Types of Provisionals (Current Year Unaudited Statements)

1. Provisional Balance Sheet

• Assets, liabilities, equity, outstanding loans
• Shows current financial position

2. Provisional Profit & Loss Account

• Sales, purchases, operating expenses, depreciation, net profit
• Shows business performance so far in the year

3. Provisional Cash Flow Statement (optional, if asked by bank)

• Cash inflows (sales, loan drawdowns)
• Cash outflows (expenses, loan repayments, investments)

4. Provisional Schedules / Annexures

• Debtors list & aging (outstanding receivables)
• Creditors list & aging (outstanding payables)
• Inventory statement (raw materials, WIP, finished goods)

Use: For CMA data & loan renewal, banks need updated Provisionals till the latest quarter/month.

Types of Projections (Future Estimates)

1. Projected Balance Sheet

• Shows expected financial position year by year
• Includes future capital investments, loan repayment, equity build-up

2. Projected Profit & Loss Account

• Expected sales growth, expenses, gross & net profit
• Helps banks estimate profitability and sustainability

3. Projected Cash Flow Statement

• Future cash inflows & outflows
• Crucial for assessing liquidity & repayment ability

4. Projected Fund Flow Statement

• Sources of funds (capital, loans, retained earnings)
• Application of funds (fixed assets, working capital, debt repayment)

5. Projected Loan Repayment Schedule

• EMI-wise or year-wise breakup of principal & interest
• Helps banks assess DSCR (Debt Service Coverage Ratio)

6. Projected Ratios / Financial Indicators

• DSCR, Current Ratio, Debt-Equity Ratio, Profitability Ratios
• Banks use these to judge creditworthiness

Documents Required for Provisionals (Current Year, Unaudited)

1. Business Financial Records

• Trial Balance (latest)
• General Ledger & Cash Book
• Sales & Purchase registers
• GST returns (GSTR-1, GSTR-3B) for latest months
• TDS challans/returns (if applicable)

2. Banking Records

• Latest 6-12 months bank statements
• Loan account statements (if already availed)

3. Supporting Schedules

• Debtors list with aging analysis
• Creditors list with aging analysis
• Stock/inventory statement (RM, WIP, FG)
• Fixed asset register (if applicable)

Documents Required for Projections (Future Estimates)

1. Historical Data (as base)

• Last 2-3 years audited financial statements (Balance Sheet, P&L, Cash Flow)
• Past sales & purchase data
• Income Tax returns (business + promoters)

2. Business Plans & Assumptions

• Sales growth forecast (market reports, past trends, demand analysis)
• Cost estimates (raw material, wages, overheads)
• Capacity utilization plan (if manufacturing)
• Loan repayment schedule & interest rate assumptions

3. Project-Specific Documents (for DPR)

• Machinery/plant quotations from suppliers
• Land & building cost estimates
• Licenses/approvals (if industry-specific)
• Market survey reports

Eligibility for Provisionals
Who is Eligible?

1. Existing Businesses / Firms / Companies

• Must have books of accounts (ledger, trial balance, GST returns, sales/purchase registers).
• Should be maintaining regular banking transactions.
• Typically applicable for businesses older than 1 year.

2. Individuals / Proprietors

• If already running a business with GST or bank-recorded transactions.
• Not applicable for someone who has not yet started operations.

In short: Only ongoing businesses with current-year financial activity are eligible to submit Provisionals.

Eligibility for Projections
Who is Eligible?

1. New Entrepreneurs / Startups

• Can prepare projections even without past financials.
• Eligibility depends on having:
• A viable project/business plan
• Promoter KYC (PAN, Aadhaar)
• Own contribution (margin money)

2. Existing Businesses

• Must provide last 2–3 years audited financials as the base for projections.
• Banks require projections to cover loan tenure (usually 3–7 years).
• Promoter’s CIBIL score (650–700+) is considered in eligibility.

3. For CMA Data

• Existing borrowers ? submit Provisionals + Projections for loan renewal/enhancement.
• New borrowers ? submit only Projections, since no current-year operations exist yet.

In short: Anyone planning a new project or already running a business is eligible to prepare projections.
Banks will check whether the assumptions are realistic and whether the business can repay loans.

Advantages of Provisionals (Current Year Unaudited Statements)

1. Latest Financial Snapshot

• Banks don't rely only on last year's audited statements (which may be outdated).
• Provisionals give a real-time picture of your financial health.

2. Faster Loan Processing

• Having updated provisionals makes it easier for banks to assess loan renewal/enhancement quickly.

3. Supports Working Capital Sanction

• Helps banks see if you have sufficient stock, receivables, and liquidity to justify a working capital limit.

4. Transparency & Credibility

• Shows that the business maintains proper books and is financially disciplined.

Advantages of Projections (Future Estimates)

1. Loan Approval & Sanction

• Banks require projections to check your repayment capacity over the loan tenure.
• A good projection builds confidence that your business will generate enough profits.

2. Planning Tool for Business

• Helps promoters plan sales targets, cost control, cash flows, and investments.
• Works as a roadmap for future growth.

3. Shows Viability of Project

• In DPR, projections prove that the project is financially viable.
• Essential for subsidy-based and government scheme approvals.

4. Helps Ratio Analysis

• Banks calculate DSCR, Current Ratio, Debt-Equity, etc. from projections.
• Strong ratios increase chances of loan sanction.

5. Attracts Investors

• Investors/VCs also rely on projections before funding startups or expansions.