1. Alignment Between Audited Financials, GST and Bank Credits
Commercial underwriters begin by comparing revenue reported in the audited Profit & Loss account with monthly GSTR-1 and GSTR-3B filings and actual credits routed through operative bank accounts. Any variance—such as inter-branch transfers, advance receipts or credit notes—should be documented clearly in a reconciliation note prepared before the file is logged.
2. Working Capital Cycle & Holding Norms
For Cash Credit or Overdraft limits above ₹50 lakh, lenders assess your operating cycle: how many days raw material, work-in-progress, finished goods and receivables are held versus credit received from suppliers. Realistic CMA projections grounded in historical trends carry far greater credibility than inflated turnover assumptions.
3. Key Financial Ratios Examined by Credit Committees
Banks evaluate Current Ratio (liquidity), Total Outside Liabilities to Tangible Net Worth (TOL/TNW for leverage), Interest Coverage Ratio and Debt Service Coverage Ratio (DSCR). Addressing low net worth—for example, by capitalising unsecured promoter loans or retaining profits—prior to application strengthens credit rating.
4. Collateral Documentation & CIBIL Hygiene
Commercial loans require clean legal title over collateral properties (clear chain of deeds, mutation, non-agricultural conversion, approved building plan and nil encumbrance) alongside clean CIBIL / CMR rankings for both the borrowing entity and individual guarantors.