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  • A Simple Loan Proposal That worked.

    A Simple Loan Proposal That worked.

    Some people think writing a loan proposal is magic. No, it is not. Hereafter is one I wrote for a client and it worked. I apologize, I am not good at tables in word-press, however I am prepared to send a PDF format of the proposals if any of my reader request for it.

    PROPOSAL

    FOR XXXXXXXXXXXXX
    XXXXXX ACADEMY

    TO TAKE A N1.0M LOAN

    FROM

    XXXXXXXXXXX

    By Jidol Consul,
    B4/B5 Lanre Shopping Complex,
    New Ife Road, Ibadan

    APPLICATION
    The Managing Director,
    XXXXXXXXXXXXXX,
    6,XXXXXXXXXXXXXX,
    how to use monogram machine,,,,,,,,,,,\\mnn 14/7/13

    APPLICATION FOR A FACILITY OF N1.0 MILLION
    I am the proprietor of t xxxxxxxxxxxx Located along xxxxxxxxx Ibadan. I started the school in 1997 and I have invested on the land and building, fixture as well as the school buses. My total investment to date is estimated at about N10million.

    Now that there has been a stable patronage for the past 3 years, it has become imperative that the facilities should be upgraded before the commencement of the 2013/2014 academic session and also to properly accommodate our JSS arm.

    Apart from the steady increase in public registration, one or two schools located in the same vicinity are planning to move to their permanent sites and we are sure to be one of beneficiaries of the public that consider the permanent sites of these schools as far away because we are already on our permanent site. We believe our pupil population will go up to 250 in the next two years.

    The upgrading of the existing facilities should be completed before the commencement of the next academic year in readiness for the increase. The upgrading project is expected to cost N1.5 and we required a medium term facility of N1.0M for 12months.

    The repayment, interest and bank charges will be paid from the school fees as shown in the cash forecast. For the past three years, a maximum of sixty percent of fee was used for salary and other expenses to run the school.

    With this proposed upgrading there will be more pupils and the running cost as a percentage of the fees will even reduce further.

    Revenue & expenditure of Intelligent XXXXXXXXXX for the past three years
    YEAR REVENUE EXPENDITURE
    N’000 N’000
    2010/22011 3500 210
    2011/2012 4000 240
    2012/2013 4500 270

    I am submitting this report to you so as to appraise the project.
    Our level of patronage in the last 5 years goes to confirm that we have acceptable academic and moral standards.

    If the facility is approved, we have as security a landed property located at XXXXXXX area covered with a certificate of occupancy. A valuation report and photographs of property attracted.
    We would implore you to please consider our application as soon as practicable in view of the fact that the project must be completed before the end of Aug 2013.

    We thank you for your co-operation

    Yours faithfully,

    XXXXXXXXXXXXXXX

    INTRODUCTION

    The south western part of Nigeria is leading in the number of enrolment in schools in the country. This is because the average south westerner believes in qualitative education. Since 1956 when the free education program was introduced by the government led by the great Chief Obafemi Awolow, investment in qualitative education has been on the increase.

    The general public in this geo-political area has complete confidence in competition and consequently a number of private individuals and groups introduced private Schools to complement government efforts. In Ibadan, a number of private Schools were established and carved out a fantastic reputation of educational excellence for themselves. A few of these schools are Maryhill Nursery Primary School and Baptist Nursery and Primary School.
    These private Schools could not cope with the ever expanding demand and others with various degrees of efficiency sprang up.

    With the ever increasing cost of transportation, parents started to look for schools in their catchment areas particularly when shuttling from their places of work to collect their children form school became a serious problem. After a careful analysis of the primary educations sub sector, XXXXXXXXXXX was established after seeking and obtaining the approval of Oyo State Government in 1997.

    I, XXXXXXXXXX is the promoter of the school.

