What promoter contribution will be expected?

It varies by lender, by sector, and by how much of the security is tangible and already owned. Rather than quote a figure we cannot stand behind, this tool lets you model several and see the debt-equity ratio each produces. Bring the version you are comfortable with to the discussion.

Does land I already own count as my contribution?

Frequently yes, at a value the lender is willing to accept — often supported by a valuation rather than by what you paid. Treat it as a question to settle early, because the answer changes how much cash you actually need to arrange.

What is margin for working capital doing in a project cost?

A new unit needs stock, needs to pay suppliers, and waits to be paid by customers, all before the working-capital limit is fully drawn. The portion of that gap the bank expects you to fund is a genuine cost of commissioning the project, so it belongs in the cost statement rather than being discovered later.

Calculator

Project Cost and Means of Finance

Every term-loan appraisal starts with two statements sitting side by side: what the project costs, and where the money is coming from. They must balance to the rupee.

Project cost

Land and site development (₹)

₹ 1,50,00,000 · 1.5 crore

Building and civil works (₹)

₹ 2,50,00,000 · 2.5 crore

Plant and machinery (₹)

₹ 4,50,00,000 · 4.5 crore

Miscellaneous fixed assets (₹)

₹ 60,00,000 · 60 lakh

Preliminary and pre-operative expenses (₹)

₹ 40,00,000 · 40 lakh

Interest during construction (₹)

₹ 30,00,000 · 30 lakh

Interest accruing before commercial production begins is part of the project cost.

Margin money for working capital (₹)

₹ 50,00,000 · 50 lakh

Contingency on civil and plant (%)

Adds ₹ 35,00,000 on the items that can actually vary.

Means of finance

Promoter contribution (% of project cost)

Model a few. Every point moves the debt-equity ratio below.

Total project cost

₹ 10,65,00,000

Promoter contribution

₹ 3,19,50,000

Debt required

₹ 7,45,50,000

Debt-equity ratio

2.33 : 1

How this was calculated

Total cost = Land + Building + Plant + Misc fixed assets + Preliminary & pre-operative + Interest during construction + Working-capital margin + Contingency

Contingency = 5% × (Building + Plant) = ₹ 35,00,000

Debt-equity = (Total cost − Promoter contribution) ÷ Promoter contribution

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Why the cost statement gets sent back

The most common reason a project cost statement comes back for rework is not an inflated number — it is a missing one. Preliminary and pre-operative expenses, interest during construction, and the margin the bank expects you to bring for working capital are all part of the cost of getting the plant to its first rupee of revenue. Leave them out and the sanction is short by exactly that amount, which you then have to fund yourself at the worst possible moment.

Contingency is not padding

A contingency provision is a normal, expected line in a project cost statement. Appraisers look for it, because a project with no contingency is a project whose promoter has not thought about delay. What matters is that it is a stated percentage of the cost items that can actually vary — civil work and equipment — rather than a round number added at the bottom.

Promoter contribution and debt-equity

The share of the cost you fund yourself is what a lender reads as commitment, and the debt-equity ratio that results is one of the terms most likely to be negotiated. This calculator lets you set the contribution and watch the ratio move, so you can walk into the discussion knowing what each percentage point costs you.

Common questions

Products this calculator relates to

Project Loan

Long-term finance for infrastructure and capital-intensive projects.

Term Loan

Periodic-repayment finance for expansion and equipment.

Machinery Loan

Finance to buy new plant and machinery, or to raise funds against machinery you already own.

Other calculators

DSCR LRD BG Commission MPBF / Working Capital EMI

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