News Americas, NEW YORK, NY, Fri. July 12, 2019: In today’s project funding market, many project developers seeking to raise millions for Caribbean projects seem to be running around on the misconception that they can do so without a penny of their own money.
Some even assume they can raise the money without any collateral whatsoever, in addition to having no cash. Not even 2.5 percent of what they want to raise overall.
The reality in today’s commercial lending world is that fancy business plans and great project concepts and ideas matter little if you have no “skin” in your own game. And this applies even to equity financing, not just debt, alternative or joint venture funding.
Think of it like buying a house – you can’t buy a home without any cash in hand, right? You at least must have some money to bring to the table for closing costs, legal fees etc.
So why would you believe that a funder will put millions of their own money into your project without you having not a single fraction of your own money to add or any collateral to bring to the deal?
We at Invest Caribbean, the global private sector investment agency of the Caribbean, are here to help project developers globally find the best, least complicated options to raise debt or joint venture funding to make their projects a reality. But we cannot do that with clients who have nothing to bring to the deal.
There is not a lender in the world who would be so generous. At least none we know.
Our debt funding partners are ready to fund project from US $3 million up to USD 50 million but clients must own or be buying commercial assets or land that is worth two times the amount that you are trying to raise. And additionally, bring at least 2.5 percent of that amount to the table.
This can get you to closing in 6-8 weeks and the money in your account to get started. This applies to all commercial real estate deals such as hotels and includes medical marijuana land or dispensary transactions.
Our joint venture partners look for projects from US $5 million and up and don’t require the hard asset but a strong business plan and financial projections as well as 5-7 percent of the amount you are seeking to raise in hand. This is to ensure you have the money to cover closing costs and legal and due diligence fees as no lender is going to cover that for you.
For bigger infrastructure, mining and other major deals worth US 500 million plus, we also have alternative funding options, but again you must have some money in hand along with financial earnings or projections.
At the end of the day, the term to remember in pursuing project funding is “skin in the game,” because that represents the difference between a funded project and one that is not.
EDITOR’S NOTE: The writer is the founder of Invest Caribbean, the global private sector investment agency of the Caribbean. For more log on to InvestCaribbeanNow.com
