Project financing is a way to raise capital for the implementation of large investment projects. One of the sources of return on investment and loan collateral are cash flows generated by the project itself.
DCG EASTERN EUROPE S.R.L. is active in the financial markets of the EU and the USA, has direct access to a wide range of funding sources - Western financial institutions that are ready to carry out trade lending for businesses with adequate structuring of the transaction.
At the stage of raising funds, acting as an investment banking consultant, DCG EASTERN EUROPE S.R.L. participates in negotiations with financial institutions - sources of financing and makes every effort to ensure the most attractive terms of the transaction for the client. Project financing is one of the forms of business financing that may be in demand in the face of a lack of investment funds. Equipment manufacturers, leasing and financial companies, insurance companies, various contractors and government organizations, as well as banks can participate in project financing.
In essence, project financing is a long-term lending, however, the main difference between these mechanisms is that if ordinary bank loans are issued against the security of the property of companies and are repaid at the expense of their assets, then project financing is provided for an idea, for an investment project. and the return of funds is associated with the implementation of the project, ensuring its necessary profitability. This approach brings this type of financing closer to investment.
Who are the participants in project financing:
- Initiator of the project
- Commercial banks
- Investment banks
- Investment funds and companies
- Pension funds and other institutional investors
- Leasing companies
- Other financial, credit and investment institutions
What are financing instruments:
- Bank loans
- Leasing
- Letters of credit
- Direct investments (equity capital)
- Commodity credits, etc.
David Consulting Group offers services for large and medium-sized project financing:
- Project financing - large projects, loans from 10 million Euros (equivalent in another currency).
Requirements:
- Having a strong administrative resource (so that the governor can sign all letters and, if necessary, call in person)
- Availability of own funds (at least 20% is required), they can be shown by assets (by making a revaluation on the balance sheet). Assets without which the project will not take place, for example, deposits, site, project documentation (at book value), etc.
- The presence of a company with large turnover (revenue must be at least 75% of the loan amount, and in any case at least 20 million euros)
- The cost of the project is not less than 20 million Euros, of which the loan amount is not less than 10 million Euros.
- Payback period not less than 5 years
- The presence of sane initiators
- Availability of funds from the initiators, since there will be expenses ranging from assessment, preparation of a feasibility study (feasibility study) and financial plan, ending with representation expenses
- Project financing - medium-sized projects (financing from 2 million Euros to 10 million Euros (equivalent in another currency)
Requirements:
- Highly efficient project with an understandable commodity market and sales market
- Availability of clear initiators
- Availability of funds from the initiators, since there will be expenses ranging from assessment, preparation of a feasibility study (feasibility study) and financial plan, ending with representation expenses
- Availability of own funds (25-30% required). As a rule, the initiator invests (places) his own funds first, but a phased investment of funds of the initiator and the Bank is also possible.
- As a rule, the presence of an active business. Exceptions are possible, but rare.
Requirements may vary depending on the project. These are the basic requirements.
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