A credit information memorandum (CIM) is the primary document a borrower presents to private credit lenders when seeking structured debt in India. It is the equivalent of a pitch deck for equity raises — but where equity investors are evaluating growth potential, private credit investors are evaluating repayment certainty. A well-prepared CIM compresses a lender's due diligence timeline by 30-60 days and materially improves the terms available, because it demonstrates that the borrower understands their own credit story and has anticipated the questions a lender will ask.
Most businesses approach private credit lenders without a formal CIM and then respond reactively to due diligence questions. This approach is slower, results in more back-and-forth, and signals to lenders that the borrower has not prepared adequately — which affects the pricing and terms offered.
The seven sections of an effective credit information memorandum
Section 1 — Executive summary. Two pages maximum. The business overview, the specific debt requirement (instrument, amount, tenure, purpose), the proposed security package, the debt service coverage at base and stress scenarios, and the requested decision timeline. The executive summary must be self-contained — a lender's credit screening team should be able to make a preliminary go/no-go decision from this section alone.
Section 2 — Company overview. The business model, the products or services, the revenue history for 3-5 years, the customer base, and the geographic footprint. For manufacturing businesses, include production capacity, capacity utilisation, and key raw material sourcing. For real estate developers, include the project portfolio with completion status. For healthcare operators, include the facilities, bed count, specialties, and payor mix.
Section 3 — Financial analysis. Three to five years of audited financial statements with a clear ratio analysis: revenue growth, EBITDA margin trajectory, net debt to EBITDA, interest coverage ratio, working capital cycle (debtors, creditors, and inventory days), and free cash flow generation. The financial analysis section must include a management explanation for any anomalies — a revenue decline, a margin compression, a spike in working capital — because lenders will identify these and ask about them regardless.
Section 4 — Debt service analysis. This is the most important section for a private credit lender. Project the cash flows available for debt service over the proposed loan tenure under three scenarios: base case (management projections), conservative case (10-15% revenue decline, margin compression), and stress case (more severe deterioration). Show the DSCR — debt service coverage ratio — under each scenario. If the DSCR drops below 1.0 in the stress case, explain what management actions would be taken and what additional security protects the lender.
Section 5 — Security package. Detail every security element being offered: first charge on land and building (with current market valuation from an approved valuer), assignment of receivables (with the current receivables book and average debtor days), personal guarantee from promoter (with a statement of personal net worth), and any additional security (share pledge, fixed deposit lien, stock charge). Each security element should have a legal status — encumbrance-free, existing charge that will be released, or subject to other lender approval.
Section 6 — Management and corporate governance. Founding team bios with relevant track record. Board composition. Prior debt obligations — complete list with lender name, amount, tenure, current outstanding, and repayment status. Any defaults, restructurings, or regulatory actions — declared upfront. Lenders will discover undisclosed information during due diligence. Proactive disclosure manages the narrative; reactive disclosure creates concern about what else has not been disclosed.
Section 7 — Transaction summary and use of proceeds. The proposed instrument, amount, tenure, coupon, repayment structure, and security. The specific use of proceeds — not "expansion and working capital" but a line-by-line breakdown of what the capital will fund, when each tranche will be drawn, and what milestone it enables. The repayment mechanism — how specifically will the borrower service interest and repay principal, from which revenue stream, on what timeline.
What lenders flag immediately in a poorly prepared CIM
Revenue without reconciliation. A CIM that discloses revenue without reconciling it to the audited financial statements will be flagged immediately. Every revenue figure in the CIM must tie to the corresponding line in the audited accounts.
Security without valuation. Stating that the borrower offers a charge on land without providing a current valuation from an approved valuer is insufficient. Lenders need to calculate the LTV — and they cannot do that without a valuation.
Financial projections without assumptions. Three-year projections that show a straight-line improvement in revenue and margins, without disclosure of the specific assumptions driving them, are treated as aspirational rather than analytical. Projections must be accompanied by explicit assumptions — volume growth, realisation per unit, cost per unit — that can be tested against historical performance.
Related-party transactions without explanation. Significant related-party revenue or purchases in the financial statements, without clear explanation, raises questions about earnings quality. Lenders will ask about every material related-party line. Explain them upfront.
Eone Capital prepares credit packages and places private credit mandates for businesses across real estate, MSME, and healthcare.
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