A Comprehensive Overview of Project Finance and Corporate Finance
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, Cor...