Posts

Showing posts from April, 2022

A Comprehensive Overview of Project Finance and Corporate Finance

Image
  Project Finance   and   Corporate Finance   (also referred to as Balance Sheet Financing) are two financing models to fulfill the basic objective of meeting the requirement of fund of a business entity, where both rely on debt and equity as a source of funds. The thin line that separates them, are (i) the purpose behind availing these types of finances and (ii) the security offered. Overall financials of a company are managed through   corporate finance , which begins with financial modeling, raising capital, and optimizing fund usage. On the contrary,   project finance   comes into the picture when a specific project needs funding and the project’s assets and the project cashflows are offered as primary security apart from some additional collaterals. Despite the differences,   corporate finance   has often crept into the territory of   Project Finance   and has proven itself useful to finance certain projects. Theoretically, Corporate finance and Project Finance have very different

Funding & Financing A Sustainable Energy Projects

Image
  Funding & Financing A Sustainable Energy Projects Financing a Sustainable Energy project remains a core/is a key ingredient in the energy transition — but there is a large gap between what is available and what is required. The market cannot close this gap on its own; policy-makers will also need to play a large role. Sustainable energy finance plays an essential enabling role in the energy transition and innovation. Meeting a future global increase in energy demand in a sustainable way while reducing emissions from existing infrastructure will require trillion dollars of investment. However, there is currently a gap of many hundreds of billions of dollars between existing investments and what is required. With the COVID-19 crisis also rippling through the energy sector, a new lens through which to view the energy transition has emerged. Renewable energy sources have strengthened their position in the global electricity mix as a result of changed energy production and consumption

Debt Financing and Equity Financing; A comprehensive Overview.

Image
 Debt Financing and Equity Financing; A comprehensive Overview. Considering the two main types of financing available for companies:  debt financing  and  equity financing . Debt financing is a loan that must be paid back often with interest, but it is typically cheaper than raising capital because of tax deduction considerations. Equity Financing does not need to be paid back, but it relinquishes ownership stakes to the shareholder. Both debt and equity have their advantages and disadvantages. Most companies use a combination of both to finance operations. Types of Financing Equity Financing “Equity ” is another word for ownership in a company. For example, the owner of a grocery store chain needs to grow operations. Instead of debt, the owner would like to sell a 10% stake in the company for $100,000, valuing the firm at $1 million. Companies like to sell equity because the investor bears all the risk; if the business fails, the investor gets nothing. At the same time, giving up equi

Unsecured vs. Secured Business Loans; Understanding their Differences and Application Methods

Image
  Unsecured vs. Secured Business Loans; Understanding their Differences and Application Methods At the point where what runs through your mind is starting up a business, one of the first decisions you’ll need to make is if you should get an unsecured or a secured loan. Typically, secured loans are preferable for business financing because they have lower interest rates, but lenders can foreclose on your assets if you default. Although unsecured loans don’t require collateral, they’re harder to get and far more costly than secured loans. Here’s what you need to know about these types of loans to determine the best option for your business. Difference between Unsecured and Secured loans? Unsecured loans are provided based purely on a borrower’s ability to repay. So,  if the borrower defaults , the lender can sue; however, they won’t have liens against any of the borrower’s property, so they can’t foreclose on and seize any property to get their money back. While Secured loans require you