projections for bank loans purposes

[Sundaraiah kollipara]

sir,

A Small business person rs:10 lacs bank cc loan required but bank manager two years balance sheet and profit and loss projections asked for loan purposes.

Question: two years how much sale turnover and capital showing for bank loan purposes and loan calculted procedure.

AI Summary

Turnover-based eligibility for cash credit: demonstrate sufficient annual sales, stable profits and owner capital to secure limits.
Banks grant Cash Credit limits based on two years' Balance Sheets and P&L, commonly applying a Turnover Method (CC 20% of annual sales), requiring turnover near fifty-sixty lakh for a ten lakh CC, sustained net profit margins (circa 8-15%), and owner capital contribution of about 25-30% of working capital; alternatively banks compute drawing power from stock and receivables after prescribed bank margins. Required documents include two years' financials, ITR, GST/sales proofs, recent bank statements, stock statements and KYC.