Plate/GCGC - Weekly Newsletter - 11/1/22 - Funding Explained & what and how we fund at Plate/GCGC.
Siva Pillarisetty
Marketing Manager in the USA at Golden Crown USA, Inc. - International Project Funding
According to WIKI: Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of money, it can also take the form of effort or time from an organization or company. Generally, this word is used when a firm uses its internal reserves to satisfy its necessity for cash, while the term financing is used when the firm acquires capital from external sources. Sources of funding include credit, venture capital, donations, grants, savings, subsidies, and taxes. Funding's such as donations, subsidies, and grants that have no direct requirement for return of investment are described as "soft funding" or "crowdfunding". Funding that facilitates the exchange of equity ownership in a company for capital investment via an online funding portal per the Jumpstart Our Business Startups Act (alternately, the "JOBS Act of 2012") (U.S.) is known as equity crowdfunding.
Funds can be allocated for either short-term or long-term purposes.
The flow of funds from lender to borrower.
Types of financing/funding: In economics funds are injected into the market as capital by lenders and taken as loans by borrowers. There are two ways in which the capital can end up at the borrower. The lender can lend the capital to a financial intermediary against interest. These financial intermediaries then reinvest the money against a higher rate. The use of financial intermediaries to finance operations is called indirect finance. A lender can also go to the financial markets to directly lend to a borrower. This method is called direct finance.
Research funding: Research funding is funding used for research-related purposes. It is most often used to describe funding in the fields of technology or social science. The allocation of funds are usually granted based on a per project, department, or institute basis stemming from scope of the research or project. Research funding can be split into commercial and non-commercial allocations. Research and development departments of a corporation normally provide commercial research funding. Whereas, non-commercial research funding is obtained from charities, research councils, or government agencies.[3] Organizations that require such funding normally have to go through competitive selections. Only those that have the most potential would be chosen. Funding is vital in ensuring the sustainability of certain projects.
Launch a business: Entrepreneurs with a business concept would want to accumulate all the necessary resources including capital to venture into a market. Funding is part of the process, as some businesses would require large start-up sums that individuals would not have.[4] These start-up funds are essential to kick-start a business idea, without it, entrepreneurs would not have the ability to carry out their concepts in the business world.
Uses on investment: Fund management companies gather pools of money from many investors and use them to purchase securities. These funds are managed by professional investment managers, which may generate higher returns with reduced risks by asset diversification. The size of these funds could be as little as a few millions or as much as multi billions. The purpose of these funding activities is mainly aiming to pursue individual or organization profits.
Methods of Funding
Government Grants: Government could allocate funds itself or through government agencies to projects that benefit the public through a selection process to students or researchers and even organizations. At least two external peer-reviewers and an internal research award committee review each application. The research awards committee would meet some time to discuss shortlisted applications. A further shortlist and ranking is made. Projects are funded and applicants are informed. Econometric evidence shows public grants for firms can create additionality in jobs, sales, value added, innovation and capital. For example, this was shown to be the case for large R&D grants, as well as smaller public grants for the tourism firms or small and medium sized firms in general.
Crowdfunding: Crowdfunding exists in mainly two types, reward-based crowdfunding and equity-based crowdfunding. In the former, small firms could pre-sell a product or service to start a business whereas in the latter, backers buy a certain amount of shares of a firm in exchange of money. As for reward-based crowdfunding, project creators would set a funding target and deadline. Anyone who is interested can pledge on the projects. Projects must reach its targeted amount in order for it to be carried out. Once the projects ended with enough funds, projects creators would have to make sure that they fulfill their promises by the intended timeline and delivery their products or services.
Raise from investors: To raise capital, you require funds from investors who are interested in the investments. You have to present those investors with high-return projects. By displaying high-level potentials of the projects, investors would be more attracted to put their money into those projects. After a certain amount of time, usually in a year’s time, rewards of the investment will be shared with investors. This makes investors happy and they may continue to invest further. If returns do not meet the intended level, this could reduce the willingness of investors to invest their money into the funds. Hence, the amounts of financial incentives are highly weighted determinants to ensure the funding remains at a desirable level.
Self-Organized Funding Allocation: Self-organized funding allocation (SOFA) is a method of distributing funding for scientific research. In this system, each researcher is allocated an equal amount of funding, and is required to anonymously allocate a fraction of their funds to the research of others. Proponents of SOFA argue that it would result in similar distribution of funding as the present grant system, but with less overhead.[13] In 2016, a test pilot of SOFA began in the Netherlands.
Securing loans: A company or an individual may secure a loan to get access to capital. Often borrowers must use a secured loan where assets are pledged as collateral. If the borrower defaults, ownership of the collateral reverts to the lender. Both tangible and intangible assets can be used to secure loans. The use of IP as collateral in IP-backed finance transactions is the subject of a report series at the World Intellectual Property Organization.
