Tag Archives: project
Energy Project Financing
Even with the energy sector being the Golden Child of Wall Street, energy project financing has been elusive. There are presently over a trillion dollars in energy project financing requests laying dormant all throughout the United States. Its estimated though, that the number of energy projects needing funding presently in the U.S. alone borders on the quadrillion mark. So why does energy project financing get such little attention? Simply stated, it is because funding each energy project means a lot of risky zeros for the funder.
Think about it. If you funded commercial loans and you had a choice between a $2 million loan on a mall with lots of equity, or a $500 million energy project that has habitually exhausted its equity for years, which loan would you make in a questionable market? Exactly; the energy project financing request will be treated as a redheaded step childunless you deal with financial experts who specialize in the energy project funding arena. The energy sector has long behaved as if it would never run out of credit, funds, or customers. As such, in todays pinch market, energy project financing has taken a back seat to “safe bets.”
The difference between a big banker at “Big Banks Are Us” and an energy project specialist is the specialist isnt concerned about the risk of approving an energy project funding. A knowledgeable project financing specialist mitigates such risks with their expertise. The specialist knows specifically where to look in an energy project for gaffs, gaps, and misappropriation of funding requests. They know in fact, MORE energy projects must progress in order to keep up with the market demands. They know a winning proposal when they see one, and they also know when a project is being underfunded. Even a highly trained bank executive simply cannot be a specialist in all aspects of their funding requests. While the word billion has begun to lose its shock value in the world of energy project financing, its critical to conduct your business with a specialist who hasnt lost their edge in the energy project sector.
Because of expansions of natural gas, nuclear power, shale, solar power, electricity, crude oil, steam-power, and coal, the need for energy project financing has grown into one of the most demanded, yet underfunded industries worldwide. In many parts of the world, medical research receives three times as much funding as energy financing request even though the world of modern medicine is largely at the mercy of energy.
Our modern society consumes massive amounts of fuel and energy. Even third world countries would be debilitated without the sporadic energy resources they access at present. Developed countries around the world have essentially built their infrastructures around the use of energy. And how could they possibly avoid it? Unfortunately, going to traditional sources for energy project funding has proven to be a daunting task. Even though the Obama administration and a Democrat-controlled Congress have passed stimulus bills with massive amounts of funding for new, alternative energy sources, very little of this money is being thrown at the development and continuation of existing energy resources which we are already dependent upon. The answer to this dilemma is alternative energy project financing options which take into consideration future profits of a tangible energy asset which produces income rather than a debt. Sounds enticing, right? A true energy project financing specialist will know exactly how to accomplish this task. So do yourself a favor. Engage an energy project funding specialist for your successful financing.
How to apply for commercial loan funding
Clients seeking commercial finance loans need to remember that first impressions count and their initial standard of presentation and communication will indicate to a potential investor whether they have a serious proposal or are just “tyre kickers”, according to Ms Helen Bassett of commercialfundstogo.com
“Too often clients just visit a website, give it a quick glance over then fire off an email to the investment group asking broad questions, or requesting a loan without providing full details,” Ms Bassett said.
“Quite frankly, this is not good enough, particularly when the client is seeking upwards of $50 million for a commercial property project.
“Clients need to keep in mind that potential private investors are already successful business people they understand the commercial market and they have very sound investment judgment.”
Ms Bassett said clients should initially read the web details carefully, download any lending guidelines and read them carefully, then prepare the required information and forward it as requested.
The first step in making a commercial funding request usually requires the client to complete a project profile online and attach an executive summary. There will then be specific submission instructions, which vary according to the type of loan.
She said the main reason for this structured approach was to minimize the decision making process.
Once the initial information is received, it is assessed and matched with a specific private investor, then discussions are held with the client. The next step is to arrange a face-to-face with the investor so the client can present their proposal.
A decision is often made within a few days after this meeting, thus a client can expect to obtain finance in anything from 20 to 90 days of the initial approach, depending on the type of project and finance.
By having the requested information readily available, the client is not only helping to speed up the application process, but is demonstrating to the investor they are serious professionals who are truly committed to their project.
The real benefit of private commercial programs is that they are more flexible than conventional banks and personal or business credit are not primary factors.
It means deals which make sense get done without red tape, last minute hold outs and lender hoops to jump through. Typically, there are no property restrictions and conforming transactions are also highly competitive as investors are eager to fund solid deals.