Want to apply for a business loan? The CMA report for bank loans is one of the important documents needed by the banks. RBI guidelines suggest that more than 85% of business loans with an amount of 2 crores and above will need a proper submission of CMA data. This report (Credit Monitoring Arrangement) assists banks to evaluate the financial status of your business, your capacity to repay loans and the growth of your business. It contains the history of your business, present status and future financials. It might sound technical but it is easy to prepare a CMA report when you know what to put in there. In this blog, we will take you through the step by step process of coming up with a professional CMA report for bank loans that banks will trust.

What is the CMA Report of Bank Loans?

A CMA report for bank loans (Credit Monitoring Arrangement report) is a detailed financial report that banks insist on before deciding to give a loan to a borrower, particularly term loans and working capital. It gives historical, present and future financial accounts, which assist the banks in determining the repayment capacity of the borrower.

It is also referred to as a CMA project report and is normally composed of income statements, balance sheets, cash flow statements and loan repayment schedules.

The CMA Data for Bank Loan is made in a tabular form called the CMA data format in banking which is in accordance with the RBI norms. This includes:

  • Audited financials of the last 2-3 years of performance
  • Current financials
  • Projections (3-5 years)
  • Loan demand and utilization scheme
  • Assumptions and ratio analysis

Thus, when you ask yourself, what is CMA data format, the answer is that it is merely the standard format that is used to arrange financial data to evaluate the loan, and it allows the banks to analyze your application in an effective way.

How to Prepare a CMA Report for Bank Loans

CMA report also known as the Credit Monitoring Arrangement report. It is the report showing the projected performance and the past performance of a business in financial terms to obtain a bank loan. A CMA report compiles all the required financial ratios and metrics for a bank loan. Therefore it helps bankers obtain the financial health of a business. Part of the necessary documentation required by businesses compiles the past performance of the same, as well as future projections in a specific format that allows invested stakeholders to quickly assess the financial health of the undertaking.

Finline will help you with the CMA report for bank loan preparation very easily through our automated software. For preparing a CMA report for a bank loan in Finline, you don’t need any knowledge of finance or accounting. Our artificial intelligence software will perform the rest of the complex calculations with high precision. Finline is known as the best tool for creating CMA reports and project reports in India.

What statements are included in the CMA project report for bank loans?

  • Operating Statement: This indicates the borrower’s business plan showing the Current Sales, profit before & after-tax, sales projections, direct & indirect expenses, and profit position for 3 to 5 years.
  • Analysis of Balance sheet: This statement contains an analysis of the current & projected financial years. Also, it helps in providing a comprehensive analysis of current & non-current assets, current & non-current liabilities, and cash & bank position of the borrower. This statement also specifies the net worth position of the borrower for the future projected years.
  • Comparative statement of current asset and current liability: This analysis helps to decide the capacity of the borrower to meet the working capital requirements. It will also help in deciding the actual working capital cycle for the projected period.
  • Calculation of ABF/MPBF: This includes a calculation that indicates the Asset Based Finance and Maximum Permissible Bank Finance. Also, it shows the borrower’s capacity to borrow money.
  • Cashflow statement: The main objective of this statement is to capture the movement of the fund for the given period.
  • Ratios: This indicates the financial strength of the unit at different parameters

If you need an expert to do the CMA project report for bank loans, our team can also prepare the same for you, please fill out the form for our agent to contact and discuss in detail.

How can Finline assist you to generate CMA Reports for Bank loans?

A CMA report for bank loans is an important requirement in obtaining finances to fund your business. An accurate and clear report assists the banks in determining your financial stability and it increases your chances of getting a loan. However, in case you do not know how to start or you need to format it properly, you should not be worried as Finline is here to help.

Finline is a simple  platform that assists you to generate professional, bank ready CMA reports within a few clicks. Finline is trusted by thousands of entrepreneurs in India, and your report will correspond to all banking standards. Give it a go today and be a step nearer to your loan approval. Create your CMA Report for Bank Loans Today!

CMA Report for Bank Loans FAQs

A CMA (Credit Monitoring Arrangement) Report refers to a financial report requested by banks when you are applying to take a business loan. It presents your future, present and past financial information. This assists the bank to determine whether your business is in a position to repay the loan. It is particularly required in cases of large loans that are more than 2 crores.

To prepare a CMA report, you should prepare your old financial statements (2-3 years), present financial statements and estimates of the following 3-5 years. You should add your income, expenses, assets, loan plans and repayment mode. That may sound difficult but with the aid of  platforms such as Finline, you can easily make a complete CMA report.

A typical CMA report will include:

  • Historical revenues and costs
  • Present economic condition
  • Future business plans and income
  • The amount of loan required and the purpose of use of the loan.
  • Your lending strategy on how to repay the loan

This report presents the bank with an entire picture of your business.

Yes, you can prepare an Excel-based CMA report. You will have to draw up sheets for income, balance sheet, cash flow, loan needs, and repayment schedule. But for this, one also needs a lot of time and knowledge of accounting. Using Finline would certainly be an easier option as it gives you a ready-to-use report accepted by banks.

Maximum Permissible Bank Finance (MPBF) refers to the highest allowable lending amount that a bank can give to a businessman on the basis of business possibilities. It is computed by analyzing the assets of the business which may collateralize the facility, the amount of current debt outstanding, and the amount required by the business concerned to carry on operations. 

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