BANK LOAN GUIDE
A bank does not lend to an idea. It lends to a Detailed Project Report (DPR) that shows who will buy, what it costs and how the loan will be repaid.
By ARS Market Research Services, Chennai. Useful for Mudra, PMEGP, CGTMSE and term loan applicants.
What is a DPR?
A Detailed Project Report is a written study of one project: the product, the market, the cost, the money needed and the expected earnings over the loan period. A branch manager or credit officer reads it to decide whether the project is viable and whether you can repay. It is longer and more numeric than a business plan, and most schemes such as MUDRA, PMEGP and CGTMSE-backed loans ask for one or a shorter project profile.
The 12 sections a bank expects
1. Applicant profile
Promoter background, experience, ID and Udyam registration.
2. Project summary
What you will make or sell, location, capacity and total cost in one page.
3. Market and demand
Who buys, how many, at what price. Field data beats copied statistics.
4. Product and process
How the product is made or the service delivered, step by step.
5. Machinery and site
Equipment list with quotations, land or rent proof and power or water needs.
6. Raw material and manpower
Suppliers, monthly requirement and staff with salaries.
7. Licences and approvals
Udyam, GST, trade licence, FSSAI or pollution consent where applicable.
8. Cost of project
Fixed assets plus working capital, split between your margin and the loan.
9. Means of finance
Promoter contribution, term loan, working capital limit and any subsidy.
10. Projected profit and loss
Sales, costs and profit for each loan year.
11. Cash flow and repayment
Month-wise cash and a repayment schedule, tested on a weak year.
12. Risks and mitigation
What can go wrong and what you will do about it.
The three numbers banks test first
| Test | What it asks |
|---|---|
| Debt Service Coverage Ratio (DSCR) | Does yearly cash profit cover the yearly loan instalments with room to spare? Many lenders look for well above 1. |
| Break-even point | How many sales do you need each month just to cover costs? Learn how to calculate it. |
| Promoter margin | How much of your own money is in the project? Skin in the game matters. |
Interest rates move, so rerun these numbers before you submit. Our note on the October 2026 repo rate and your DPR shows how.
Why banks return a DPR
- Sales copied from a friend’s business with no local evidence.
- Machinery costs without quotations.
- Working capital forgotten or understated.
- Cash flow that only works if everything goes right.
- Missing registrations or inconsistent figures between pages.
Do it yourself or take help?
A small project can use a bank template and your own figures. For a larger loan, or when the bank wants market evidence, an independent DPR with a field survey saves rounds of queries. Remember that no consultant can guarantee loan approval; the bank decides on the merits of the project.
Need a bank-ready DPR?
ARS Market Research Services prepares DPRs with local market evidence for Mudra, PMEGP, NEEDS, UYEGP and term loan applications in Chennai and across India. See our DPR service.
Our business books and reports
Our four practical guides explain licences, loans, schemes and low-investment ideas in plain language: see all books. For ready-made market reports, visit the ARS Marketplace.