Project Financing in India

When starting a new project or introducing a new aspect to the business, functioning doesn’t meet the planned finance schedule all the time. Some financial leverage is needed to make the project come to reality. Thus, project funding comes into the picture. Project Financing addresses the monetary requirements of the exclusive project. It means a loan obtained for fulfilling the finances that a new project brings along with it. Here the collateral is the project itself. So, it means the loan can be repaid after the project is completed or begins generating revenue.

Thus, unlike unsecured loans, it is the funding of infrastructural or industrial projects on a long-term basis. The project commences the cash flow once it has been completed. It is a common type of financing. Thus, used widely in the Indian market industry. Financial institutions, banks, and NBFCs provide this type of loan.