According to the World Bank, bank loan for large project financing should play a decisive role in the recovery of the global economy after a devastating pandemic and give companies a new impetus. Bank loans fill niches and stimulate the implementation of investment projects in areas where the private investor does not want to interfere. They fuel large strategic projects, providing businesses with quick access to finance.
Bank loan for large project financing remains and investors choice of financing and also most important sources to fund project.
Viola funding Limited finances the following projects:
• Wind farms and large solar power plants of all types.
• Combined cycle thermal power plants and other conventional energy facilities.
• Construction and modernization of industrial facilities.
• Mines, quarries, mining and processing plants.
• Capital-intensive commercial real estate.
• Large infrastructure facilities.
• Environmental projects, etc.
If you are looking for a long-term investment loan on favorable terms, contact Viola funding Limited and outline the details of your project.
We finance large businesses, providing funds for the construction of industrial, infrastructure, energy facilities around the world.
Bank loan as a basis for debt financing
Considering the sources of capital, we can divide it into equity and debt capital.
Effective commercial and investment activities are virtually impossible without the periodic use of debt financing. The need of large business for lending can be explained by both general economic reasons and some specific needs arising from the implementation of projects.
The main purpose of using bank loans for large project financing include:
• The complexity of forecasting the company’s need for working capital.
• Seasonal fluctuations in production and sales of products.
• The need to implement large investment projects.
• Other features of a specific business.
Growing competition in all these areas has led to an increase in demand for debt financing. The implementation of large investment projects, the introduction of new products, services and innovative technologies gives a competitive advantage, but such activities require knowledge, experience and, most importantly, large investments that exceed the resources of the business.
Long-term loans enable companies to remain highly competitive and effectively address the various challenges posed by a dynamic globalized market and its participants.
The role of bank loans in financing a large business
For centuries, banks have financed businesses lacking free money. As a result, companies of all types and sizes can pay off their debt obligations and make investments on an ongoing basis.
Bank loan is considered one of the oldest economic categories, and experts call lending the heart of commercial banking.
Lending activities of banks are carried out through the use of money placed by other clients. Thanks to these funds, banks can provide loans for various purposes at an affordable price, which often influences the decision of entrepreneurs to use this simple source of financing.
In general, firms with better financial health use more external funding. Larger and more experienced businesses, as well as companies from the industrial sector, are more likely to get access to long-term bank loans compared to small and medium-sized businesses.
Bank investment loans for large projects
Investment loans are issued by banks for companies for specific purposes that serve the development of business.
This can be a modernization of a production line and even large investment projects such as the construction of a power plant or a new factory.
Due to the fact that the bank transfers large amounts of money to enterprises with a high degree of risk, the decision to issue an investment loan depends on many conditions.
The vast majority of banks will only consider applications from companies that have been on the market for at least 1-2 years. The application is a key document, since on the basis of the documents contained, the bank will determine the reliability of the applicant.
To obtain such financing, the company must provide adequate collateral and its own contribution, usually amounting to 10 to 30% of the planned investment costs.
The business plan should contain a detailed description of the project, including all the components necessary for the effective implementation of the investment, the original project plan / schedule, benefits and risks. First of all, the business plan should include an estimate of all costs associated with the investment. The estimate should include information on the amount of own contribution to the project, indicating the seriousness of the applicant’s intentions.
Viola Funding Limited finances up to 90% of the cost of large investment projects, providing clients with flexible financing for a long time.
After submitting an application, the bank conducts a comprehensive analysis of the current situation of a potential borrower, carried out by analysts on the basis of the documents provided.
Restructuring of bank loans
The restructuring is aimed at improving the client’s financial position, while at the same time helping to return to the timely payment of financial obligations.
Restructuring of bank loans provides for changes in conditions and their adjustment in accordance with current business opportunities. In particular, the bank may change the repayment schedule, which is usually accompanied by an extension of the debt repayment period. On the other hand, the total cost of the loan for the borrower also increases.
In this simple way, banks support clients who are struggling to pay off their debt, and at the same time generate profit in the form of increased value.
Situations requiring loan restructuring
Banks restructuring are geared in the following cases:
• Force Majeure. The consequences of some local events and global crises, such as a pandemic or an increase in geopolitical tensions, can affect the financial condition of borrowers and jeopardize their projects.
• Temporary problems with financial liquidity. Sometimes a company’s unexpected spending poses a threat that requires restructuring while the business recovers its financial health.
• The income of the borrowing company has decreased significantly. This problem is especially true for large investment loans with a long maturity, when the success of an investment project depends on many factors.
It is important to resolve the issue of restructuring a business loan through a deep and comprehensive analysis with the involvement of highly qualified financial consultants.
Options for restructuring a bank loan for a large project financing
The bank can restructure a business loan by changing the debt repayment schedule, adjusting the interest rate, providing grace period or by other means, depending on the agreements reached.
Business loan restructuring is gaining popularity and is increasingly featured in bank proposals.
Banks do not discourage customers whenever possible, but this procedure requires careful planning and preparation.
The underwritten team of Viola Funding Limited is always ready to help large business in matters of bank loan restructuring and refinancing.