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Detailed Project Report for a School & getting Loans from the Banks(DPR)

It is now time to address this topic since a lot of questions lately are being asked on this;

Background: A School will require funds initially to met its Capital Expenditure and later on Operational Expenditure. There will be different forms of capital which will be required at different stages like Term Loans, Over Draft Facility, Current Account Facility / Savings Account Facility, Vehicle Loans, Top-up Loans, Personal Loans etc. School as I have mentioned earlier is a Capital intensive project as the initial capital requirement is very high since for a decent level infrastructure, one is looking to build a minimum of 15,000 – 20,000 sq feet in the first stage. The process of raising capital can only start after the Society / Trust / Section 8 Company is in motion and the resolution is ready giving the directions to the entity to seek out for propositions from different banks.

Steps for getting Money / Finance / Loan / Project Finance / Project Loan / Term Loan from the bank

  1. Get the Land in order – in terms of Lease / Diversions Papers
  2. Get you Map made & approved from the following
    • An Architect
    • Town & Country Planning / Panchayat – whichever is applicable
    • Other Land office if required in terms of permissions based on location of the plot
  3. Get a Chartered Accountant and get a Detailed Project Report (DPR) made, you should be ready with the following assumptions
    • Amount of Construction required
    • Number of Students over a period of time
    • Costs involved with the School set up
    • Means of finance
    • Other ways a school will generate income other than School Tuition Fee – Like Conveyance Fee, Usage of the premises in the evening or weekends, Auditorium on rent, Canteen, Food Facility, Mess etc
    • Capacity utilisation – No of students per classroom
    • Schedule of Construction
    • No of Staff Required and Salary structure
    • Conveyance Facility and expenses
    • Other issues like CBSE regulations in terms of reserve funds, Affiliation Fee etc
    • An idea about the costs involved with ongoing school
      • Leaseline
      • Furniture Requirement
      • Telephone
      • Computers
      • Library
      • Landscaping
      • Decoration
      • Branding & Marketing
      • Play grounds
      • Activity Studios
      • Others
    • At the end of the day DPR should have the following for you

      – CAPEXL assumption
      – Hard cost
      – Soft cost
      – Revenue assumption
      – Class rooms details
      – Student details
      – Capacity utilizations prudent
      – Logistics cost and revenue
      – Books cost and revenue
      – Uniform cost and revenue
      – Estimated Results based on facts shared : 10 years projections
      – Cost of the project and the means
      – Balance sheet
      – Profit and loss
      – Pay back period
      – Term loan schedules
      – Repayment schedules and EMI’s
      – Depreciation calculations
      – Tax calculations

  4. Get you assets valued from a third party valuer (this can be done later also from an empaneled valuer of the bank) along with you Net worth statements from your CA
  5. Approach  a Bank – Here I advent seen any Private Bank coming forward and giving loan to a Greenfield School Project, so I suggest don’t waste time and approach a Nationalised Bank. Now a day CAs help in getting a Bank who can finance
    • Banks are going to ask for Collaterals (should be 130% – 150% ) more than the loan required
    • Banks are going to ask for Schedule of Payments
    • Initially banks are going to give a moratorium period where you will be exempted from paying back (later on all that will be saddled on EMIs to be paid later on)
    • Banks will keep Originals of the Property being mortgaged
    • Please remember the land on which School building is proposed to be built can also be kept as Collateral / Security in the bank.

I hope all of this will help you in getting finances. My School Consultancy company helps in arranging loans for promoters, let me know if you are facing any difficulty.

MONEY is important, Plan for it well. Cheers

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Abhiney Singh
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30 thoughts on “Detailed Project Report for a School & getting Loans from the Banks(DPR)”

  1. I am Academic Director of a Edtech company and teaching JEE mathematics since last 20 years. i am looking for to purchase a running CBSE school. i need investment for it. so can you help me for it

    1. I have written a post on this
      The Loan will be provided to a Society/ Trust / Section 8 company if they have a Diverted Property to mortgage. For example if you ned to raise 1 crore from the bank, you should have a property (the land use should be Non-Agricultural in nature) worth 1.2.~ 1.5 Crores Rupees.

      In case you meet the above criteria, I suggest get in touch with a Chartered Accountant (CA) and ask him to create a Detailed Project Report (DPR) from him and post that meet a banker.

  2. Dear Sir,
    I have four acre of land and want to move in education sector, i want to build platform for student of ujjain so that they can get best curriculum in education as well as in sports in ujjain, where public is very deprive of education for their children.
    So, can you please give me your advice how to initiate the process.
    Thanking You
    Anshul Jain

    1. Mera school 10 saal say utterpardesh education board ki affiliation per chal raha tha an maine cbse ki building bna li mai loan lena chahati hu per bank school k alawa property mang raha hai mere pass nahi hai jo tha vo sale kar school per lga diya mere pass 1000 k kareeb baccha hai…keya karu

  3. Dear Abhinay Singh,
    Thanks for the guidance given above….My dream is to establish a pre primary school and I can only invest up to 5 lakhs. I want to apply for loan ( Pradhana mantri mudra yojana ). I need your guidence or consultants help to make DPR for my school project.
    Contact Number : 7675936444

    Awaiting for your response at the earliest.

    1. Dear Sarika,
      What you have is a very little amount, you would need a few more lakhs to run a decent Pre School. At this budget, I suggest you get in touch with a lot of franchisees and take all the information, they will help you with the business plan. Post taking all the info to decide on the future course of action.

  4. Sir I have only 4-5 lakhs only sir please help me in providing loan sir it is my dream to open a school since many year but due to financial problem I have not yet complete my dream sir pls help me
    Give me some suggestion on my whatsapp no. Personally 9627876753

  5. Hi sir we have one primery school now three hundred students are studying now we have 26000 sqft we are planing to cunstract 500students building as far cbsc norms and getting loans sir we want project report how much fund will require to this

    1. Dear Sir,
      You would need a minimum of 1.5 Acres if your school is located outside of Metros or in town having population of more than 15 Lacs. If you need a detailed project report and Bank Finance, my consulting unit can help you with the same. Kindly call me 70002 40006.

  6. Hello Sir,
    I am Kshitiz Mittal from U.P, i am running school upto grade 8 with 1K students since last decade in a rented building and now i want to purchase land & establish a proper building with CBSE Affiliation, so i need detailed project so that i can arrange fund or else for partner.

  7. I have a land measuring about 20000 sqft in town-Sasni,district-Hathras,Uttar Pradesh and planning to construct a school building on it and run the school.For this purpose I want Bank Loan. please guide me how to proceed and prepare the proposal for seeking loan.

    1. Dear Mr Singh,
      I have already listed almost all the elements one needs to look at before preparing projections for a School as a start up. I suggest get a CA who can help you with this.

    2. Dear Muhar,
      You will not be able to get CBSE Affiliation as the land is not sufficient as per CBSE Standards. For the purpose of bank loan, get in touch with a CA who can make a Business Plan for you. Bank is not going to hear you without a project report along with requisite estimates and a Chartered Accountant.

  8. Respected sir!
    I am ARJUN from andhra prakash. I would like to start an international school.I want to know about funding loan facility information. Please kindly give me the same.

    1. Dear Arjun,
      The funding facility is completely based on the Business Plan and the Amount of Collaterals you are ready to mortgage. If you need a CA who you would like to take professional services from, my partner is there who is a specialist in School Projects, do let me know.

  9. Hi..I am looking forward to open a cbse school in Ara town Bihar. I have my own land but need to make DPR for it and how much costing is involved.
    Please guide

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