Financing Sources Of Investment Projects Part 1

It is known that investment projects demand considerable costs, especially the projects implemented in real estate field. Being considered as the most reliable capital investments, the real estate becomes also most financially capacious. Search of means at the initial stage when in the project nobody trusts except for the author of idea becomes a massive problem. Practice shows that financial partners appear later when it is already enclosed about third of general sum of investment. If your company possesses unlimited financial resources – problems aren’t present. But in most of the cases it is necessary to search for additional sources of financing.

Investment projects in real estate field can be divided on two categories. One are financed that is called, “from the pocket”, others – for the account from attraction of credit resources. However, the requirement for additional money resources can arise not only in case of total absence of own means. The credit can be necessary, for example, if there are additional, not considered earlier building and financial risks. Other occasion address for the financial help there can be a refusal one or several coinvestors from the obligations on project financing.

What it is possible to do in that case?

For the project implementation it is possible to take the credit remaining thus the unique investor. It is possible to involve investor-partner as individual share in building with the subsequent redistribution of the areas.

And, at last, it is possible to concede the rights to the termination of building of object to other investor. As a whole investment projects in real estate field which demand attraction of the finance from the outside it is possible, again, to divide on two categories: projects in which crediting is led from a zero stage of building, from the very beginning and projects where the credit appears when the object of real estate is partially ready.

As practice, in the first case shows, reception of bank loans is almost impossible except as specified when the Borrower has other reliable provision. Usually similar attempts come to an end with enterprise sale on which all is arranged and estimated.

The second variant for credit reception is absolute readiness of the project and permissions, and also availability of own contribution to the project. Let’s present that the credit is already received. Now the investor-developer can go on the way optimization of percent or a parallel investment to the project of credit and own means.

Irrespective of origins of requirement for additional financing, the project which is already being at a stage of realization is more attractive to banks. Here arises that the object of construction in progress can represent itself as pledge, end of building demands less time, hence, credits will be shorter.

It is very crucial that government, despite this crisis is not leaving to assist small businesses. And small business grants can be a true helper right now.

But, of course, you should understand that today the fight for small business grants as well as for other types of grants is more fierce. This is logical – more businesses need them. So before you start your battle for the small business grants, please check out this blog for more
details about grant industry.

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