What is a CMA report?
CMA report also knownalso is known as Credit Monitoring Arrangement report is the report showing the projected performance and the past performance of a business in financial terms. It is compiled with all the required financial ratios and metrics to help Financial Analysts and Bankers to ascertain the financial health of a business.
Most of the Banking and Financial Institution request the applicant (Business Loan Applicant) to prepare a Credit Monitoring Arrangement report (CMA report) in order to understand the flow and application of funds in a business. A CMA report which is professionally prepared can enhance the chances of obtaining a bank loan.
Under the Credit Monitoring Arrangement (CMA), banks have been permitted for sanctioning credit proposals (of large borrowers) after detailed analysis of the past performance. There is another requirement for the Banks. They need to submit the large credit proposals to the Reserve Bank of India for post-sanction scrutiny. These proposals involve working capital limits of Rupees 500 lakhs (5 crores) and above and/or term loan in excess of Rupees 200 lakhs (2 crores).
Documents/Information required to prepare CMA
- Business Activity (Brief Profile)
- Loan requirement:- CC
- Term Loan
- Bank Guarantee
- Letter of Credit (for Term loan require quotations)