Project Financing / Implementation
Any venture starts with an idea as to what to do, how to do. This takes us to search at what capacity it can be done and funds required, funds available and how arrange required funds.
Once you conceive the idea you can discuss with us and we shall try to give you the way how to go about converting your idea into a venture. The first step would be to find the prospects of the products you propose to manufacture or trade or export, how to arrange the products, either to buy for reselling or manufacture. Then comes how to arrange required funds.
Any entrepreneur or businessman may intend to start a new venture For manufacture, storage, or infrastructure providing, or for expansion or diversification or modernization of a product or services and may look for financing. This is known as project financing. In project financing the future income of the project, present credentials of promoters and collaterals are taken into consideration. We try to arrange subject to eligibility project finance from banks/nbfcs.
The interest rate depends on the profile and risk. In project Finance, the economic, technical and commercial Viability of the project is analysed. The project finance is decided on the projected income, projected ROI.The collateral offered is to be 100% or atleast 80% Of the loan amount. In project financing and implementation time is essence as time overrun leads to cost overrun.
The project cost consists of land (may be own or to be purchased or on lease), building, plant and machinery, furniture and fixture, installation and electrification, preliminary and pre-operative expenses, and margin money for working capital.
Working capital consists of expenses required for purchase of raw material for the cycle of product (ie from the stage of starting Manufacture or (placing order in case of trade or storage) to the stage of getting sale proceeds of the product), salary and wages for cycle of product, bills receivable, office expenses for cycle of the product.
The arrangement for fund may be own capital, loan from banks/ financial Institutions, unsecured loans, or raising capital from public subscription.
The banks/FIs may finance upto 80% to 85% of the fixed assets and current assets. The salary and wages, office expenses and other cost of intangible assets are to be borne by the promoter from hiscapital. Hence usually 30% of the project is to be borne by promoter.
The usual documents required and or eligibility criteria for availing project loans are:
- Last three years balance sheet and profit and loss account of the firm/company with schedules
- Las three years ITRs with schedules
- Last three years turnover figures.
- Bank statement of the company for last one year from all the banks where account is maintained.
- Company registration certificate (certificate from Registrar of companies/registrar of firms/or Proof of proprietorship firm registration)
- GST certificate and no.
- Any license like factory license/export import license/shops and establishment act license etc.
- Details in brief of the assets.
- Net worth details of the company as on recent date.
- Any cheque bounces during last one year and in case any cheque bounces reasons.
- Any legal disputes
- Company pan card (in case any)
- Land and or building plan approvals of existing land and building/layout
- The land documents ie sale deed, khata, mother deed, approved building plan, Rent receipts of the land.
- Project report in brief. The DPR may be given at later stage or initially also.
- Projected profitability statement ie profit and loss account for next 8years or atleast 5 years Depending on expected loan period
- Projected cash flow statement for next 5yrs or 8 yrs.
- Proposed land and building details and approved plans.
- Bank statement of all directors/promoters for last one year
- ITRs of all directors/promoters for last three years with schedules.
- Cheque bounce details of directors/promoters for last one yr in case of any cheque bounces.
- Credit card statement of directors/promoters for last one year
- ID proof and address proof of all directors/promoters
- Qualification and experience details of directors/promoters
- Net worth details of all directors/promoters as on a recent date Ie assets and liabilities position of directors/promoters as on a recent date.
With these details financial institution/bank/private financier may be able to take a decision to allow finance or not. Once they decide Then they will take for a inspection/valuation of the assets and make enquiries about the company/firm/individual. Once they are satisfied with the enquiry/inspection/verification they will process the loan proposal. Then they will verify the legal documents and take legal opinion on the land documents and once it is okyed by advocate banks//fi will start for legal agreements and after entering into agreements, they will disburse the loan in suitable instalments depending on the progress of implementation.
We can take up project implementation works on selected basis at our discretion provided you have tie up arrangement with technical persons for technical aspects. We can arrange supervision of projects and advise you from time to time till trial run how to proceed further except on technical aspects.