to noninvestment grade status, the haircut unwinding of exposed collateralised debt obligations reverberated in mounting regulatory unease about current risk measurement standards of derivatives and their impact on financial stability. Don't put a halt to your business dreams.ĭon't let your dreams be just dreams, turn them into a reality by real estate structured finance from Resurgent India.On the heels of last year's downgrades of General Motors Corp. It's time to consider alternate finance options to ensure the smooth running of your real estate business. If you are facing hassles while obtaining finances for your large business, then end your search and choose Resurgent India ( A Leading investment bank ). There are a plethora of ways to fulfil the financing needs of large corporations. Similarly, in the case of housing projects which are in the development stage, the funding provided can be subject to terms and conditions based on the number of houses sold, etc.Īdditionally, attention must be paid while signing the clauses in the rent agreement for the acquisition price.Įxamples of real estate structured finance An approximate idea of the project costs and potential cash flows needs to be provided to obtain financing for the purpose of construction. The loan can be obtained for construction expenses or to purchase the property. The properties given below are eligible for financing: They can generate cash flows both for projects in the development phase or already prevalent properties producing income. The contractual guarantees are given more preference while obtaining loans from the bank to assure that the project would generate cash flows.Īll kinds of real estate can avail debt financing. tangible security such as a debt against a property, such as guarantees and contractual covenants. The forms of collaterals offered while availing of structured financing can be of two types, i.e. The purpose of SPV is to differentiate an investment both legally and financially from its promoters/sponsors.Įven the project's cash flows can be utilized to pay back the debtor or to return the sponsors' equity capital share after the loans are repaid as per the covenants of the term sheet. The financing for the real estate project would be carried out by creating a special purpose vehicle ( SPV ). It is done by assessing its assets' ability to generate revenue by putting it up for rent or sale. Additionally, this assessment will be separate from sponsors' other initiatives and track record would be a deciding factor for the transaction to take place.īefore providing real estate project finance, banks like that the risks involved are duly mitigated. Process of availing real estate structured financingīefore deciding whether to grant loans for real estate projects, the banks like to evaluate the specific project with regard to the capital available and debt required. Thirdly, structured financing offers innumerable benefits for corporations and businesses, such as increasing business reach, handling risks, and devising new financial instruments to meet the upcoming obstacles. Secondly, a traditional loan is transferable, which means it is possible to shift it between different debt forms while it is not so with a real estate structured loan, which is provided generally on a project to project basis according to the specific requirements and specific structure of each project. You can only obtain such funding with the help of an investment bank. Nowadays, many corporations have started using real estate structured financing to meet their current and future business goals.Īdvantages of structured financing for your businessįunding a large business requires a significant capital injection, which cannot be fulfilled by small lenders. The profits or cash flows are utilized for returning the loan. Additionally, during a real estate structure finance, the bank obtains as security a charge on the cash flows generated or potential cash flows in exchange for funding the transaction. Thus we can say that it is similar to the procedure for project finance. Structured financing involves various financial instruments in accordance with the nature of the transaction. You can choose structured financing as a perfect alternative to meet the financial requirements of the business. Structured finance offers complete funding solutions for large enterprises that are not content with conventional financing methods. Are you looking for alternative funding options for your business? Then look no further than opting for real estate structured finance to fulfil your financing needs.
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