Infrastructure building is no mean feat. The entire cost of land, materials, and labor would be enormous, not to mention the inevitable water and electricity costs from tenants or workers. It might be too heavy of a cost for one person, but there are project finance companies in India willing to lend a hand to people who want to set up a hotel or apartment.
Of course, there are pros and cons to working with an infrastructure finance group, as well as things you need to look out for. This article will outline some of these pros and cons, and lave it to you whether or not you end up working with a finance company.
Positive points
Finance companies are a great way to kickstart a project without having to continuously raise funds over a period of time. It limits financial risks to what you can handle, and doesn’t require you to take drastic measures in funding. Therefore, you will be able to freely amass funds after the project has been completed.
You also have an entire host of choices you can make in funding. You can either take out a loan, or allow shareholders to fund your project. You can tweak the circumstances to fit your situation. Some financing firms also give you certain boosts and incentives, such as a 15% advance.
Negative Nays
If you’re not one to take too many risks or give out too much credit information, you might not be having a great time when financing your project. The financing company will have to scrutinize your credit details and more, to ensure that you will be able to pay off the project yourself. That’s right; you still will have to pay the company.
Depending on the contract you sign with the financing company, you will also lose a bit of your decision-making power. Your financing company will also hold a bit of the finances, so if you’re aiming to own the building, you will have to wait for a while. If things go sour, you may also get in trouble with the banks, getting you into a lot of hot water.
Information scams
Lastly, you have to make sure you trust your financing company. There are lots of scams out there, but they are more or less simple to weed out. Scam companies usually don’t have any reliable history with clients, haven’t been around for more than a year, and give out outrageously impossible claims.
Before contacting a financing company, look into its history and any prior clients. It’s also a good idea to look into the credentials of the CEOs and other important people in the company, to determine that they are who they say they are. Don’t give out any sensitive credit information unless absolutely needed. Give them a call just to make sure that they haven’t made off with your credit information after you’ve sent in a form. Once they’ve approved of financing your building, good luck with your newest infrastructure project.
