BankKeeping

  For a borrower to submit CMA Data (Credit Monitoring Arrangement) to a bank, the following documents are typically required to provide a comprehensive financial overview and support the loan assessment process: 1. Financial Statements Audited Balance Sheet : A statement of the borrower’s financial position, detailing assets, liabilities, and equity. Profit & Loss (P&L) Statement : A statement that outlines the company’s revenues, expenses, and profit over a specific period. Cash Flow Statement : A report showing the inflows and outflows of cash within the business, which helps in evaluating liquidity. 2. Tax Returns Income Tax Returns (ITR) : Copies of the last 2–3 years of tax returns filed by the business and its directors. This provides additional verification of income. 3. Project Report (if applicable) Detailed Project Report (DPR) : If the loan is intended for a specific project or capit...

  To secure a larger loan with the same collateral, a few strategies and steps can be taken to improve the chances of obtaining a higher loan amount. Here are some key approaches: 1. Increase the Valuation of the Collateral Appraisal : Ensure that the collateral is appraised at its highest possible value. This may involve getting an updated, accurate, and professional valuation, especially for real estate or equipment. If the collateral has appreciated or increased in value over time, an updated appraisal could justify a larger loan. Asset Improvement : If possible, improve or enhance the value of the collateral. For example, if you’re using property as collateral, adding improvements like renovations or upgrades could increase its market value. 2. Offer Multiple Collateral Types Diversification : Instead of relying on a single type of collateral (e.g., real estate), offer a combination of assets. You might offer inve...

  In today’s business world, financial struggles and resource management challenges are common, especially for small businesses. Lack of adequate financial resources can hinder growth, delay payments, or increase debt, putting the business's survival at risk. A bank guarantee is a solution that helps businesses navigate these challenges by offering an assurance of repayment in the event of default. What is a Bank Guarantee ? A bank guarantee is a promise made by a bank to cover the financial obligation of a borrower if they fail to meet the terms of a contract. It serves as a security measure, assuring the creditor that they will be compensated if the debtor defaults. This tool is especially useful for businesses that struggle to access funds or face high-risk situations. Apart from a bank an NBFC can also issue bank guarantee. For instance, when a small vendor enters into a contract to supply machine parts to a large company, the vendor might obtain a bank guarantee. If the...

  CMA Data (Credit Monitoring Arrangement) Meaning: is a set of financial data provided by a company to its lenders (usually banks) to evaluate the company’s financial health and assess its creditworthiness. CMA Data (Credit Monitoring Arrangement) is a key document used by banks to determine the loan eligibility, limits, and repayment capacity of a business. Importance of CMA Data: Loan Sanctioning: Banks and financial institutions use CMA data to assess the financial stability and creditworthiness of a business before approving loans or credit limits. Risk Assessment: It helps lenders identify financial risks and determine the ability of the borrower to repay the loan. Working Capital Limits : CMA data is primarily used to set limits for working capital financing based on the company's short-term financial position. Performance Evaluation: It provides insights into a company's financial performance, s...