Broadly there are two different types of financing: Term loans and Cash credits. Both are banking instruments that lends money to borrowers, but they have different definitions and goals.

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CA for project report of Cash Credit

Term loan is given only for the purpose acquisition of some asset. (It is important to note that from a term loan you can’t acquire any stock, land or pay your stock creditors)

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Documents required by a CA for project report of Cash Credit

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1. Estimated Projected of 3-5 year showing amount of sanctioned limit (Usually it is 25% of estimated turnover of the entity, where 5% belongs to borrower margin). The data should have actual audited data, estimated for the current year and projected data for the future.

 

2. KYC and other documents (as mentioned above) required by CA for project report of Cash Credit KYC is the basic documents, that banks need for processing the loan amount like

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• Certificate of Incorporation

• Partnership/ Trust/ Society deed

• Address proof (like rent agreement, consent, Aadhar, Trade License, other industry specific license and approvals etc)

•  PAN Card

•  Udyam Registration (If Available)

•  If the project is enhancement of previous project or the entity has any other previous background then

•  Last FY Bank statements

•  Last 3 filed ITR Copy

•  Last 3 signed audited financials

•  Last 12 GST return copy​

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Note: once the CC is issued the bank requires monthly stock statement duly certified, till the time CC is availed. Also, the CC has to be renewed every year.
Here the borrower will have to buy stamp papers for hypothecation of the purchased assets and creating deed of the security given as collateral.
Apart from above, in both the loan, Insurance of the assets are compulsory.