Sourcing business funding from project funding platforms in today modern economy can be highly diversified, from borrowing debt from banks to pursuing angel investors to crowd-sourcing funding for a small startup project.
For larger organizations this primarily revolves around debt and equity.in support of trade financing, financial modelling, and wealth management.
For smaller organizations, debt and equity are often accompanied by venture capital and crowd sourcing.
Determining Risk vs Return
Understanding the financial needs of the organization and measuring the overall weighted average cost of capital (WACC) for a venture is important in determining the appropriate level of risk and the expected level of return on that risk.
Models such as the discounted cash flow analysis to determine a net present value (NPV) of the project being funded is key to successful financial sourcing.
Organizations looking for funding should provide prospective investors with a business plan, complete with an assessment of expected demand, estimated profit, and required rates of return.
By balancing the expected profit with the cost of getting funded, potential international companies can ensure that the return on investment will justify the expenses involved in global trade.
Conventional Project Financing
You will also need a well-written, detailed and accurate business plan to give prospective lenders the complete picture of your business objectives.
Most lenders from project funding platforms will also require you to have some of your own money at risk as well. Most private lenders may require a down payment of at least 15-20%.
International funding often involves large project loans, in some cases, doing business offshore may have more inherent risks such as political and economic risks.
Large project loans are commercial loans for very large multi-purposed staged projects, for example large commercial real estate projects will fall into this large project category.
As governments continue to discuss and implement plans to combat climate change, the financing needs for building a low-carbon and climate-resilient future are high.
Climate finance for green energy like solar power plant, wind turbine, geo-thermal energy generation are high on demand.
This is a global issue demanding committed action, resources, and innovative funding solutions from both public and private stakeholders, shareholders and industry players.
Alternative Project Financing
As loans of this mega project is huge. Hence, a third party may have to come into the transaction in order to offer a Bank Guarantee/ Standby Letter-of-Credit that is acceptable to the lender.
This type of financing is usually non-recourse in nature, as the lender will take the bank guarantee / standby letter of credit(SBLC) as collateral. However, these type of bank guarantees are not cheap.
As there is sourcing fee, bank transmission cost and monetization cost as well. A commercial loan for a large project is not for companies operating on a tight budget.
Your company must have accumulated some assets with a proof of fund (POF) to get into the game.
Financing Circular Economy Companies
When financing a major investment or implementing large international projects, it may be necessary to use a tailored structure because a simple loan or other type of conventional financial instrument will not satisfy the needs.
Structured finance is typically employed for companies requiring substantial financing deals that encompass long production and credit extension periods in circular economy companies.
It can benefit them by reducing funding costs and can help to diversify risk by spreading it across different asset classes, geographies, industries, instruments, and credit risks.
The economic model of a circular economy company is based on the principle of extending the life of a good.
A circular economy company business model needs to address two needs :
- A need for increased long-term financing to cover the additional Research & Development costs
- Need for working capital to replace the income gap caused by moving away from the up-front sale of products to a rent model.
Banks in Luxembourg have wide experience in this area, including securitize asset, debt issues or infrastructure funds.
Leverage on Opulent Capital International Group connections
The world of international business funding is changing and evolving, and reliance on big banks is gradually decreasing for smaller, entrepreneurial ventures.
Opulent Capital International Group through our network and collaboration, works with international project funding platforms who have the capability and interest to address the above situations.
We can find investors exclusively in for-profit projects in developing countries, and we charge market rates for our consultancy services.
In summary, we can help companies:
- Attract private investors and partners
- Tailored market insights as well as advice on how to improve companies’ operational performance and sustainability.
- Adopt good practices and standards to increase competitiveness and productivity.