Every year there are lots of new entrepreneurs who are incorporating their business. The most common factors of these business owners are to raise money as their working capital from the markets through suitable project financing. We do project financing irrespective of the territories or boundaries. Our only notion is to maximize profits on our investments. There are two feasible ways of our project financing attracting different business owners as follows.
Debt– through the Debt process of project financing we extend our monetary supports to those businesses that have to be paid within the time stipulated. The business organizations have to give us security by way of providing secured asset values that equals and or higher to our loan amount. If the loan has not been paid in the set time mentioned on the contract we would have the right to procure our money either by selling the assets or equivalents.
Equity – With the equity process the business houses don’t have to put anything as security. We would have direct participation in the equity stake of the organization, including voting rights and cash flow associated with that said equity stake. There is the other way which is known as the “Hybrid” way of financing, a combination of both Debt and Equity is involved here. This will be the best way of taking project finance depends upon the specific circumstances and requirements of the organization.
Project financing has enough benefits as we discussed above though it has some limitations also. In general terms project financing is nothing but to generate more returns or profit through capital outlay. This kind of expenditure will engender future benefits or advantages if it is properly planned. In Prominence, we have experienced project financing masters who can foresee the viability of the project either it could produce more returns. Generally according to the market thumb rules a stake of 30% or more equity to be offered to the project financers who is going to fund 70% of your total project cost.