Services
Term Loan Proposals
A term loan finances the fixed assets of a new or expanding unit: land development, building, plant and machinery, and pre-operative costs. The proposal has to show that the project is properly costed, adequately funded by the promoter, and able to repay from its own cash flows.
Building the cost of project and means of finance
| Cost of project | Means of finance |
|---|---|
| Land and site development | Promoter contribution (equity / capital) |
| Building and civil works | Term loan from bank |
| Plant and machinery, electricals, utilities | Unsecured loans from promoters, subordinated to the bank |
| Misc. fixed assets, pre-operative and preliminary expenses | Capital subsidy, where eligible (usually back-ended) |
| Contingencies and margin money for working capital | Internal accruals for expansion projects |
Every line is supported by quotations, estimates or agreements. A back-ended subsidy cannot be counted as day-one funding; the bank will want to see how the gap is bridged until it is received.
What the proposal includes
- Security structure: primary security over assets financed, collateral or credit guarantee cover, and guarantees, proposed in a way that matches the lender's policy.
- Repayment schedule: moratorium aligned with implementation and stabilisation, and instalments the projected cash flows can carry.
- Debt service coverage: average and minimum DSCR over the loan tenure, with sensitivity to lower capacity, lower prices and higher input costs.
- Approvals status: which approvals are in hand and the schedule for the rest. See industrial approvals.
- Incentive map: state and central schemes applied for or planned, and their effect on cash flows. See subsidy schemes.
Linked services
Most term loan proposals are accompanied by a bank-grade DPR and a working capital assessment. For loans to micro and small enterprises without collateral, see CGTMSE.
Want a structured view of your project?
Share the outline. We review it against our five-step approach and come back with the incentive scope, viability risks and capital gaps we see.