CMA Data vs Project Report: Which Does Your Lender Actually Want?
CMA data sizes a working capital limit. A project report justifies a capital expenditure. A lender asks for CMA data when the facility is a cash credit or working capital demand loan; for a project report when the facility funds an asset that has to earn its own repayment. Large proposals need both, and they must agree.
Key facts
- Neither document is prescribed by a regulator. RBI's Master Direction on MSME lending requires banks to "furnish an indicative checklist of documents required for processing the loan application at the time of applying for the loan" (RBI, *Master Direction — Lending to MSME Sector*, RBI/FIDD/2017-2018/56, updated 9 February 2026). What sits on that checklist is a board-approved policy choice, which is why two banks ask the same borrower for different packs.
- YuSight has processed 1 Mn documents, and the recurring failure it sees on India files is not a missing document — it is a CMA pack and a project report from the same borrower that disagree about the same number.
- The project side now has a rulebook the working capital side does not. The Reserve Bank of India (Project Finance) Directions, 2025 took effect on 1 October 2025 and apply to commercial banks, NBFCs including HFCs, urban co-operative banks and AIFIs (RBI/2025-26/59, issued 19 June 2025).
- A composite facility collapses both documents into one file. "A composite loan limit of ₹1 crore can be sanctioned by banks to enable the MSE entrepreneurs to avail of their working capital and term loan requirement through Single Window" (same Master Direction) — one sanction, two assessment methods, two document sets.
- Some schemes make the project report a portal upload, not a courtesy. Under PMEGP, applicants must upload a project report with the online application, against a maximum admissible project cost of ₹50 lakh for manufacturing and ₹20 lakh for the business/service sector (KVIC, *Revised PMEGP Scheme Guidelines*, sections 3.2(i) and 11.6(d)).
What is each document actually for?
Strip away the templates and the two documents answer different questions.
CMA data answers: how much of this borrower's operating cycle should the bank fund, and for how long? It is a five-column workbook — two audited years, one estimated current year, two projected years — built around a breakdown of current assets and current liabilities into classes with holding periods attached. Everything in it exists to produce one number: the assessed working capital limit. If you have not read the seven statements before, start with what CMA data is and why Indian banks ask for it.
A project report answers: will this specific capital expenditure generate enough cash to repay the loan that funds it? It is a feasibility document. It contains a project cost estimate, a means-of-finance table, a technical description of what is being built, a market assessment, and a repayment schedule tested against projected cash accruals. Everything in it exists to produce one number too: the debt service coverage ratio.
The distinction is not about time horizon or page count. It is about what secures repayment. RBI's Project Finance Directions define project finance as a "method of funding a project in which the revenues generated by the funded project serve as the primary security for the loan, and also as a source of repayment", and a project as a venture "undertaken through capital expenditure for creation/expansion/upgradation of tangible assets and/or facilities in the expectation of stream of cash flow benefits extending far into the future" (RBI/2025-26/59).
A cash credit limit is not repaid out of a project's revenues. It revolves against a stock of receivables and inventory that never fully liquidates. That is why the two documents cannot be substituted for each other, however much they overlap.
What does each one contain, side by side?
| CMA data | Project report |
|---|---|---|
Question it answers | How large should the working capital limit be? | Will this asset repay the loan that buys it? |
Core output | Assessed limit (MPBF, turnover method or cash budget) | DSCR, IRR, break-even, payback |
Structure | Seven standardised statements | Free-format, typically 8–12 sections |
Horizon | 2 audited + 1 estimated + 2 projected years | Construction period plus the full repayment tenor, often 7–10 years |
Granularity of projections | Annual, by current asset and liability class | Annual P&L and cash flow, plus a month-wise implementation schedule |
Key schedule | Statement 4 — projected current assets and liabilities with holding periods | Project cost and means of finance, with a debt-equity test |
What the analyst recomputes | Holding periods, working capital gap, MPBF | Project cost reasonableness, capacity utilisation ramp, DSCR |
Security logic | Hypothecation of the funded current assets | Mortgage or hypothecation of the created asset |
Prepared by | Borrower's chartered accountant | Borrower, a project consultant, or a TEV agency |
Attested | No — projections carry no audit opinion | No, unless a TEV study is separately commissioned |
Frequency | At sanction and every renewal, usually annual | Once, at appraisal; revised only on cost overrun or DCCO change |
What kills it in review | Holding periods that drift in the borrower's favour | Capacity utilisation assumed at 85% in year one |
Two of these rows deserve emphasis. The frequency row is the one borrowers most often get wrong: they treat CMA data as a one-off submission and are surprised when the bank asks again eleven months later. The attested row is the one analysts most often forget: neither document carries an audit opinion on its projected columns, so both are assertions until the analyst re-derives them.
