CMA Data vs Project Report: Which One Does Your Bank Need?

CMA data is a set of financial tables that supports a working capital limit, mostly for a business that is already running. A project report is a full write-up with numbers that supports a term loan for a new unit or an expansion. Many loan files need both, with the CMA figures placed inside the report.

What is the real difference?

The two documents answer different questions. CMA data answers: how much money does this business need to run day to day, and how much of that should the bank fund? A project report answers: is this project worth funding at all, and can it repay?

So CMA data is all numbers, in a fixed set of forms. A project report has words as well as numbers. It explains who you are, what you will make or sell, who will buy it and what the project costs. For more on each, see what CMA data is and what a bank wants in a project report.

CMA data vs project report: side by side

Which loan needs which?

Working capital for an existing business

You need CMA data. The bank already has your history in your accounts and GST returns. It wants them in its own format, with the next two years projected. SBI, for example, asks for projected balance sheets for the next two years for working capital limits. A short covering note on the business is enough. A full project report is rarely asked for.

Term loan for an existing business

Buying a machine or adding a shed? The bank wants a project report for the new investment, with projections up to the end of the loan. It will also want your past figures, and many banks ask for those in CMA format. Union Bank of India's checklist for larger proposals lists both: CMA data with projections, and for a term loan a project report with cost of project, means of finance and supplier quotations.

A new business

There are no past accounts, so a CMA with empty past columns says little on its own. The project report carries the file. If you also want a cash credit limit from day one, the projected years are put into the CMA forms as well.

Mudra and other small loans

Mudra loans come in four categories: Shishu up to Rs 50,000, Kishore above Rs 50,000 and up to Rs 5 lakh, Tarun above Rs 5 lakh and up to Rs 10 lakh, and Tarun Plus above Rs 10 lakh and up to Rs 20 lakh. Tarun Plus is for those who have taken and repaid a Tarun loan.

For the smallest loans, the application form with a short statement of your activity and income is usually what the branch works from. As the amount rises, branches ask for a brief project report with a simple projection, mainly for machinery loans. Full CMA forms are less common at this size, but practice differs from branch to branch. Ask before you pay for anything.

Subsidy schemes such as PMEGP

Under the Prime Minister's Employment Generation Programme, the application is built around a project. The project cost eligible for subsidy is capped at Rs 50 lakh for manufacturing and Rs 20 lakh for a business or service unit. Your own contribution is 10% in the general category and 5% in the special categories. Here you need a project report.

When does the bank ask for both?

• One proposal has a term loan and a working capital limit together.
• An existing business is expanding, so the bank wants history in CMA format and the expansion in a report.
• The loan is large enough to go to a higher office, where files follow a fixed format.

In practice, the financial tables are prepared once. The same projections feed the CMA forms and the project report, so the numbers in both must be identical.

A worked example

You run a packaging unit. Sales last year were Rs 80 lakh, and you project Rs 90 lakh. You want a cash credit limit, and a Rs 10 lakh loan for a new printing machine quoted at Rs 13,50,000.

1. Cash credit. RBI's FAQ on MSME lending says working capital limits up to Rs 5 crore are computed at a minimum of 20% of estimated turnover. 20% of Rs 90,00,000 is Rs 18,00,000. This part needs CMA data.
2. Machine loan. Cost Rs 13,50,000, loan Rs 10,00,000, your share Rs 3,50,000. This part needs a short project report: what the machine adds to sales, and whether cash profit covers the new instalments.
3. One set of numbers. The extra sales from the machine must appear in the Rs 90 lakh used for the CMA. If the report says Rs 1 crore and the CMA says Rs 90 lakh, the file comes back.

The mistake people usually make

The usual mistake is to get one document made because a friend's bank asked for it, and then find your branch wants the other. A CMA is prepared for a machinery loan when the officer wanted a project report, or a long report is written for a simple renewal.

The second mistake is two documents made by two people, with different sales, profit or loan figures. Bankers cross-check. A mismatch costs you a round of queries, and sometimes the officer's trust in every other number.

What should you do? Ask the branch three questions before you start. Which document do you need? Do you have your own format? For how many years do you want projections? Get the answers on email or WhatsApp if you can.

Frequently asked questions

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