSCR that sits barely above 1 says the proposal survives only if nothing goes wrong, and nothing ever goes exactly right.
Lenders typically want comfortable coverage across the life of the loan, not just in the good years. If your DSCR dips below the line in year two because repayment starts before revenue ramps, they will see it — so either fix the structure with a moratorium or explain it before they ask.
2. Promoter contribution
How much of your own money is in this. It is read as a proxy for conviction, and a thin contribution invites the obvious question. It also matters that the source is demonstrable — funds that appear in the account a week before the application, from a source you cannot document, create a problem rather than solve one.
3. Whether the projections are connected to reality
Tie every projected increase to something physical. Machinery being bought with this loan, floor space being added, headcount being hired, an order in hand. A projection with a cause is a plan. A projection without one is a wish.
4. The cost of project and means of finance
These two have to balance to the rupee, and every line in the cost of project has to be supported — quotations for machinery, a registry or lease for land, an estimate for civil work. Round numbers with no backing get queried immediately.
5. Working capital, treated seriously
A term loan buys the asset. Working capital runs the business, and undercooking it is how funded projects fail. The report should show the operating cycle honestly — how long stock sits, how long customers take to pay, how long you take to pay suppliers — and ask for a limit that matches it.
What to leave out
- Market size figures lifted from a consulting report with no line to your own revenue.
- Pages of industry background the officer already knows.
- Best-case projections with no sensitivity analysis. Show what happens if revenue lands 20% lower.
- Anything that contradicts your filed returns. They will pull your GST and ITR data and reconcile it.
A good project report is short, internally consistent and defensible on every number. If you cannot explain a figure in a sentence, it should not be in the document.