Project Loan in Delhi – A Long Term Source of Funding
Project loans are generally defined as a long term secured debt extended by public and private finance institutions to the corporate sector. Project loan in Delhi are provided to businesses to finance their long term projects maturing between 5 to 15 years. The funded amount is then repaid through monthly or quarterly installments or by sharing the profit. All the funding and repayments are governed by loan agreements and undertakings.
Since promoters and equity shares cannot fulfill the capital requirements for a big project, that’s where project loans come into picture. These loans are regarded as a long term source of funding to finance long term projects in industries like real estate, manufacturing, and telecommunication.
These loans are highly suitable for the type of projects that require heavy funding. Such projects are long in duration and in which complete investment is not possible by a single investor or promoter. Since big project take a good amount of time to produce good returns, a long term perspective becomes imperative to sustain the business operations.
Project loans are usually provided by big banks and reputed private lenders. Sometimes a project takes more than two lenders to come together to fulfill the requirement of the funding. Projects can range from expansion of business to technology upgradation. And the underlying fact is that project loan can be secured for any corporate purpose given it extends for at least 5 years.
Advantage of Project Loan in Delhi
One of the most important advantages of going for project loans is financial leverage. With funds provided by a lender, you can try to magnify the returns to your equity shareholders. This apparently helps the management of the organization achieve the core objective of capital maximization and also to preserve the control and share of present shareholders.
Things to know for Project Loan in Delhi
Repayment in project loans is done through installments just like in any other loan. These installments consists both principle and interest. Generally, the interest rates are decided by the lender’s policy and borrower’s cash flow capacity. Duration of installment is also decided under the loan agreement. It can be monthly, quarterly, annually, or even biannually. Installments are structured considering the type of borrower’s business. There is also a grace period in which bank or lender asks for very low installment or no installment at all.
Maturity of project loan usually extends from 5 to 10 years because forecasting the situation of business beyond 10 years is a difficult task to do. All these important points are mentioned in the loan agreement which is formed after long discussions and negotiations. For any other enquiry on project loan in Delhi, write us through comments.
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