A Project Loan is a type of funding provided to businesses or individuals for the development of specific projects such as real estate development, infrastructure construction, manufacturing plants, or other large-scale ventures. It is usually disbursed in stages based on the progress of the project and is secured against the assets of the project.

Advantages of Project Loan

  1. Customized Financing
    Tailored to meet the specific needs of a project, including equipment purchase, construction, or working capital.

  2. Large Loan Amount
    Suitable for funding large-scale or capital-intensive projects.

  3. Structured Disbursement
    Funds are released in phases based on the project's progress, ensuring better control over spending.

  4. Long Repayment Tenure
    Extended repayment periods (up to 10–15 years or more), helping manage cash flow.

  5. Promotes Business Growth
    Enables businesses to scale operations, expand infrastructure, or diversify into new sectors.

  6. Improved Cash Management
    Allows the borrower to manage working capital efficiently during the project's execution phase.

  7. Tax Benefits
    Interest on project loans is often tax-deductible as a business expense.

Eligibility Criteria

Eligibility can differ based on the type and scale of the project, but generally includes:

  1. Promoter/Business Profile

  2. Strong background and track record in similar projects or industry.

  3. Business Entity

  4. Proprietorship, Partnership Firm, LLP, Pvt. Ltd. or Ltd. Company.

  5. Project Feasibility

  6. A technically and financially viable project with clear cost estimates and revenue projections.

  7. Collateral

  8. Tangible assets or the project itself must be available as security.

  9. Creditworthiness

  10. Good credit history of the borrower or business.

  11. Contribution Margin

  12. Borrower must contribute a certain percentage (typically 20%–30%) of the total project cost.

  13. Regulatory Approvals

  14. All required licenses, clearances, and permits must be in place or in process.

Documents Required

Basic KYC Documents:

Identity Proof (PAN Card, Aadhaar, Passport)

Address Proof (Utility bills, Rent agreement, Passport)

Business Documents:

Business registration certificate

PAN card of business entity

Partnership deed/MOA & AOA (if applicable)

GST registration and filings

Financial Documents:

Last 3 years' audited financials (P&L statement, balance sheet)

Income Tax Returns of business and promoters (last 3 years)

Bank statements (last 6–12 months)

Project-Specific Documents:

Detailed Project Report (DPR) including:

Collateral documents

Quotations for equipment or material (if applicable)

Property ownership papers or lease agreements (if applicable)

Approvals and licenses (environmental, municipal, industry-specific)

Implementation schedule

Project cost and revenue projection

Technical and financial feasibility

Project overview and objectives