Withdrawal of funding, or defunding, occurs when funding previously given to an organization ceases, especially in relation to Governmental funding. Defunding could be as a result of a disagreement or failure to meet set objectives. An example that explains the withdrawal of funding in this case is that of President Trump's decision to stop funding the World Health Organization (WHO) over alleged Coronavirus mismanagement.
Currently I am looking to intake these types of projects listed below to fund from 10M USD to 100B USD
Crude Oil Refinery Projects () Oil & Gas Wells Projects () Offshore Oil Rigs () Pipeline Projects () Oil Storage Tanks Projects () Oil & Gas Terminal Projects () Gas Station & Petroleum Stations Projects () Renewable Energy Projects () Solar Power Plant Projects () Wind Power Plant Projects () Hydro Electric Power Projects () Nuclear Power Plant Projects () Mining Projects () Buying Aircraft's () Aviation Industry Projects () Aerospace Industry Projects () Airport Projects () Railway Transportation Projects () Road Projects () Commercial Building Projects () Housing Development Projects () Smart City Projects () Hotel Projects () Resorts Projects () Man-Made Islands () Healthcare Projects () Industrial Factories Projects () Water Park Projects () Sports Center Projects () Some acquisitions, refi - recap deals that are very strong and make sense
Rates: 2-4.5%
Tenure: 1-20 Years.
Grace Period: Up to 60 months
Amounts: 20M - 100B USD (10M USD min on a case-to-case basis)
Type: Simple interest loan, debt finance, equity finance, line of credit, etc.
Area: Worldwide
Success Fee: 1-5.5% (loan amount can be increased to cover this cost)
Costs: Loans are for 100% of the development/transactions, but will not cover predevelopment/transactions costs to get project ready with a highly detailed set of documents, collateral or financial insurance (we can facilitate insurance to cover collateral gap see page 11 of co. profile), our retainers, cost of response preparation, etc. You can see by this, far less is required by the borrower, than other types of loans or financing where you may have to put up 5-35%
About Us:
- We have a parent company, and over 40 subsidiary companies.
- Our financial partner is an institution that owns 30 banks that mandated us as their official representative (Underwriter). We handle everything from start to finish for them such as intake, pre underwriting, onsite visit & due diligence, underwriting, closing, funding, loan monitoring, auditing, servicing, etc. The mandate is a contract/license they issued us to do this work for them.
- We are not a broker and are the funding. Capital is in place.
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Keys to getting your project funded
1) You have to be fully ready with a highly detailed set of documents. Meaning of fully ready:
- Done with concept, feasibility, design, constructor in place, all construction/project plans, insurance, entitlements, off take agreements, collateral, etc.
2) Types of collateral needed.
- Property, Risk Insurance, Sovereign Guarantees, Bank Guarantees, SBLC, cash or savings accounts, paper investments, natural reserves, blanket liens, PPA's etc. (This matter is fully negotiable)
3) A complete and highly detailed set of documents on the deal that are current. (Prepared by a qualified 3rd party)
On M&A, Refinance & Recapitalization Deals
1) Strong buyers and sellers last 3 yrs. audited financials, YTD P & L
2) Any DD packages on the buy or sell side.
3) Need to know who is selling the business, i.e., Investment banker, FSBO, commercial realtor, business broker, etc.
4) We have to see a strong take over plan. strong forecast, and strong operations plan.
5) They should be doing a 100% takeover
6) You can bundle acquisitions, get working capital, pay off liens, etc.
7) You have to be shovel ready on any renovations or new construction with a highly detailed set of documents. (See above)
8) Retainers and fees still apply as described in project funding guidelines.
9) Contract should be in place to acquire, merge, buyout in full of seller/target company merging into.
10) Company refinance & recapitalization many of the above apply.
Govt projects:
- We don't sponsor PPPs; however, we can fund once the project is fully ready with set of highly detailed documents.
- We are the mandated official representative of an institution that owns 30 banks. Our function is underwriter/originator, and we do 99% of the work for them. We are not a broker, and capital is in place.
- In a PPP we start talking to the sponsor to make sure they have put the equity(cash) in the project company so they can get the deal fully ready, cover costs of financing, and anything else the comes up.
- The sponsor would introduce the government and the project company principal in the PPP. We don't work in a bid process; they would have to have the PPP contract in place.
- Sponsor would set the itinerary for the meetings with the government and let us have a formal exchange of documents with the project company principal so we can issue an agreement to start the process.
- If the government owns 100% of the project company, we can engage with them directly, so they can borrow directly, complete project in house, etc.
If you are look for the type of end loans described above( 100% funding on the deal it self, but not the things to get the deal fully ready with bankable feasibility study, etc. Please get in touch:
US Cell Whats App: 1.224.216.0334