India is full of talented and aspiring young minds. Among these are the blooming entrepreneurs and the visionary ones as well who are looking forward to an expansion of their enterprise. This is something that has made project funding in the country quite common and necessary. Since there are multiple agencies for funding, it is important that you choose the right funding agency for the project proposal in India. There are several perks to project funding in India given the number of blooming businesses in the country.
What is Project Funding?
Also called as project finance, understanding this concept is not as complicated as it depicts to be. The basic need is to have a reliable and practical project for funding. There are various other aspects that are associated with project finance. It is provided for business expansion, reconstruction, or for a new business venture.
Project Funding in India
As we know, the number of Indian entrepreneurs is increasing day by day. India also has half a billion SMEs that are looking forward to the expansion of their businesses. The project funding in India is aimed at helping not only start-ups but also the well-established business including small and medium sector enterprises. If you are looking for funding to help your business, you can approach the project funding agencies in India.
How to get Project Funding?
There are multiple financial institutions operating in the Indian Debt Market. However, not all of these organizations take exposure in project funding. The ones who are knee-deep in project funding are the government and the cooperative banks. Each of them has its own eligibility criteria for the sanctioning of the project finance which differs as per the changes in the macro and micro scenarios.
Before applying for a loan on a project for funding, the applicant businessperson must have a substantial cost baseline to support the project funding proposal. There are different ways of getting funds for your project. It is normally given for mid-term or long-term periods. This whole process is quite complicated and confusing for a non-finance person to understand. Which makes it even more important to choose a reliable funding agency for the project proposal in India.
Project Funding Requirements
As the name suggests, this kind of funding will be available only for projects. The project can be started by any new or existing business unit. Below are the few basic considerations for raising finance through project funding:
- Project Viability Analysis
- Future Cash Flow
- Mortgage Available
- Payback Period of The Project
- Key Personnel Profile and Relevant Experience
- Location of The Project
- Market Demand of The Product
- And others depending on the project
Project Funding Proposal
There are certain things that you need when you are drafting a proposal for project funding. Some of the pointers are given as follows:
- Goals and Objectives
The intentions and the goals that you have for the project that you are proposing must be mentioned clearly in your report. The objectives of your enterprise will make stakeholders believe or trust in your project even more.
- Assets and Liabilities
You must be able to mention the liabilities and the assets of the project in a way that stakeholder sees potential in your project. The assets must make an impact as the stakeholder is looking to provide funds to a project that has the capacity to generate enough revenue.
- Interest Rate
It is an essential factor to consider as it will also affect your repayment plan. Therefore, it is important that you provide an impressive project funding proposal. The rate of interest for the project finance depends on several factors. They are listed as follows:
- Credit Score of Company
- Credit Ratings
- Risk factors in the Project
- Traceable required proof
The proof and the documents that you provide to support your project funding proposal must be traceable and it must also be –
These are some of the aspects that will make your proposal look good and therefore increase your chances of getting the project finance. After you have had your funding for your project, you must be careful with the way you spend your funds.
Repayment of Project Funding
After the submission of the required documents, the bank will provide the needed amount once they are convinced by the project funding proposal. The amount may be sanctioned periodically and not all at once depending on the kind of project.
When it comes to the repayment of the project finance, it is retrieved from the revenue that is generated by the project. It starts when the first installment of the loan has been paid. Although, in some cases, only the interest is paid for the first few days while in some cases, the interest is paid along with the principal amount. And as mentioned previously, the interest rate on the funding of your project is already decided based on certain factors. The complete repayment structure will be shown by the at the time of installment.
Project Funding Agencies in India
While planning for a project finance, one of the most important decisions to make is to find a trustworthy funding agency for project proposals in India. Terkar Capital is one such agency that is known for its legitimacy and reliability. We at Terkar Capital arrange maximum finance with minimum collateral. Well, there are several other reasons as well why Terkar Capital is an ideal choice for a reliable project finance.