| PARTICULARS | DETAILS |
| Industry | Hospitality & Event Venue |
| Location | Semi-Urban Belt, Madhya Pradesh |
| Business Age | New Project (Promoter has 8 years in related catering business) |
| Annual Turnover | ₹38 Lakh (existing catering business, FY 2023-24, verified through GST records) |
| Loan Requirement | ₹1.6 Crore Project Finance for banquet hall construction |
| Bank Applied | Nationalised Bank – Central India Branch |
| Previous Status | Feasibility report rejected twice — occupancy/booking assumptions not benchmarked, seasonality ignored |
THE PROBLEM
The promoter, an established caterer, wanted to build a 500-guest capacity banquet hall to capture wedding and event bookings directly rather than only providing catering services to other venues. Two prior feasibility reports had been rejected:
Problem #1 – Booking Assumption Not Benchmarked: The first feasibility report projected 18 bookings/month from Year 1 — a figure with no reference to actual booking volumes at comparable banquet halls in the same locality. The bank rejected it as arbitrary.
Problem #2 – Seasonality Ignored: The second report fixed the booking count but spread it evenly across all 12 months. Wedding-season venues typically see 60-70% of annual bookings concentrated in 4-5 months (November-February, April-May), and a flat monthly assumption gave the bank no way to assess whether the project could cover EMIs during the 6-7 lean months.
OUR APPROACH — Step-by-Step Feasibility Report Preparation
Step 1 – Root Cause Analysis
Our senior CA reviewed both rejected reports line-by-line. Key issues identified: no benchmarking against the 3 existing banquet halls within a 10 km radius; no seasonal booking curve; and no linkage between the promoter’s existing catering client base and the new venue’s likely early bookings.
Step 2 – Market & Financial Reconstruction
We collected 3 years of ITRs from the existing catering business, conducted a benchmarking survey of 3 comparable banquet halls (average bookings/month, seasonal split, rental rates), and gathered construction cost quotations.
Step 3 – Realistic Projection Building
Instead of assuming flat, aggressive bookings, we built a seasonal booking model: peak season (Nov-Feb, Apr-May) at 10-12 bookings/month, off-season at 3-4 bookings/month, phased at 60% of full target in Year 1 rising to 85% by Year 3. Year 1: ₹1.15 Cr | Year 2: ₹1.48 Cr | Year 3: ₹1.72 Cr.
Step 4 – DSCR Engineering
With seasonal cash flow correctly modeled and interest loaded on the actual construction-linked disbursement schedule, Net Cash Accruals rose to ₹19.4L in Year 1, rising to ₹31.8L by Year 3. DSCR: 1.29 (Y1) → 1.71 (Y2) → 2.05 (Y3) — all comfortably above 1.25.
Step 5 – Cross-Verification with Existing Business
The promoter’s existing catering client relationships (documented via 3 years of billing data) were shown as a direct early-booking pipeline for the new venue, strengthening the Year 1 assumption’s credibility.
Step 6 – Bank Submission Support
Our CA personally attended the pre-sanction meeting and addressed the credit committee’s 6 queries on seasonal cash flow coverage during lean months on the same day.
KEY FINANCIAL DATA — Feasibility Report Summary
| METRIC | FY 2023-24 (ACTUAL – catering) | YEAR 1 (PROJECTED) | YEAR 2 (PROJECTED) | YEAR 3 (PROJECTED) |
| Annual Revenue | ₹38,00,000 | ₹1,15,00,000 | ₹1,48,00,000 | ₹1,72,00,000 |
| Gross Profit | ₹9,50,000 (25%) | ₹34,50,000 (30%) | ₹47,36,000 (32%) | ₹58,48,000 (34%) |
| Net Profit (PAT) | ₹4,56,000 (12%) | ₹15,64,000 (13.6%) | ₹22,20,000 (15%) | ₹28,90,000 (16.8%) |
| Net Cash Accruals | ₹5,20,000 | ₹19,40,000 | ₹26,50,000 | ₹31,80,000 |
| DSCR | – | 1.29 ✓ | 1.71 ✓ | 2.05 ✓ |
| Current Ratio | 1.3 | 1.6 ✓ | 1.9 ✓ | 2.2 ✓ |
| Debt-to-Equity Ratio | 0.6 | 1.8 ✓ | 1.4 ✓ | 1.0 ✓ |
| Project Finance Eligibility | – | ₹1,60,00,000 | ₹1,60,00,000 | ₹1,60,00,000 |
THE RESULT
LOAN SANCTIONED — Rs. 1.6 CRORE PROJECT FINANCE APPROVED
| PARAMETER | DETAILS |
| Amount Sanctioned | ₹1.6 Crore Project Finance – Full applied amount approved |
| Processing Time | 31 working days from document submission to sanction letter |
| Interest Rate | 11.25% p.a. (MCLR-linked) due to strong seasonal DSCR modeling |
| Bank Queries | 6 queries raised, all resolved within 24 hours by our CA team |
| Previous Rejections | Two earlier rejections successfully overturned through seasonal booking model and benchmarking survey |
| Client Impact | Banquet hall construction commenced, 8 advance bookings secured pre-launch through existing catering client base |