Why CMA files get sent back

Most CMA files come back not because a figure was wrong, but because two forms disagreed with each other. The projections say one thing, the balance sheet implies another, and the fund flow statement will not tie — so the file goes back with a note asking you to recheck the statements, which tells you almost nothing about what to fix.

Understanding why that happens saves a fortnight, and it is not complicated once you see the structure.

Why do the forms disagree?

Because they are not seven separate documents. They are one financial model presented seven ways, and each one derives from the last.

Follow a single assumption through. You project sales growth of thirty per cent. That figure sits in the operating statement. But higher sales mean higher receivables, which appear in the current assets form. Higher receivables widen the working capital gap, which changes the permissible finance calculation. A larger facility changes the interest cost back in the operating statement, and changes the gearing in the ratio analysis. And every one of those movements has to be explainable in the fund flow statement.

Change the sales figure and you have changed six forms. Change it in one and you have a file that does not reconcile.

What are the actual failure points?

What the bank sees	What usually caused it
Fund flow does not balance	Net worth moves without profit or capital to explain it
Receivables inconsistent with sales	Collection period assumed but never applied to the projection
Inventory unchanged while sales double	Stock projected as a flat figure rather than a holding period
Interest cost does not match the facility	Operating statement written before the MPBF was calculated
Historicals differ from audited accounts	Figures rounded, restated or taken from management accounts
Depreciation inconsistent with fixed assets	Capex added to the balance sheet but not to the P&L
Current ratio below the screen	MPBF method applied without checking the resulting ratio

The first row is the single most common. If your projections show retained profit of one figure and net worth rising by a larger one with no capital introduced, the money has appeared from nowhere. The fund flow statement exists precisely to catch that, and it does.

Why does the historical data cause so much trouble?

Because it is checked against documents the bank already has, or can get.

Audited accounts, GST returns and bank statements all describe the same business. A CMA that does not match them is not a presentational difference — it reads as either carelessness or something worse, and it is the fastest way to lose the benefit of the doubt on everything else in the file.

Three habits cause most of it. Rounding figures for neatness. Taking numbers from management accounts because the audit was not finished. And restating a prior year to make a trend look better, which is visible the moment anyone compares to last year’s submission.

Historicals should be transcribed exactly, including the awkward year. A bad year with an explanation is a normal business. A bad year that has been quietly smoothed is a credit concern.

What makes projections fail the smell test?

Not ambition. Inconsistency between the ambition and everything else in the file.

A credit officer reads a great many of these. Sales doubling is not automatically rejected — it is checked against whether the capacity exists to produce it, whether the working capital to fund it has been asked for, whether the receivables reflect it, and whether the business has ever grown at anything like that rate before.

Growth that appears in the sales line and nowhere else is the tell. Real growth costs money and shows up across the statements.

The other common failure is margin that improves every year for no stated reason. If your gross margin has been steady for three years and the projection shows it climbing, say why — a new product mix, a price revision, a machine that reduces wastage. Unexplained margin expansion reads as the number that was adjusted to make the ratios work, because usually it is.

What should you check before submitting?

1. Does the fund flow tie? If not, nothing else matters — fix this first.
2. Do historicals match the audited accounts exactly? To the rupee, including the year you would rather not discuss.
3. Do receivables and inventory move with sales? Expressed as holding periods, not as flat figures.
4. Does interest in the P&L match the facility you are requesting?
5. Does the current ratio survive the MPBF calculation? Compute the ratio after the facility, not before.
6. Can you explain every ratio that falls below a screen? In a sentence, in the covering note.
7. Does capex appear in both the balance sheet and depreciation?

Working through that list before submission is considerably faster than working through it after a rejection, when you will also have lost a few weeks and some credibility.

Why is this so laborious to do by hand?

Because in a spreadsheet the links between forms are not enforced. Nothing stops you typing a receivables figure that contradicts your own collection assumption, and nothing warns you when the fund flow stops balancing.

Which is why every revision is risky. The bank asks for a change to one assumption, you update three forms, forget the fourth, and resubmit something less consistent than what you sent first.

We are building a tool within StartYourIndustry to handle exactly this — a model where changing an assumption updates every dependent form, and the reconciliation is checked rather than hoped for. It is in development rather than available; if that is a problem you have, tell us and we will let you know when it is ready.

Last verified: 22 August 2026. A general explanation of a bank process, not financial advice. Formats and screens vary by bank and change — confirm with your bank or a chartered accountant.

Common questions

The bank said “recheck the statements”. What do they mean?

Almost always that the fund flow does not tie, or that two forms disagree. Start there rather than re-reading the whole file — and if you cannot find it, ask the officer which statement failed. Most will tell you.

How many revisions is normal?

One or two on a well-prepared file, usually about assumptions rather than arithmetic. Repeated returns for consistency errors is a sign the model was assembled form by form rather than built as one.

Should we present the weakest year, or leave it out?

Present it, with the reason. It is in your audited accounts and the bank will see it. An explained bad year is ordinary; a missing one invites the question of what else is missing.

Does a covering note help?

Considerably, and few applicants write one. A page explaining the growth assumption, any ratio below a screen and any unusual movement gives the credit officer the argument they would otherwise have to construct themselves — or not construct at all.

More on this: what a CMA report is and projections a bank will believe. See also StartYourIndustry.