    THE SCHOOL

    XXXXXXXXXX Academy is located along XXXXXXXXXXX, directly facing the famous XxxxxxStop. The school serves the following communities Oyo State Housing Corporation’s Estate, Ojoo Military Barracks, Bashorun, Akobo Oju Irin, Omolayo area, General Gas area as well as Anifalaje area.

    The population had hovered around 140 and hope it will increase appreciably with this proposed upgrading.

    Year Pupil Population
    2010/2011 140
    20111/2012 135
    2012/2013 138

    Loan

    Money, Invest It

    The school has a total of 10 classrooms and a big hall which will be used for 5 classrooms. To these we hope to add another two to make a total of 17 classrooms. In addition, we have a school shop and conveniences.
    Primary arm 10Rooms
    Junior Secondary Arm 7Rooms
    We also have two functioning two buses to cope with the expected increase in pupils to be ferried to school especially from Odogbo barracks.

    The present facilities must be upgraded to some extent to complete effectively with two exiting reputable Schools in the same area. Our mission is to provide superior services to the parents and pupils and consequently we have decided to upgrade our facilities before the commencement of the next academic session in September 2013.

    MANAGEMENT AND STAFF PROFILE
    The management of any organization may make or mar it. The management team of XXXXXXX is made up of men and women who have passion for teaching. The management structure is organized as indicated below.

    Chairman

    Vice Chairman.

    Head Of Academy

    Asst. HA Sec Asst HA pry Head Operations

    Teachers Teachers Cleaners Security

    Chairman. The Chairman heads the management team. The Vice Chairman who will be nonexecutive reports directly to the chairman. The Head of Academy reports to the chairman, why his assistants who head each arm of the academy and head of operations report to him.
    A short profile of the management team is provided below:

    XXXXXXXX is the proprietor of the school. He possesses the following academic and professional qualifications:
    Higher National Diploma in Applied Chemistry
    Masters in Business Administration
    An Associate of the British Institute of Marketing
    A Fellow of the Nigerian Institute of Marketing

    He taught for 6 years with the School of Chemical Technology, Zaria. He later moved to the private sector to work with the Michelin Group where he held various management positions before leaving to set up XXXXXXX his consultancy outfit.

    Vice Chairman.The vice chairman is Mr. Xxxxxxxx. (B.Sc., ACA). He is a Chartered Accountant and a Banker. He is a nonexecutive vice chairman. His role is to advise on Financial Engineering matters and make sure the accounts are clean and the Academy remains focused. Should anything make the chairman not able to function properly, the vice chairman takes over the executive functions immediately.

    Head Of Academy. The head of Academy is Mr. XXXXXXX. He holds an HND in Banking & Finance and has been teaching all his life. A born teacher, who we poached from a big school in Cross Rivers State.

    Asst. Head of Academy Secondary. (Mr. XXXXXXX). He is currently doing his PhD part time having bagged a master from University of Ibadan. Very versatile and hard working.

    Asst. Head of Academy Primary. (Mrs. XXXXXXXX). She holds an NCE in Agricultural science. A natural teacher of children. Funmi does not believe a child cannot be bright.

    Head Of Operations. (Mrs. XXXXXXX). She holds a Diploma in Computer Science. A mother and a teacher. She is warm and easily liked by people. XXXXX is the utility staff who crosses all boarders.

    They are ably assisted by the followings.
    XXXX B.Sc
    XXXX NCE
    XXXX NCE
    XXXX NCE
    XXX B.Sc
    XXXXX B.Sc
    XXXXX NCE
    French Teacher Dip
    XXXX Driver
    XXXXXX Cleaner

    EQUITY CONTRIBUTUION

    For this proposal, the equity contribution of 30per cent was uused for flooring of the school and chanellisation.

    or
    In the Account in The Bank

    FUNFD UTILISATION PLAN
    The plan is to increase the pupil’s population to 250 in 2015/2016 academic year.
    2013/2014 160
    2014/2015 200
    2015/2015 250

    Parents and pupils use the services and the infrastructure in each school to determine the level of patronage. The exiting parents are pleased with the present level of academic standards particularly when a high percentage of our pupils pass public examinations to secondary schools in primary four.
    We added JSS1 this academic year which necessitated some structural changes and upgrading.
    The additional facilities to be provided are as follows.

