Project Financing

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Finance procedure 

Usually for a project to be accepted for financing, a professional-quality Business Plan is required together with an official Letter of Request to Fund signed by a person who has been officially authorized by you’re your company's Board of Directors.

A) Are your Business Plan complete?  Is it at least 15 pages, preferably more? (60-100 is a good size for a full Business Plan, 15-20 is more suitable for an Executive Summary; always be thorough and complete!  Remember that potential lenders / investors may not know you at this stage and the thoroughness and presentation of your business plan reveals yourself to them). What seems obvious to you still need to be explained in the business plan.  They may be new to your particular field. Do assume anything but explain even the obvious.

B) Did you include all financial projections, background information on your management team, cost estimates, descriptions of your product or project, time estimates for completion of construction, and any other relevant information for the Lender?  This section will definitely be scrutinised carefully and the figures should be 100% correct and any assumptions made clearly described.

C) Did you provide official letters or documents to support your Security / Collateral? Evidence must prove that you have the Security or Collateral to guarantee the principal and the interest on the loan. It will be to your advantage if you can prove that you have a standby letter / line of credit from a Top 100 bank equal to or greater than your loan request.  It is important to include all documentation that the guaranteeing bank will provide to you.

For Project Finance only  – Your Letter of Request to Fund must be complete, and signed by a person with legal authority to do so.

A) Did you state the exact amount you need and in the case with international applications it is important to include the "obvious" currency as well.

B) Did you include a Corporate Board authorization statement, signed by the head of your company, which authorizes you to sign legally binding documents on behalf of your company?

C) Did you make sure that the Letter of Request to Fund is signed and that you've included your company's seal, or a Notary seal? Be sure it is on your own company's letterhead! 

Borrowers who understand the importance of good documentation and good collateral, will almost always obtain good financing and excellent interest rates, no matter how large the loan is, and no matter what the purpose.

If you were a Lender, you would want to be absolutely sure that you would be repaid your money, even in the extremely rare or worst case of a disaster, bankruptcy, etc. by the borrower. Give the Lender maximum confidence and assurance that he will not lose his money by lending to you. He should feel comfortable with the lending of his money.

IN PRACTICE, ONLY ORIGINAL BOUND COPIES OF BUSINESS PLANS ARE ACCEPTED
(No facsimiles or email copies are usually accepted in the market place) 

Selection of the lenders depends on what kind of project you may have, the amount of money you are requesting and the risk factor associated with your venture. 

No fees should be required by the facilitator until the deal is funded. The facilitator should be paid only when the loan is approved and funded. The facilitator or its agents should not collect any fees from clients.