Which document does the lender ask for, by facility type?
Facility | CMA data | Project report | Why |
|---|---|---|---|
Cash credit / OD against stock and book debts | Yes | No | The limit comes from the working capital gap |
Working capital demand loan (WCDL) | Yes | No | Same assessment, different delivery |
Enhancement or renewal of an existing CC | Yes | No | Fresh projections, fresh limit |
Ad-hoc / temporary overdraft | Usually not | No | Assessed against a stated short-term need |
Term loan for plant and machinery | Sometimes | Yes | DSCR drives the sanction; CMA only if WC is also sought |
Greenfield project / new unit | Yes, projected only | Yes | No audited history to restate; both are forward-looking |
Expansion at an existing unit | Yes | Yes | The new capacity changes the working capital cycle |
Composite loan up to ₹1 crore (MSE, single window) | Yes | Yes | One sanction covering both requirements |
Lease rental discounting | No | No | Assessed on the lease deed and rental escrow |
Non-fund limits (LC, BG) only | Sometimes | No | Assessed on the underlying trade cycle |
Takeover of an existing limit | Yes | Only if a term loan is taken over too | Plus the existing lender's sanction letter and conduct |
Below the turnover-method thresholds — fund-based working capital limits up to ₹5 crore for micro and small enterprises, ₹1 crore for others (RBI/2023-24/51, *Master Circular on Management of Advances*, 25 July 2023, para 2.1) — many lenders accept a simplified statement instead of a full seven-statement CMA pack. The methods that sit above those thresholds are compared in working capital assessment methods: turnover, MPBF and cash budget.
A worked example: one borrower, two facilities, one number that must tie
All figures below are illustrative and constructed to demonstrate the method. They are not client data.
Vaigai Precision Components Private Limited, Coimbatore — machined components for a pump manufacturer. FY2027 audited net sales ₹41.00 crore. The company approaches its bank in November 2027 for two things at once: a ₹6.50 crore term loan for a new CNC machining line, and an enhancement of its ₹4.00 crore cash credit limit.
Two documents, two assessments, one file.
The project report side
Project cost:
Item | ₹ |
|---|---|
Civil works and building extension | 1,15,00,000 |
Plant and machinery — 2 vertical machining centres, 1 turning centre | 6,70,00,000 |
Electrical installation and utilities | 60,00,000 |
Miscellaneous fixed assets | 40,00,000 |
Preliminary and pre-operative expenses | 25,00,000 |
Contingency | 25,00,000 |
Margin money for working capital | 40,00,000 |
Total project cost | 9,75,00,000 |
Means of finance:
Source | ₹ | % |
|---|---|---|
Promoters' contribution — equity and internal accrual | 3,25,00,000 | 33.3% |
Term loan | 6,50,00,000 | 66.7% |
Total | 9,75,00,000 | 100% |
Debt-equity = 6,50,00,000 ÷ 3,25,00,000 = 2.00 : 1.
Term loan terms: 7 years, including a 12-month moratorium; 72 equal monthly principal instalments thereafter; interest 9.25% p.a.
DSCR in the first full repayment year (project Year 2):
Line | Arithmetic | ₹ |
|---|---|---|
Principal repayable in the year | 6,50,00,000 ÷ 6 | 1,08,33,000 |
Average outstanding | (6,50,00,000 + 5,41,67,000) ÷ 2 | 5,95,83,500 |
Interest for the year | 5,95,83,500 × 9.25% | 55,11,000 |
Debt service | 1,08,33,000 + 55,11,000 | 1,63,44,000 |
Profit after tax |
| 78,00,000 |
Add: depreciation |
| 92,00,000 |
Add: interest on term loan |
| 55,11,000 |
Cash available for debt service | 78,00,000 + 92,00,000 + 55,11,000 | 2,25,11,000 |
DSCR, Year 2 | 2,25,11,000 ÷ 1,63,44,000 | 1.38 |
Year 2 is the minimum-DSCR year; the ratio improves as the principal outstanding falls. Which DSCR the sanction note quotes — the minimum or the tenor average — is a presentation decision that changes how the proposal reads, and the method Indian banks use is set out in DSCR calculation for term loans in India.
The CMA side
Same borrower, same file, FY2028 projections. The new line lifts projected net sales to ₹58.00 crore.
