Project finance lenders are a type of lenders that specializes in financing capital-intensive projects. These lenders offer loans, debt finance, and other types of financing to businesses looking to invest in projects with mega projects that have a predetermined future cash flow or predetermined income profits that can guarantee the loan payment.
If you’re gearing up for a project finance loan you must have a genuine project, meaning that you have a credible buyer for its output when it is built. This could be a renewable energy plant with a power purchase agreement (PPA) with a regional or national grid, a hospital with a management and operating agreement (MOA) with a recognized hospital/clinic operator, or a credible feasibility study for a transport, infrastructure or similar project.
- 2 You may be able to access more Project Finance Lenders than you think.
- 4 There will be no surprises during construction.
- 6 The uncertainty and risk associated with your project will be greatly reduced.
- 8 There is currently an abundance of capital for lending, so now may be the best time to apply for financing.
- 9 Conclusion
You may be able to access more Project Finance Lenders than you think.
If you’re looking for project finance lenders, it can be difficult to know how much financing you will actually be able to get. That’s because a lender will only be able to quantify how much they’re willing to lend based on the specifics of your project.
If you’re looking to finance a project in the energy sector, for example, the lender will need to understand the type of technology that you’re using and how that technology will generate revenue. Lenders will also need to understand how much it will cost to construct your project, how long the project will take to build, and how much you’ll need to finance the operations of your business until the project is generating cash flow.
There will be no surprises during construction.
When you’re dealing with a project finance lender, they will want to be very involved in the construction of the project. Lenders are typically going to want to visit the site, talk to your engineers, and review the plans to make sure they’re accurate. If you don’t have any issues during the construction phase, the lenders will be less likely to issue you a new set of terms when it comes time for you to extend the loan or complete the financing transaction.
If issues do arise, however, the lenders will have the opportunity to restructure the loan or come up with a new payment plan to make sure you’re able to complete the construction process. In most cases lenders want project developers to have a risk mitigation plan in place before they even apply for project finance. The most common solution these days is an Insurance Wrap.
The uncertainty and risk associated with your project will be greatly reduced.
A project finance lender will have a significant amount of risk associated with your project. That’s because they’ll be financing your business based on the assumption that your project will generate a certain amount of revenue, and there’s always a chance that things will go wrong. As prospective lenders, they are always going to want to make sure that you can repay the loan and not put them in a position where they’re out more money than they would like to be.
With a project finance lender, you’re going to have to put together a thorough business plan and provide a significant amount of financial data a feasibility study completed by an independent credible entity, and a credible EPC contractor, if the project requires land this needs to be secured beforehand preferably.
Additionally, your project insurer will provide the insurance wrap of the project based on the data from all the above. They may need even more data about your project to complete a full market review and confirm if they will be able to mitigate all risks of the project the assure the investor.
There is currently an abundance of capital for lending, so now may be the best time to apply for financing.
When you’re looking to finance a project, it’s always important to understand what the capital markets are currently doing. That’s because when there is too much money chasing too few projects, it can become difficult for businesses to access financing. If there is an abundance of capital for lending, however, it’s likely that the interest rates will be lower than normal.
That’s because lenders will have plenty of capital to fund their projects and will be more willing to offer you a lower interest rate. We have access to capital sources in the sum of 144 Billion in investible funds available to fund viable projects. If you have a project that fits the model of project finance, it has a guaranteed cashflow built into it don’t hesitate to contact us here
If you’re looking for funding through a project finance lender, it’s important to understand the value of the free service that we offer here, we will quickly tell you if your project is ready for submission, meaning it has a comparing story and supporting documents to present to our investors’ community. Again apply here for free