CMA REPORT - EXPANSION OF BUSINESS/Renewal of OD or CC
A CMA (Credit Monitoring Arrangement) report is a crucial document required by banks and financial institutions when a business seeks an expansion of its existing facilities or the renewal/enhancement of its working capital limits like Overdraft (OD) or Cash Credit (CC). It provides a comprehensive financial overview and projections to help the lender assess the creditworthiness and viability of the business's request.
Given that your business is likely already operational (seeking expansion or renewal), the CMA report will focus on its past performance, current financial health, and projected future performance after the expansion or with the renewed/enhanced limits.
Here's a typical structure and the key components of a CMA report for the expansion of a business or renewal/enhancement of OD/CC limits:
1. General Information:
- Name and Address of the Borrower: Legal name and registered address of the business entity.
- Constitution of the Borrower: Type of organization (Proprietorship, Partnership, Private Limited, Public Limited, etc.).
- Names of Directors/Partners/Proprietor: Details of the key management personnel.
- Nature of Business: Detailed description of the current business activities and the proposed expansion.
- Industry Analysis: Overview of the industry in which the business operates, including its growth prospects, competitive landscape, and key success factors. This should also touch upon how the expansion aligns with industry trends.
- Existing Banking Arrangements: Details of current banking relationships, including existing credit facilities and their utilization.