Current asset | Basis | Computation | ₹ crore |
|---|---|---|---|
Raw material | 24 days of RM consumption ₹33.00 cr | 33.00 × 24 ÷ 365 | 2.17 |
Work in progress | 9 days of cost of production ₹42.50 cr | 42.50 × 9 ÷ 365 | 1.05 |
Finished goods | 21 days of cost of sales ₹44.00 cr | 44.00 × 21 ÷ 365 | 2.53 |
Receivables | 62 days of gross sales ₹58.00 cr | 58.00 × 62 ÷ 365 | 9.85 |
Other current assets | GST refund, deposits, advances | — | 0.70 |
Total current assets |
|
| 16.30 |
Other current liability (excluding bank borrowing) | Basis | Computation | ₹ crore |
|---|---|---|---|
Sundry creditors for goods | 40 days of purchases ₹34.50 cr | 34.50 × 40 ÷ 365 | 3.78 |
Statutory dues and expenses payable | — | — | 1.02 |
Current maturity of the new term loan | From the project report | 1,08,33,000 | 1.08 |
Other current liabilities |
|
| 5.88 |
- Working capital gap = 16.30 − 5.88 = ₹10.42 crore
- Minimum margin, Method II = 25% × 16.30 = ₹4.08 crore
- Test (a) = 16.30 − 4.08 − 5.88 = ₹6.34 crore
- Test (b) = 10.42 − 4.30 (projected net working capital) = ₹6.12 crore
- MPBF = lower of the two = ₹6.12 crore, against an existing limit of ₹4.00 crore
The full derivation of Method I and Method II, and the algebra that makes Method II always produce a 1.33 : 1 current ratio, is in MPBF calculation explained.
The tie-out, and what happens when it is missed
Look at the bolded row in the current liabilities table. The ₹1.08 crore current maturity of the new term loan is not a CMA number. It comes straight off the project report's repayment schedule, and it belongs in other current liabilities because it falls due within twelve months.
Leave it out — which is what happens when the CA who prepares the CMA pack has not seen the project report — and the arithmetic moves:
| Correct | Term loan maturity omitted |
|---|---|---|
Total current assets | 16.30 | 16.30 |
Other current liabilities | 5.88 | 4.80 |
Working capital gap | 10.42 | 11.50 |
Test (a): TCA − 25% TCA − OCL | 6.34 | 7.42 |
Test (b): WCG − NWC | 6.12 | 7.20 |
MPBF | 6.12 | 7.20 |
The over-assessment is ₹1.08 crore — exactly the omitted instalment, because test (b) moves one-for-one with other current liabilities. The bank would have sanctioned a working capital limit that silently funds a term loan repayment.
There is a second tie-out in the same file, and it runs the other way. The CMA's projected net sales of ₹58.00 crore must equal the project report's Year-2 revenue at the assumed capacity utilisation. If the project report ramps to ₹64 crore and the CMA projects ₹58 crore, one of the two documents is wrong, and the DSCR is built on the more optimistic of them.
Who prepares each, and who signs?
CMA data is almost always prepared by the borrower's chartered accountant, working from the audited financials, the trial balance and the borrower's sales plan. It carries the CA's letterhead and the borrower's signature. No audit opinion attaches to the projected columns. The step-by-step build order — and the cross-checks that must tie between sheets — is set out in how to prepare CMA data for a bank loan.
Project reports have a wider authorship. Below ₹5 crore of project cost they are usually written by the same CA, or bought from a consultant against a template. Above that, lenders increasingly want an independent techno-economic viability study from a specialist agency — and for infrastructure PPP projects, RBI now requires one in defined circumstances where "the aggregate exposure of all lenders is ₹100 crore or more" (RBI/2025-26/59, para 20).
Whoever writes it, the analyst's job is the same in both cases: recompute rather than read off. The credit appraisal sequence that surrounds both documents is described in the credit appraisal process in Indian banks.
Where does the confusion actually come from?
Four genuine overlaps, and one false one.
- Both project forward. Statements 4 to 7 of a CMA pack are projections, and so is the entire operating section of a project report. A borrower who has just built one set of projections reasonably assumes the other document is the same thing reformatted.
- Both contain a projected P&L and balance sheet. They differ in classification, not in substance — the CMA restates into the bank's current-asset classes, the project report usually keeps the borrower's own heads.
- Both are used to derive a ratio the lender will covenant on. CMA data produces TOL/TNW and current ratio; the project report produces DSCR. Two of these end up in the same sanction letter.
