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Introduction:
This loan feasibility report is prepared to assess the viability of purchasing a tractor
MF-385 for an agricultural farm. The purpose of this report is to provide information about
the economic and financial feasibility of this investment, including the estimated costs and
potential benefits of purchasing a tractor.
Background:
Our agricultural farm is located in a rural area of Village Gaggar Tehsil and District
Kasur with an average size of 14Kanals 4Marlas. The farm produces a variety of crops,
including corn, wheat, and rice etc,. Currently, our farm uses traditional farming methods,
which involve manual labor and animal power. The applicant is considering purchasing a
tractor MF-385 to increase productivity, reduce labor costs, and improve efficiency.
Costs:
The estimated cost of purchasing a tractor is Rs. 2,750,000/-. The tractor will be
financed over five years with an interest rate of 7% per annum. The monthly payment for
the loan will be paid per month. Additionally, there will be costs associated with operating
the tractor, including fuel, maintenance, and repairs. Based on industry estimates, these costs
are expected to be approximately Rs.8,00,000/- per year.
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Benefits:
The primary benefits of purchasing a tractor MF-385 include increased productivity,
reduced labor costs, and improved efficiency. With a tractor, the applicant will be able to
plow and prepare the land faster and more efficiently, reducing the time required for these
tasks by up to 50%. This increased productivity will allow the applicant to increase its crop
yields and potentially expand its operations.
The use of a tractor will also reduce the need for manual labor and animal power,
which will result in cost savings. With a tractor, the applicant will be able to reduce its labor
costs by up to 40%. Additionally, the improved efficiency of using a tractor will enable the
farm to reduce its input costs, such as seeds and fertilizer, by up to 20%.
Financial Analysis:
To assess the financial viability of purchasing a tractor, we conducted a cost-benefit
analysis over a five-year period. The results of the analysis indicate that the farm will recoup
its investment in the tractor within three years. Over the five-year period, the farm is
expected to realize a net benefit of approximately Rs. 80,00,000/-.
Conclusion:
Based on the analysis conducted in this report, I hereby request that that the applicant
may kindly be granted loan for our farm to proceed with the purchase of a tractor. The
tractor will provide our farm with a significant increase in productivity, a reduction in labor
costs, and improved efficiency. The financial analysis also indicates that the investment in the
tractor is financially viable and will result in a net benefit for the farm over the next five
years.
PROJECTED/ESTIMATEDCOST OF THE PROJECT/BUSINESS
TOTAL Rs.2,850,000/-
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2. DETAIL OF HUMAN RESOURCE/LABOUR/STAFF
N/A
TOTAL
We will grow four month crops which we will sell and pay your
installments easily
TOTAL
6. PROJECTED PROFIT/LOSS STATEMENT