A project loan is a type of financing provided for the development and execution of large-scale projects, often in sectors like construction, infrastructure, energy, manufacturing, or real estate development. These loans are typically secured by the project’s assets and expected cash flows, rather than the balance sheet of the project sponsor.

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✅ Key Features of a Project Loan:

Purpose-Specific: Funds are used exclusively for the project.

Repayment: Based on future cash flow from the project (not existing business revenues).

High Capital Requirement: Used for large projects needing significant investment.

Tenure: Medium to long-term (often 5–20 years).

Security: Includes the project’s assets, contracts, and sometimes the sponsor’s guarantees.

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📑 Commonly Required Documents for a Project Loan:

1. Business Documents

Company profile or background

Certificate of incorporation/registration

Memorandum & Articles of Association

Board resolution for borrowing

Details of promoters and directors (KYC, PAN, Aadhar, etc.)

2. Project-Related Documents

Detailed Project Report (DPR) including:

Project scope and description

Technical feasibility

Market analysis and demand estimation

Cost estimates and implementation schedule

Revenue projections

Project implementation plan or Gantt chart

Approvals and licenses (e.g., environmental clearance, land approvals)

Contracts or agreements (EPC contracts, supply agreements, etc.)

3. Financial Documents

Projected financial statements (P&L, balance sheet, cash flows)

Break-even analysis and IRR/NPV calculations

Promoter’s financials (personal and business)

Last 3 years’ audited financials (if applicable)

Bank statements (last 6–12 months)

4. Collateral Documents

Property documents (title deed, valuation, encumbrance certificate)

Details of assets offered as collateral

Hypothecation details (if movable assets are pledged)

5. Legal Documents

Legal opinion on project/title (often required by banks)

Loan application form

Declaration of no dues

Credit report/score

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🏦 Who Offers Project Loans?

Banks (public & private)

NBFCs (Non-Banking Financial Companies)

International institutions (e.g., IFC, ADB, World Bank for large-scale infra)

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