World  Business and Economic Analysis 

 

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A complete “inside” point of view on the financing decision making process when analyzing a financial request.

One of the biggest mysteries remains with developers and companies is knowing how the financiers – Banks, funds or investors make the decisions to finance or not finance a project  while choosing the right projects and making their analysis phase.

 

Having a great idea is usually not sufficient in getting the financing desired for your project or company, especially in the challenging time we face now, after the world crisis and instability of the global market.

However, having years of  experience in managing and applying projects to be financed, we have gathered for you 5 of the most important points which will help your project and company to glitter above the other, get better attention and attract better position and offers from your desired financier.

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Tip number 1 – Create a feasible project

Feasibility study, as long as may be, may not always convince the reader your project is feasible and viable.

A feasible project must show, easily, clearly and simply that your project can generate great sources of incomes, keeping the project safe for the owner and for the investor.

Highlight your potential and abilities to become market leader in your niche.

Use professional experts services company for preparing the Feasibility study or prepare it yourself subordinated to an approved acceptable template.


Tip number 2- No Room for Mistakes

The fact there is no room for mistakes, will not leave you any options for modifying your concept or plan after applying to a financier.

Take into consideration that, it doesn’t matter if it’s a bank, fund or a private investor, the financiers analysts are analyzing tens of applications per day having the immediate instincts to find your mistakes and immediately disqualify the file.

Sometimes, when observing the file, simple mistakes will deny the file from financing, without even giving you any explanation for their negative answer.

Remember, you can’t correct the study, or the strategy chosen when you apply. This can be made only BEFORE you start any application process.

When your file is rejected by a financier, probably, it won’t have the chance to apply again, and if it does, it will probably not have the chance to succeed due to the bad impression that the financier already has about the file.

Summarizing this Tip, prepare your Project file and financial structure BEFORE you apply to the Financiers.


Tip number 3 – strong management

Having a strong project management is crucial for your success.

Actually, one of the lessons taught from the last global crisis was based on weak management structures and the fact that financiers were not putting enough attention to this area when analyzing their chosen projects.

Gathering a strong management team, with relevant years of experience, will make the financiers trust your company and the success of your project.

In case you are a startup company, or located in developing countries where strong management are not very accessible, we may find together creative solutions to create a strong local team backed with some external help.


Tip number 4 – the right location

Having Mentor finance activity mostly in developing countries, we find out daily how hard it is to recruit attractive financing or any for developing markets.

Many local companies feel as if they are locally strong, that they may attract good foreign financing but the reality shows this is not exactly the situation.

Developing countries (such as – former USSR countries, Africa, India etc) are considered to be high risk in the eyes of the financiers, which automatically exclude most of them as they have no appetite to invest in high risk locations and risk their clients’ money.

Future to that, high risk means higher guarantees from the borrower, meaning you will pay eventually more than the normal rates given by this financier or bank to their local client.

And finally, most of the financiers do not have access to these countries, they do not manage branches there or any other team members that would have a direct opinion about the local market and its potential.

Here at Mentor, it took years of practice and connections to build a strong network of financiers that are interested and open to finance our selected projects, adding to that a professional preparation of the file and choosing the best financial structure that significantly increases the file success rates.


Tip number 5 – Low risk projects

What makes a project low risk?

A great feasibility sources, a very strong manager, a consisted approach and the right location. Having all that will give you the right starting points and now all it takes is having the rights connections…

Source:

http://www.mentor-finance.com

           

 

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کتاب عملیات بانکی در عرصه بین الملل -سرفصل ها،ضمائم ،توصیه صاحب‏نظران ارزی و مدیران ارشد بانکی

Investment Consulting &Project Finance

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