project report

  Quick Answer If your stock statement shows less stock and receivables than your cash credit (CC) limit needs, your drawing power falls below the sanctioned limit. You can then withdraw only up to the drawing power, not the full limit. If you have already drawn more than that, the excess can be treated as an irregularity, and the bank may ask you to deposit funds, restrict the account or review the limit. Exact consequences depend on your sanction terms. Introduction A sanctioned CC limit is a ceiling, not a guaranteed balance. What you can actually use depends on the value of your current assets at that point in time. When business slows down or stock is sold off without being replaced, the stock statement shows a lower value, and the usable amount shrinks. Many owners notice this only when a cheque bounces or a withdrawal is refused. Knowing how the calculation works lets you plan ahead. At Sharda Associates , we prepare CA-certified project reports, CMA data and DPRs, and han...

Short answer: Yes, in many cases. A bank can sanction a term loan for machinery and a separate working capital limit, such as cash credit, in the same proposal. Some banks also offer a composite loan that covers both. But the two parts have different purposes, so you cannot freely use one for the other. Your sanction letter decides what each amount can be used for. Introduction Many business owners think of a loan as one lump sum. They plan to buy machinery, and whatever money is left they plan to use for raw material, salaries and daily expenses. When the bank sanctions the loan, they find that the amount was approved for a specific purpose and cannot be used any way they like. This is because machinery and working capital are two different needs. Machinery is a long-term asset and is repaid over years. Working capital is the money needed to run the business every day, and it moves up and down with your stock and sales. Banks assess and monitor them differently, even when both come i...

Short answer: Sometimes, yes. Some banks may count money you have already spent on plant and machinery, either as your own contribution (margin money) or, in a few cases, as an amount to be reimbursed. This depends on the bank's policy, the timing of the payment and your documents. Spending before sanction, without informing the bank, is risky. Introduction Many business owners do not wait for the loan. A supplier asks for an advance, a discount offer is about to end, or the machine is needed urgently, so they pay from their own pocket. Later they apply for a loan and ask: "Will the bank give me this money back?" The honest answer is "it depends". The bank wants to know that the money was actually spent on machinery that is part of the project. It also wants to be sure that the purchase was genuine and that nothing was financed twice. Banks that agree usually do so only after careful checking of bills and payment proof. At Sharda Associates , we prepare CA-cer...