Project finance
Project finance is the generic term used to describe a project where the debt finance for that project is provided in reliance upon an assessment of the viability of the project. The lender's recourse is usually solely to the cash flow and, if necessary, the assets of the project, including contracts for the supply of raw materials, the sale of the finished product and a host of other arrangements relating to the continuing operation of the project. In contrast to funding the general business activities of a borrower, project finance concentrates on the financial viability of the project and ensuring that it will continue to be robust in any reasonably foreseeable circumstance, rather than placing substantial reliance on the continued creditworthiness of the borrowing entity.
Preparing your business plan
Introduction
Capitalizing your business is a full time endeavor. Developing your business plan is the single most important step you can take toward your success. To maximize your potential to receive capital, it is vital that you develop a business plan that will guide your company and allow outsiders to picture where you are going and how you plan to get there. Take great care in preparing your plan, it is the road map that will lead you where you want to go.
Lenders or Investors, which way do I go? They tend to look at transactions from very different perspectives. Lenders are mostly concerned with "Can you repay?".
While investors are more interested in "How far can you go?" There are certain items of information common to both. That will be the information to be disclosed at the start.
A business plan is a selling document. It should demonstrate that a business can sell enough of its products or services to generate a profit and thus attract investors or lenders. The overall objective of a business plan is to sell the theory of the business to potential investors or lenders as as well as to assist the entrepreneur in planning for all aspects of his or her growing business.
The Business Plan should be according to the following criteria:
The writing should be clear and concise
The writing should include the important factors but should not be too long
Special attention should be given to the layout
The is the most important part of the document as it is usually read first to get an overview of the document
Proper management qualifications should be highlighted to create a feeling of confidence
The plan should indicate that you are aware on market happenings.
Indicate who the competition is
Should not have an unusual accounting format
Project Phases
Successful businesses are well planned and well capitalized. Being well capitalized, is having the ability to access capital when you need it. Being well planned, will help you to be well capitalized.
Being an Entrepreneur is not an easy endeavor. Developing a business plan, requesting funding from strangers and facing the possibility of rejection makes it even harder.
Usually Corporations and Entrepreneurs benefit by having their business presented to a number of Lenders to which they normally wouldn� have access.
When a facilitator take on the financing of your project, he will not offer you a standardised banking product but financial services tailor-made for your requirements.
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