    Concrete flooring of the whole school 300
    Construction of gutter and drainage 50
    Painting of the school. 300
    Joining of 2 classrooms 150
    Purchasing of two computers 150
    Educational Aids 100
    Furniture 100
    Books 100
    Tuning up buses 50
    1300

    As equity participation the following have been done
    Concrete Flooring of the compound 300
    Construction of gutter and drainage 50
    350

    Total 1300
    Equity participation expended 350
    Balance 950
    Loan Needed N1.0M

    CASH FLOW STATEMENT FOR XXXXXXXXXXX FOR 2013/2014

    CASH INFLOW 000
    Opening Balance 50
    Equity 400
    Loan 1000
    Fees 5524
    Tranport 1080
    TOTAL INFLOW 8054
    CASH OUTFLOW
    Fooring 300
    Painting 300
    Clasroom 150
    Gutter 50
    Furniture 100
    Computers&Internet 205
    Library & Aids 200
    Fuel 540
    Veh Maintenance 200
    Sal.&Wages 2086
    Overheads 240
    Management 780
    Statutory Dues 100
    Loan Repayment 1320
    TOTAL OUTFLOW 6571

    CASH BALANCE 1483

    12 MONTHS CASH FORECAST FOR xxxxxxxxxxxxxx FOR 2013/2014
    0
    AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN JUL Aug.
    Opening Balance 50 340 69 88 242 285 319 773 1132 746 842 1296 1678 50
    Loan 1000 0 0 0 0 0 0 0 0 0 0 0 0 1000
    Equity 400 0 0 0 0 0 0 0 0 0 0 0 0 400
    School Fees 0 350 600 500 244 450 750 715 0 552 750 613 0 5524
    Trpt. Fees 0 0 0 160 200 0 160 200 0 0 160 200 0 1080
    TOTAL(A) 1450 690 669 748 686 735 1229 1688 1132 1298 1752 2109 1678 8054

    EXPENSES
    Fooring 300 0 0 0 0 0 0 0 0 0 0 0 0 300
    Painting 300 0 0 0 0 0 0 0 0 0 0 0 0 300
    Clasroom 150 0 0 0 0 0 0 0 0 0 0 0 0 150
    Gutter 50 0 0 0 0 0 0 0 0 0 0 0 0 50
    Furniture 100 0 0 0 0 0 0 0 0 0 0 0 0 100
    Computers&Internet 100 50 5 5 5 5 5 5 5 5 5 5 5 205
    Library & Aids 50 50 50 50 0 0 0 0 0 0 0 0 0 200
    Fuel 0 30 60 60 30 45 60 60 15 60 60 60 0 540
    Veh Maintenance 0 50 25 25 0 0 25 25 0 25 25 0 0 200
    Sal.&Wages 0 251 251 176 176 176 176 176 176 176 176 176 0 2086
    Overheads 0 20 20 20 20 20 20 20 20 20 20 20 20 240
    Management 60 60 60 60 60 60 60 60 60 60 60 60 60 780
    Statutort Dues 0 0 0 0 0 0 0 100 0 0 0 0 0 100
    Loan Repayment 0 110 110 110 110 110 110 110 110 110 110 110 110 1320
    TOTAL (B) 1110 621 581 506 401 416 456 556 386 456 456 431 195 6571
    Bal.(A-B) 340 69 88 242 285 319 773 1132 746 842 1296 1678 1483 1483

    150,000 August salary will spread over Sepember and octiber and October

    PROFIT AND LOSS ACCOUNT FOR XXXXXXXXXX FOR THREE YEARS 2010/11 TO 2012/13
    2010/11 2011/12 2012/13
    000 000 000
    Revenues 3500 4000 4500

