CFOSurge India/Owner questions/Banking

Need a bank loan or a bigger limit? Prepare it the way a credit officer reads it.

A 3-minute check to see how your proposal will look to a bank, and what to fix first. The full guide is underneath.

The problem

You need a loan or a bigger limit, and the bank keeps asking for more or offering less.

The way out

Prepare it the way the bank reads it: reconciled books, tested projections, healthy ratios and clean conduct, eight weeks ahead.

The way out, step by step

Five steps to a loan proposal that gets approved

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★Sanctioned, on your timetable
Here now: the bank keeps saying not yet

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The full guide

Everything behind your answer, in detail

Read only the sections you need. Each one stands on its own.

Prepared by the CFOSurge India CFO team

The answer in brief

Banks decide on a loan from your numbers, your projections and your conduct. For working-capital limits they usually ask for CMA data: past and projected financial statements in a standard format, with ratios such as the current ratio, TOL/TNW and, for term loans, DSCR. A proposal gets approved faster when the books are reconciled, the projections are realistic and explained, the stock statements match the accounts, and the account conduct is clean. Prepare all of it eight weeks before you need the money.

On this page
  1. Questions first
  2. What banks look at
  3. Your ratios
  4. Check the proposal
  5. Six industry cases
  6. What to do now
  7. All year
  8. Mistakes to avoid
  9. Official sources
  10. Key terms
  11. Questions owners also ask
Stage 1 · Notice

Answer these questions before you read on

Commit to an answer before you open each one. Together they show where the problem is.

1When did you last look at your own balance sheet the way a credit officer would?

Banks read ratios first, story second.

2Do your stock statements match your audited accounts?

A gap between the two is the fastest way to lose a credit officer's trust.

3Can you explain, in one paragraph, why your projected sales are achievable?

Projections without reasons get cut.

4Has your CC account gone above drawing power in the last year?

Account conduct often matters as much as the numbers.

5How long before you need the money are you starting?

Weeks of preparation save months of back-and-forth.

A loan proposal is a document you control. Most rejections are about preparation, not the business.

Stage 2 · Understand

What a credit officer looks at

The numbers

Audited and provisional financials, ratios, and CMA data: an operating statement, balance sheet analysis, current assets and liabilities, the working-capital gap and fund flows.

The projections

Next year's sales, margins and working capital, with reasons a credit officer can test.

The conduct

Stock statements on time, no irregularity, cheques honoured, statutory dues paid, a clean credit report.

The security

Primary security on stock and receivables, collateral, and guarantees, as the bank's policy requires.

Stage 3 · Locate

Check your ratios the way a bank does

Check the ratios your bank checksFrom your balance sheet and P&L
Want a CFO to check these numbers? Send us your figures and we'll tell you what they mean for your business.Get a free review

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Free template
Drawing power checker (Excel)Work out your CC drawing power from your stock statement, the way your bank does.Download free →
Stage 4 · Verify

Check your proposal before the bank does

  1. Books reconciled and provisional accounts ready for the current year.
  2. Stock statements agree with the books.
  3. Projections explained line by line: orders, prices, capacity, margins.
  4. Working-capital need calculated by the method your bank uses (often the turnover method for smaller limits).
  5. Promoter contribution shown, and unsecured loans documented.
  6. Statutory dues and GST returns up to date.
  7. A one-page summary: what you need, why, and how it will be repaid.
Stage 5 · Compare

Six businesses, six versions of the same problem

The same problem looks different in every industry. Pick the business closest to yours:

These are composite businesses with illustrative figures, built to show how the method works. They are not CFOSurge client results.

Hover over a business for a preview (tap on a phone), then click to open the full case.

Stage 6 · Act

Prepare the proposal in eight weeks

  1. Weeks 1–2: close and reconcile the books; prepare provisional financials.
  2. Weeks 3–4: build projections with reasons; prepare CMA data.
  3. Week 5: fix weak ratios honestly: convert hardcore CC balances to a term loan, bring in promoter funds, clear statutory arrears.
  4. Week 6: write the one-page summary.
  5. Weeks 7–8: meet the branch and credit team with your CFO.
Renewal due in a few weeks? Submit provisional financials and an up-to-date stock statement now, and ask the branch what they need. Don't let the limit lapse.
Stage 7 · Prevent

Stay loan-ready all year

  1. Stock statements on time, matching the books.
  2. Quarterly provisional financials.
  3. No irregularity in the CC account.
  4. Projections updated every quarter.
  5. Diarise renewal dates eight weeks ahead.
Stage 8 · Avoid

Mistakes that sink loan proposals

  • Projections with no reasons behind them.
  • Stock statements that don't match the books.
  • Asking for more limit after the account goes irregular.
  • Hiding promoter loans or related-party balances.
  • Applying weeks before you need the money.
Reference

Official sources and guidance

Rules, rates and thresholds change. Check the current position at these official sources before acting.

Reference

Key terms in plain English

5 terms
CMA data
Credit Monitoring Arrangement data: standard past and projected statements banks use for working-capital assessment.
Current ratio
Current assets divided by current liabilities.
TOL/TNW
Total outside liabilities divided by tangible net worth.
DSCR
Debt service coverage ratio: cash profit available for debt service divided by principal and interest due.
Turnover method
A common way of assessing smaller MSE working-capital limits as a share of projected turnover.
Reference

Questions owners also ask

What documents do banks need for a business loan in India?

Typically audited financials, provisional current-year financials, CMA data with projections, stock statements, GST returns, bank statements, KYC, and details of security and existing loans.

What current ratio do banks expect?

Many banks look for around 1.33 or more for working-capital limits, but each bank and case differs.

How can I improve my chances?

Reconcile the books, make projections evidence-based, fix structural ratio problems, keep account conduct clean and apply early.

Want a CFO to work through this with you?

If you'd like your CMA data and loan proposal prepared and presented with you, A CFOSurge CFO can go through it with you using your actual numbers.

  • Plans from ₹50,000 a month, fixed after a free assessment
  • Free consultation with a senior CFO
  • No cost, no obligation
  • Pay nothing if you don't see value in the first 2 weeks

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CFOSurge India · General information only. It isn't financial, tax or legal advice for your circumstances. Worked examples use illustrative figures. · Follow us on YouTube · LinkedIn