Project Report for Term Loan

Itemised cost of what's being financed (machinery with quotations, construction estimates), the means of finance (loan amount vs promoter's contribution), revenue/cost projections reflecting the specific impact of the investment, a repayment schedule, DSCR above 1.25 in every repayment year, and break-even analysis.

In most cases, yes — banks use it as the primary basis to assess project viability and repayment capacity before sanctioning the loan

Commonly 60-75% of project cost, with the balance as promoter's contribution (margin money) — though exact percentages vary by bank, loan category, and whether a scheme like PMEGP (with its own subsidy and margin structure) is involved. The project report's means-of-finance section should reflect a realistic split for your specific situation.

DSCR (Debt Service Coverage Ratio) measures whether the cash flow generated is sufficient to cover loan repayment (principal + interest) — calculated for each year of the repayment period. A DSCR below 1.25 in any year is a common reason banks reject or query term loan applications, as it suggests repayment capacity is too tight in that year.

It's good practice and often expected — a term loan for machinery with, say, a 10-year useful life is more naturally structured with a repayment tenure that doesn't far exceed that life (the asset shouldn't be fully depreciated/obsolete while loan repayment continues). The project report's repayment schedule should reflect this alignment.

They can be applied for together, and while they serve different purposes (term loan for the capital asset, working capital/CMA for the operating cycle), the financial projections need to be consistent across both — the same projected revenue/profit figures should support both the term loan's DSCR and the working capital assessment. We can prepare both together as a coordinated application.