    Deduct
    Wages & salary 1300 1460 1620
    Management 480 480 480
    Overhead 84 84 120
    statutory dues 50 50 50
    Fuel 200 270 270
    Vehicle maint. 70 70 70
    Interest on laon 0 0 0
    Total Expenses 2184 2414 2610
    Gross Profit 1315 1586 1890
    Less depreciation 970 970 970
    Net profit 345 616 920

    SHEDULE OF DEPRECIATION
    Item Value Depreciation Dep. Value Dep. Value Dep. Value
    Land & Buiging 15000 5% 750 750 750
    Computer 200 20% 0 0 0
    Furniture 300 20% 60 60 60
    Teahing aids 100 10% 10 10 10
    Vehicles 1000 30% 150 150 150
    970 970 970

    ANALYSIS OF REVENUE FOR xxxxxxxxx ACADEMY FOR 2013/2014

    FIRST TERM SECOND TERM THIRD TERM
    School Population Fees Revenue Fees Revenue Fees Revenue
    Secondaryu 30 17.5 525 17.5 525 17.5 525
    Primary 70 10 700 12 840 12 840
    Nursery 60 9 540 10.5 630 10.5 630
    Total 1765 1995 1995
    4% for Debt 71 80 80
    Fees Revenue 1694 1915 1915
    Transport 360 360 360
    TOTAL REVENUE 2054 2275 2275

    Total For the year= N(2054 + 2275 + 2275) = N6604

    Assumptions.
    We have allowed 4% for debt even as most people pay even if hey carry till next term
    Pupils population does not include the ones we have given scholarships as ours
    Own corporate social responsibility.
    In the secondary we expect 4 to join our present 11 students in JSS1. join our present 11 in JS1 to make 15 in JS2.
    We expect at least 15 in our new JS1. feasible, even in our first year we started with 15.
    With this upgrading getting 15 will be a child’s play
    In the primary, our leaving finalists will be replaced with new ones to maintain our present
    population of 130.
    So, we expect 130 in primary and 30 in Secondary.
    For transportation, we expect at least 60 at N6000 per term. The least charged by competitors s N7000 per term

    STATEMENT OF STAFF COST FOR xxxxxxxxxxxxxxx ACADEMY
    XXXX HNd 20000
    XXX Dip 13000
    XXXXX NCE 11000
    XXXX M.Sc 12000
    XXXXX B.Sc 12000
    XXXXX NCE 8500
    XXXXX NCE 8500
    XX XXXXXXX NCE 9000
    XXXXXX B.Sc 8000
    XXXXX B.Sc 12000
    XXXXXXXX NCE 9000
    XXXXXX Benin Dip 7000
    Sunay O Driver 10000
    XXXXX Cleaner 7000
    XXXXX 0
    XXX 12000
    XXX 7000
    XXXX 10000
    176000

    Marketing

    We are using SMS, word of mouth recommendation, fliers and banners.
    Also using personal influence at the soldiers mess and joints.
    We are doing a total re-branding. We re-sensitize our members and reorganize.
    Staff will be uniformed from Monday to Thursday interchanging blue and white. Men to tie up.
    We will have a uniformed gate man.
    Our environment will be sparklingly clean.
    The facelift itself is marketing.
    Conclusion.
    From the projected profit and loss account and the cash forecast giving a profit of a about a million naira after allowing for the repayment of the loan, it means this business can service this loan.
    It is a feasible project and should be encouraged.

    Note. You may be asked to submit more information which you should. A common question is your plan B for repayment should the project revenue not be met. For example, in this case should the school not meet the projected pupils enrollment, the revenue will drop and you should be able to convince them of alternative plan.
    You can also elaborate on your marketing plan.

     

    I am not good at making tables with WP. You can contact us for clearer tables in excel

    Management

     

    Otunba Jide omiyale

    Otunba Jide omiyale

    Chief Editor at Naija Biz Ideas
    I am Otunba Jide Omiyale. I run this site with other professionals,including Accountants, Lawyers, Commercial Bankers and Investment Bankers
    Otunba Jide omiyale

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