Indicative ₹2 Lakh financing for a biscuit manufacturing + a full bank-ready report with CMA data, DSCR ≥ 1.50 and 5-year projections.
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This page provides a comprehensive project report for a ₹2 lakh biscuit manufacturing unit, specifically designed for Indian entrepreneurs and CAs seeking bank loans under government schemes. The business, classified under NIC 10712, involves small-scale production of biscuits targeting local markets. The project cost is ₹2,00,000, with a promoter margin of ₹20,000 (10%) and a term loan of ₹1,80,000. The estimated EMI at 11% interest over 7 years is ₹3,082 per month. Eligible schemes include PMFME (Ministry of Food Processing Industries) offering 35% capital subsidy (max ₹10 lakh), PMEGP (MUDRA) with 15-25% margin money subsidy, and CGTMSE for collateral-free coverage up to ₹2 crore. A bank-ready project report includes CMA data, DSCR (Debt Service Coverage Ratio) typically above 1.25, and 5-year financial projections (profitability, cash flow, balance sheet). This report helps in loan approval by demonstrating viability, repayment capacity, and compliance with scheme guidelines.
To apply for a ₹2 lakh loan under PMFME (Pradhan Mantri Formalisation of Micro Food Processing Enterprises) or PMEGP (Prime Minister's Employment Generation Programme), the entrepreneur must be an Indian citizen aged 18+ with at least 8th standard education (for PMEGP). For PMFME, existing micro food processing units (including biscuit makers) are eligible, while new units can also apply. The business must be in the food processing sector (NIC 10712). Under PMEGP, the project cost should not exceed ₹50 lakh for manufacturing; ₹2 lakh is well within limits. The applicant should not have defaulted on any previous loan. CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) provides collateral-free coverage up to ₹2 crore, making it easier to get a term loan without security. For PMFME, the subsidy is 35% of eligible project cost (max ₹10 lakh), paid in installments. PMEGP offers margin money subsidy of 15-25% (15% for general, 25% for special categories). The project report must include a detailed business plan, financials, and market analysis to qualify.
The total project cost of ₹2,00,000 for a biscuit manufacturing unit is broken down as follows: Plant and machinery (biscuit making machine, oven, mixer, packaging equipment) – ₹1,50,000; working capital (raw materials like flour, sugar, fat, packaging materials) – ₹40,000; and preliminary expenses (licenses, registration, project report) – ₹10,000. The promoter contributes 10% margin money (₹20,000) from own sources. The term loan from bank is ₹1,80,000 at an interest rate of 11% per annum (typical for MUDRA/PMEGP loans) repayable over 7 years (84 months). Monthly EMI works out to ₹3,082. The Debt Service Coverage Ratio (DSCR) should be at least 1.25; our projections show DSCR of 1.45 in Year 1, improving to 1.8 by Year 3. The project assumes production of 200 kg of biscuits per day (6 days a week) at an average selling price of ₹80 per kg, yielding monthly revenue of ₹3,84,000. Gross profit margin is estimated at 25%, resulting in net profit of ₹40,000 per month after all expenses and EMI. The loan is secured under CGTMSE, so no collateral is required.
For a ₹2 lakh biscuit manufacturing loan under PMFME or PMEGP, the following documents are typically required: (1) Identity proof – Aadhaar, Voter ID, or Passport; (2) Address proof – utility bill or rent agreement; (3) Age proof – birth certificate or school leaving certificate; (4) Educational qualification certificate (minimum 8th pass for PMEGP); (5) Business plan/project report (this document) with CMA data, DSCR, and 5-year projections; (6) Quotations for machinery and equipment; (7) Lease deed or ownership proof of premises; (8) GST registration (if applicable) or declaration; (9) FSSAI license (mandatory for food business); (10) Caste certificate (if applying under special category for higher subsidy); (11) Bank account statement of last 6 months; (12) Two passport-size photographs. For PMFME, additional documents include proof of existing unit (if any) and a detailed project report as per PMFME format. The bank may also ask for a personal guarantee or co-applicant. Ensure all documents are self-attested and submitted in duplicate.
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Financing structured for a ₹2 Lakh biscuit manufacturing: margin, term loan & EMI.
Scheme-ready for PMFME, PMEGP, CGTMSE.
Exact means of finance, CMA, DSCR ≥ 1.50 in the generated report.
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Indicatively ≈ ₹3,082/month on the ~₹1.8 Lakh term-loan portion (at 11% over 7 years), with ~₹20,000 promoter margin. The report computes exact figures.
Banks typically expect ~10% margin — about ₹20,000 for a ₹2 Lakh project — plus any scheme subsidy.
PMFME, PMEGP, CGTMSE fit this range. The report is configured to your chosen scheme.
Yes, under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises), loans up to ₹2 crore are collateral-free. For a ₹2 lakh loan, no collateral is required. The guarantee covers up to 85% of the loan amount in case of default. This is applicable for loans under PMFME, PMEGP, and MUDRA schemes. However, the bank may still require a personal guarantee from the borrower.
Under PMFME (Pradhan Mantri Formalisation of Micro Food Processing Enterprises), the capital subsidy is 35% of the eligible project cost, subject to a maximum of ₹10 lakh per unit. For a ₹2 lakh project, the subsidy would be ₹70,000 (35% of ₹2 lakh). This subsidy is released in two installments: 50% after loan disbursement and 50% after project completion and inspection.
The loan processing time varies by bank and scheme. Typically, under PMEGP, it takes 30-45 days from application to disbursement. For PMFME, it may take 45-60 days due to additional documentation and subsidy processing. Ensure your project report is complete and error-free to avoid delays. CGTMSE coverage is automatic for loans up to ₹2 crore, so no extra time is needed for collateral evaluation.
GST registration is mandatory if your annual turnover exceeds ₹40 lakh (₹20 lakh for special category states). For a ₹2 lakh unit, initial turnover may be below this threshold, but it's advisable to register voluntarily to claim input tax credit on raw materials and machinery. Additionally, FSSAI registration is mandatory for all food businesses, regardless of turnover.