A Building Loan Agreement is a contract where the lender advances funds to the property owner at specific construction milestones, ensuring continuous cash flow during various construction stages such as foundation completion and framing.
Completion risk refers to the inherent risk within project financing schemes that the project might not be completed on time, within budget, or to the required specifications. This type of risk is a critical concern for investors and stakeholders in large-scale projects.
Cash necessary to start a project. Front money is generally required for purchasing a site, preparing plans and studies, obtaining permits, and securing loan commitments.
Funding is the act or process of providing financial resources, typically in the form of money, to finance a program, project, or organization. Funding is critical across various sectors for initiating and sustaining operations and achieving objectives.
Limited recourse financing, also known as project financing, involves securing loans or investments based on the projected earnings and assets of the specific project rather than the borrower's overall assets.
Non-recourse finance is a type of bank loan where the lender can only claim repayments from the project's profits, not from other borrower assets.
Revenue bonds are municipal bonds where the repayment of the principal and interest is secured by the revenue generated from the specific project they finance, such as toll bridges or utilities.
Supply risk refers to the inherent risks associated with the unavailability or disruption of raw materials necessary for the operation of a business or project.
Technological risk is the inherent risk in project financing schemes that the newly designed plant or equipment will not operate to spec, and the broader risk to a business from changing technology.
