CMA Report Preparation
CMA report is often requested by Bankers while sanctioning or renewing credit facilities.
MA stands for Credit Monitoring Arrangement report wherein the past and projected financial performance of a business is compiled in a certain format with all the required financial metrics and ratios to help Bankers and Financial Analysts ascertain the financial health of a business. Most Bankers request a business loan applicant to prepare CMA report to understand the flow and application of funds in a business. A professionally prepared CMA report can improve the chances of obtaining bank loan.
Different Types of Bank Loan Facilities
Term loan is sanctioned by Banks for purchase of fixed assets like land, building, equipment and other types of assets. Repayment is fixed over a period of 5 years with EMI payments or bullet payments.
Working capital loan is sanctioned by Banks for working capital purposes like holding of inventory, receivables and build-up of other current assets in a business. Working capital facilities are renewable every year.
Bank guarantee is a promise from a bank that the liabilities of a party will be met by the Bank in the event that the party fails to fulfill contractual obligations. Bank guarantees are typically requested while executing large projects.
Letter of Credit
Letter of credit is a type of facility from a Bank guaranteeing a buyer's payment to a seller, in the event that the buyer is unable to make payment on the purchase as per terms of the transaction.
Mortgage loans are loans that are backed by real property by putting a lien on the property being mortgaged. The funds generated from a mortgage loan can be used by the business for any purpose.