- Composite proposals carry both under one cover. A ₹1 crore single-window MSE facility arrives as a single bound document with a project section and a CMA section, and it is easy to read it as one report.
The false overlap: borrowers frequently submit a project report instead of CMA data for a working capital enhancement, on the reasoning that the project report already contains projections. It does — but not broken into current asset and liability classes with holding periods, which is the only form the working capital gap can be computed from. The submission gets returned, and two weeks are lost.
How YuSight handles both document sets
A composite proposal reaches a credit team as a folder: audited financials for two years, a CMA workbook in a locked Excel file, a project report as a 60-page PDF with the cost tables as images, machinery quotations, GST returns, bank statements and a bureau report. Some of it is for the borrowing company; some of it is for a partnership firm the promoters also run.
YuSight's Document Intelligence classifies each file, validates it against the expected document type, and maps it to the right borrower entity — the step that matters when a group sends everything for three entities in one folder with no naming convention. Financial Spreading then extracts and standardises the financials, computes the liquidity, leverage and coverage ratios, and traces every figure back to the document and page it came from, analyst-editable throughout. Across 1 Mn documents processed, the classification step is what turns a folder into a file.
The tie-outs above — current maturity in the CMA against the repayment schedule in the project report, CMA projected sales against project report Year-2 revenue — are arithmetic on numbers that arrive as PDFs. That is where the analyst hours go, and it is the part worth automating before the judgement.
FAQ
What is the difference between CMA data and a project report?
CMA data works out how big a working capital limit should be, using a breakdown of current assets and liabilities. A project report works out whether a specific capital expenditure will generate enough cash to repay the loan funding it. One produces a limit, the other produces a DSCR.
Do banks need both a CMA and a project report?
For a proposal that funds both an asset and the working capital that asset will need, yes. Expansion cases and composite loans almost always attract both. A plain cash credit renewal attracts only CMA data.
Which document is required for a term loan?
The project report, because the term loan is repaid out of the cash the funded asset generates. CMA data comes into a term loan file only when the borrower is also asking for working capital, or when the lender wants the full balance sheet projection to test the leverage covenant.
Is either document mandatory under RBI rules?
No. RBI does not prescribe a CMA format or a project report format for ordinary lending. What it requires is that the bank publish an indicative checklist of documents. Both documents are conventions written into individual banks' loan policies.
Can a project report be used instead of CMA data?
No, and this is the most common wasted fortnight in an India credit file. A project report projects sales and profit but does not break current assets into raw material, work in progress, finished goods and receivables with holding periods — and without that breakdown there is no working capital gap to compute.
Who prepares a project report?
Usually the borrower's CA or a project consultant. On larger or technically complex proposals the lender wants an independent techno-economic viability study instead, prepared by an agency with sector engineers rather than only accountants.
How long is a project report valid?
Until the project cost or the commissioning date moves. A cost overrun, a change in the date of commencement of commercial operations, or a material change in the machinery specification all mean the report has to be revised and the DSCR recomputed on the new numbers.
What is the single most common mistake when both documents are filed together?
The term loan's current-year principal instalment is left out of the CMA's other current liabilities. It inflates the assessed working capital limit by exactly the amount of the omitted instalment, and the bank ends up funding a term loan repayment through a cash credit account.
Does a greenfield project need CMA data if there is no history?
Yes, but only the projected columns. There are no audited years to restate, so statements 1 to 3 are largely blank and the assessment rests entirely on statement 4 — which is why greenfield working capital limits get scrutinised harder, not less.
Key takeaways
- CMA data sizes a revolving limit against an operating cycle. A project report sizes a term loan against an asset's own cash generation. The test is what repays the facility.
- Facility type, not loan size, decides which document you need. Cash credit and WCDL take CMA data; anything that buys an asset takes a project report; expansion and composite proposals take both.
- Neither document is regulator-prescribed, and neither carries an audit opinion on its projected columns. Both are assertions until the analyst re-derives them.
- When both are filed, they share numbers. The term loan's current-year instalment must appear in the CMA's other current liabilities, and the CMA's projected sales must match the project report's Year-2 revenue.
- Omitting that instalment overstates the assessed working capital limit by exactly the instalment amount — ₹1.08 crore in the worked example above.
- A project report submitted in place of CMA data will be returned. It does not contain the current-asset classification the working capital gap is computed from.
Upload a messy document set and see it classified — a composite proposal with a CMA workbook, a 60-page project report and three entities in one folder. Book a live demo.
