Online Campaigns, Online Advertisement and Common Sense

Project Financing As A Method Of Business Start Up

As a rule, the successful companies working in sphere development or in an occupational sector are interested in project financing of the average size. In the development sphere there is a financing of building of new trading complexes or office centers. That is curious, production enterprises often start to build trading companies which effectively develop business and in this connection make the decision on opening of a partial or complete cycle of production.

If to speak about a branch accessory of consumers of project financing it is possible to note a considerable quantity of developers and the building organizations, the companies which are engaged in production of construction materials, the thermal power station companies, and also the companies working in sphere of entertainments.

Nevertheless the chief of department of project financing of Credit administration of Open Society doesn’t consider that project financing is limited to only listed industries. This product can be interesting to any company which doesn’t have adequate security for credit reception in bank on financing of the projects, but there is an attractive project (business idea) which can be interesting to consolidated financing of bank and investors.

Experts have found it difficult to estimate volume of the market of project financing. The data isn’t published today as properly banks don’t show real structure of the transaction on project financing. Today many banks which declare availability in their portfolio of contracts of project financing, actually credit investment programs of the shareholders, naming it project financing.

Actually the bank in this case acts as only passive intermediary; it simply restacks a measure of responsibility for projects implementation and return of means for the shareholders, leaving for itself function of operational servicing of credits. While volumes of the market of project financing aren’t so great, though positive dynamics of growth is available. Project financing occupies an order 10 ? 15 % from a portfolio of corporate crediting according to the statistic.

Project financing is a packet deal which is performed with application of different standard credit products (investment and tied credits, leasing, guarantees, letters of credit and etc. The kit of “standard” products as a part of project financing is determined by each concrete case. Unlike the usual credit, in project financing there is no ?uniform recipe? and standard procedure, in each separately taken case all individually. The final rate and term of granting of financing are determined depending on industry in which the project is implemented by a railroad train of participants and degree of responsibility of each of them, credit history of the company which has addressed for project financing, and many other factors.

Experts notice that now to receive project financing for long term became where easier, than earlier: the companies have longer credit history, a situation in many industries became much more predicted and investment “horizon” became longer.

It is very reasonable that government, despite this recession is not leaving to assist small businesses. And small business grants can be a real helper today.

But, of course, you should understand that today the fight for small business grants as well as for other types of grants is harsher. This is logical – more businesses need them. So before you start your fight for the small business grants, please check out this blog for more
details about grant industry.

Tags: , ,

Leave a Reply