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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. Lending institutions, banks, and NBFCs provide this type of loan.

Key Features to Avail Project Financing in India

Advantages of Project Financing in India

Future cash flow funding
It can be arranged for Capex and Opex
The moratorium for the repayment period
You don’t need 100% collateral
Good Interest rate
Longer repayment tenure reduces the repayment burden

Project Financing Types

Project financing is of two types in terms of the collateral required – Primary and secondary.

The primary form of collateral is the project itself. And the secondary collateral is the value of the loan and this collateral is apart from the project. The reason for this basically, is the profile of the company. How old is it? whether it is a newly established firm. or a firm that has been in business for many years? The risk factor involves the perspective of banks and lending institutions.

Understanding Project Financing

Project funding is the process of raising capital for a project. It can involve investors’ funds, as well as loans that must be repaid once the project starts generating cash flow. Hence, This is one of the key aspects of project funding.

1. It is non-recourse

In project financing, the borrower is not liable to obligations in the cases of default. It is a type of mortgage that banks take while financing the project when discrepancies like the borrower being unable to make the partial or complete repayment of the loan. Banks, financial institutions, and lending firms use that mortgage to recover the loan amount. Thus, their recovery will be identical to the mortgage value, and cannot exceed it.

2. Multiple participants as lenders/investors

As this loan is taken for long-term, large-scale projects, there is the participation of multiple entities which ensures the process is collectively smooth, and fast.

3. SPV overview

The SPV (Special Purpose Vehicle) keeps an eye on the proceedings of the project. It also maintains a line of sight at the assets. So, after the completion of the project, asset allocation is processed with regards to the Special Purpose Vehicle which monitors all of that.

4. Revenue from the completed project for repayment

The cash flow that the project generates after completion is therefore used for the repayment of the loan. A credit rating of the sponsor has minimal impact on project funding

Benefits of Project Financing in India

There are many benefits of project financing due to its specifications. So, here are some of the major benefits of project financing:

1. Risk-sharing

There is an opportunity for risk-sharing in project financing. It is due to the presence of multiple entities such as lenders or investors. The scope of risk-sharing in project funding is a collective one, this also minimizes the risk at the same time.

2. Extending the debt capacity

The debt would not fall on one lending institution or investment firm. Thus the capacity of containing debt is also enhanced due to the presence of multiple entities.

Financing projects through general project finance enables the sponsors to retain the confidentiality of vital information. It is regarding the project which is going to be financed. It is keeping up with the competitive market through competitive advantage.
Any introduction of new industrial technology, or development and commercialization of a new product/service, these types of projects fill perfectly. It is in the project financing eligibility criteria for the project.
Projects based on the improvement of existing products or services are also completely eligible to receive project funding.
Sustainable projects, such as those that reduce material consumption or optimize costs, and projects that use modern technology are eligible for project financing.
The project must be justifiable to the investors and lending institutions. A new and exclusive opening of an aspect that would be commercialized in the form of a completed project. Once the lending facilities are convinced, the project will generate considerable cash flow. They can provide the funds with reliability.

3. Interest Rates

The interest rate depends upon the profile and overall feasibility of the project. The investors and lending institutions decide on an interest rate. So, however, in some cases the project financing interest rate factor is absent. It is all dependent upon the cash flow generated after the completion of the project.

Understand Project Funding from FAQs.

Apply for Project Financing in India with Terkar Capital

Project Financing focuses on procuring the funds required for a specific project. It is a unique way to raise capital for large-scale projects through a combination of debt and equity instruments. Unlike traditional loans, project financing focuses on the project’s future cash flow for repayment, not the borrower’s credit history. This makes it suitable for ventures with significant funding needs.

Hence, at Terkar Capital, we facilitate project financing in India to raise the capital required to complete your project. Apply at ease!

What sets us apart?

1. Fast Turnaround Time

We cordially track the deadlines and make our quality tangible, while executing finance projects well ahead of time.

2. Confidentiality

At Terkar Capital, We comply with the highest professional confidentiality standards. All client information is discussed in strict confidentiality.

3. Competitive ROI

We find you the right lenders with similar terms and the lowest rate of interest.

4. Hassle-free Processing

Creating a stable ownership structure for financiers by establishing a secure transaction process.

5. High Level of Integrity

We are building our reputation through reliability, integrity, and honesty. We connect to our clients on personal grounds that include transparency and liability.

Client's Testimonial

What our clients think about us?

H Tamhankar

We are very thankful to Terkar Capital for your efforts in arranging facility. Their approach is very simple, professional, and fast! The team is highly responsive that executed the process in short span of time without any hassles. Great work... Thank you!

J Agwan

Terkar Capital is upright at delivering specialized funding needs. They implement what they state. Because of you, we're able to make our business reach an exponential level.

A Waghmare

Obliged for the services by Terkar Capital in helping secure funds for the business. They offer a broad range of advanced funding solutions and deliver financial solutions that are right for customers. Grateful for the services rendered by your firm.

C Sonawane

Thank you Terkar Capital for processing my business loan in just a few working days. Very professional & skilled team. They understood my requirements to a level that were beyond my expectations from any lending company. I strongly recommend Terkar Capital.

Project Financing in India

Key Features to Avail Project Financing in India

Advantages of Project Financing in India

Project Financing Types

Understanding Project Financing

1. It is non-recourse

2. Multiple participants as lenders/investors

3. SPV overview

4. Revenue from the completed project for repayment

Benefits of Project Financing in India

1. Risk-sharing

2. Extending the debt capacity

3. Interest Rates

Apply for Project Financing in India with Terkar Capital

What sets us apart?

1. Fast Turnaround Time

2. Confidentiality

3. Competitive ROI

4. Hassle-free Processing

5. High Level of Integrity

Client's Testimonial

What our clients think about us?

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