Project Report Format For Bank Loan

Mentioned below is the standard format for preparing

Project Report for Bank Loan:
1. Introductory Page
2. Summary of the project
3. Details about the Promoters, their educational
qualifications, work experience, etc.
4. Current Status of the Bank, its products and services,
target market, and activities.
5. Employees, details about the top management, their
educational qualifications, work experience, etc.
6. Infrastructure facilities, tools deployed, operational
premises, machinery, etc.
7. Customers, details about them as well as prospective
customers
8. Regional Operations
9. Fiscal acquisitions and tie-ups
10.

Means of Financing

11.

Balance Sheet

12.

Profit and Loss Statements

13.

Fund Flow Statement

14.

Chief Ratios

15.

Break Even Point Evaluations

16.

Conclusions

In finance, a loan is the lending of money from one

individual, organization or entity to another individual,
organization or entity. A loan is a debt provided by an
entity (organization or individual) to another entity at an
interest rate, and evidenced by a promissory note which
specifies, among other things, the principal amount of
money borrowed, the interest rate the lender is charging,
and date of repayment. A loan entails the reallocation of
the subject asset(s) for a period of time, between the
lender and the borrower.
In a loan, the borrower initially receives or borrows an
amount of money, called the principal, from the lender,
and is obligated to pay back or repay an equal amount of
money to the lender at a later time.

The loan is generally provided at a cost, referred to as

interest on the debt, which provides an incentive for the
lender to engage in the loan. In a legal loan, each of these
obligations and restrictions is enforced by contract, which
can also place the borrower under additional restrictions
known as loan covenants. Although this article focuses on
monetary loans, in practice any material object might be
lent.
Acting as a provider of loans is one of the principal tasks
for financial institutions such as banks and credit card
companies. For other institutions, issuing of debt
contracts such as bonds is a typical source of funding.

Types
Secured
See also: Loan guarantee

A secured loan is a loan in which the borrower pledges some asset (e.g. a
car or property) as collateral.
A mortgage loan is a very common type of loan, used by many
individuals to purchase things. In this arrangement, the money is used to
purchase the property. The financial institution, however, is given
security a lien on the title to the house until the mortgage is paid off
in full. If the borrower defaults on the loan, the bank would have the
legal right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be
secured by the car, in much the same way as a mortgage is secured by
housing. The duration of the loan period is considerably shorter often
corresponding to the useful life of the car. There are two types of auto
loans, direct and indirect. A direct auto loan is where a bank gives the
loan directly to a consumer. An indirect auto loan is where a car
dealership acts as an intermediary between the bank or financial
institution and the consumer.
Unsecured

Unsecured loans are monetary loans that are not secured against the
borrower's assets. These may be available from financial institutions
under many different guises or marketing packages:
credit card debt
personal loans
bank overdrafts
credit facilities or lines of credit
corporate bonds (may be secured or unsecured)
peer-to-peer lending

The interest rates applicable to these different forms may vary depending
on the lender and the borrower. These may or may not be regulated by
law. In the United Kingdom, when applied to individuals, these may
come under the Consumer Credit Act 1974.
Interest rates on unsecured loans are nearly always higher than for
secured loans, because an unsecured lender's options for recourse against
the borrower in the event of default are severely limited. An unsecured

lender must sue the borrower, obtain a money judgment for breach of
contract, and then pursue execution of the judgment against the
borrower's unencumbered assets (that is, the ones not already pledged to
secured lenders). In insolvency proceedings, secured lenders
traditionally have priority over unsecured lenders when a court divides
up the borrower's assets. Thus, a higher interest rate reflects the
additional risk that in the event of insolvency, the debt may be
uncollectible.

Features of Bank Loans:

Bank loans have the following characteristics:
1. It is a short-term source of finance.
2. A bank loan may be either secured or unsecured depending
upon the circumstances.
3. The interest charged by the bank on such a loan may be either fixed or
variable.
4. If mortgage loan is to be obtained, the borrower has to pay a number
of fees such as title searching fees, application fees, inspection fees, etc.
Advantages of Bank Loans:
Bank loans offer the following advantages:
1. They can be easily procured.
2. They can be used for short-term as well as medium-term financing.

3. Interest paid on a bank loan is a tax deductible expenditure

Disadvantages of Bank Loans:

The disadvantages of bank loans are:
i. Some bank loans carry prepayment penalty.
ii. Borrowing too much as a bank loan can lead to decreased cash flow.
iii. In most cases, the bank does not disburse the whole amount of loan
applied for, it pays cash lower than the loan demanded.
Sources of Bank Loans

A bank loan is an amount of money borrowed for a set period within an

agreed repayment schedule. The repayment amount will depend on the
size and duration of the loan and the rate of interest.
Many businesses use bank loans as a suitable part of their financial
structure. In fact, bank loans tend to be more available for wellestablished and growing businesses rather than start-up businesses.
The reason for this is risk banks prefer to loan to businesses with an
established track record of profitability, which makes them more
likely to be able to repay the loan and interest.
If a bank loan can be obtained, then there are several advantages for a
growing business:
The business is guaranteed the money for a certain period generally three to ten years (unless it breaches the loan conditions)

 Loans can be matched to the lifetime of the equipment or other

assets the loan is for
While interest must be paid on the loan, there is no need to provide
the bank with a share in the business
Interest rates may be fixed for the term, making it easier to forecast
interest payments
The main disadvantage of a bank loan is the security that usually has to
be given to the bank over the assets of the business. The bank becomes a
secured creditor with collateral over the business assets. If the business
fails, then the bank has first call on what is left (before the shareholders).
Another disadvantage of a bank loan is it's relatively lack of flexibility.
A growing business might take a loan out for 500,00 but finds it only
needed 250,000. That means that interest is being paid on 250,000 of
excess finance.