Project Finance Today

Project Based Borrowing: The Hot New Global Contact Sport

Private lenders lend credit. So do banks. That is where the similarities end in contemporary project finance.

Bank and non-bank, private, and sovereign lenders are interested in knowing the facts of the investment, especially where it pertains to the future. All have guidelines. But non-bank and private lenders have no consumer-side money business and retail money products. Neither are they underwritten or subject to the standards under the Federal Reserve system. Banks borrow from the Fed, at minimal interest, and lend that money at a 10:1 ratio to their customers. They legally lend ten more dollars for every dollar they hold. And no one is talking about changing that. (See Recommended reading below)

In the New World, private lenders are businesspeople. As such, they act with a more critical sense and vision than most bankers dream about. They are also more exacting when it comes to telling your story to get money.

Unsurprisingly, as much time is taken to weigh the character of the borrower and would be business partner as is taken on the project itself. This is the most common mistake that borrowers make in the current climate–not being transparent and honest. Lenders and investors want to know the character of the borrower as a measure of reliability; they want to know if a borrower has “skin in the game”; they want to know the project’s actual near-term cash flow; and they will explore the sources of cash the business generates toward payback and profit.

They are looking for return of the principal–much as banks do. But, unlike banks, they are often also intensely focused on payment quality, consistency, project completion, and eventual expansion
or sale.

The Art of Business Financing in Science & Ideas

Proper financing is a value-adding process, not an event. (Please re-read this.)

This is why we assist in preparation for, introduction to, explanation and manage of the loan process. We act as a borrower broker. Targeting and selecting the right business financing comes from ongoing discussion about growing a new business in a young industry. Strong relationships, know-who and know-how have equal weight. This permits critical relationship management and meaningful communication between the key parties. In that, we can represent the borrower seeking project financing.

Throughout my research I find that clear leadership and disciplined businesses continue complement each other. Interdisciplinary thinking, such as looking at marketing and financing as co-contributing processes, supports measurable and scalable companies. They also assist in developing new approaches, structures, technology, processes, and products.

What you can do

If you have a project of scale that you would like me to review, you are welcome to contact me by email: rbailey@trustedadvisory.com. Better yet, click on this link to submit your business overview–your competitive experience, project parameters, cash into the project so far, and your contact information–with complete confidentiality. To support our borrower clients and to keep this industry as professional as possible we adhere to a strict self-imposed code of ethical and professional conduct.

We occasionally recommend deal-based coaching programs to prepare their client and project to master the financing process. We provide everything you need to prepare, refine, and present yourself and your project/business for funding.  Interested? Ask about this.

Who does best with this process? Let me ask you…

* Are you short critical funding for a well-researched & design project, technology, or Oil & Gas prospect?
* Are Federal/State financial “policies de jour” choking your staff?
* Are your design, innovation, or development project failing to achieve REAL traction with investors?
* Are you are open to trade, structured, LTN and MTN financing–but cannot get started?

Ever hear the expression, “You’re too close to the trees to see the forest?” This might apply. And please don’t be offended. The world HAS ALREADY changed, lots of people are changing their views, and their processes and practices. It’s not easy. You probably cannot go it alone.

If you have a project of scale* let’s talk. But please, first…. Won’t you summarize your project in your note and your phone and Skype contact info–so I can understand the core project? Better, submit your executive summary for our confidential review. (Please limit those to five pages.)

If you provide accurate contact information, we will do our very best to respond, directly and personally, within 24 hours.

 

Robert Bailey

Robert Bailey
Managing Partner, TrustedAdvisory Energy & Project Advisory+Funding

* Minimum Scale: $15M in project costs.
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