Why does the bank ask for a project report when taking out a business loan? – A comprehensive view | Overview on Project Report for a Business Loan bank explainer

Normally when going for a loan from a bank, it is customary for the customer to ask for collateral security in return for the loan and see the KYC. If the customer is applying for a loan to start a business, the bank will ask for a project report called Project Report on the business to be started with Margin, Collateral Security and KYC.

The report should inform the client about the business to be started, the opportunities for it, the potential for profitability etc. Soma.Veerappan, a writer and former general manager of the Punjab National Bank, explains in detail how to determine the industry before it starts, that is, how to prepare the project appraisal report and what the bank expects from it.