Many clients and project / company owners wonder why their 3 page business plan and restaurant napkin financial model that describes the next best and “must be kept secret at all costs” project or business never secures the wonderful USD $ 100 million capital they so desperately seek.
Sadly, not many projects that come across our desks on a daily basis meet bankable and professional benchmark standards and requirements, and to advise clients and entrepreneurs that professional advice and input is required to help them achieve a bankable status of their projects, is sometimes a bridge too far. Many project promoters, sponsors, developers, etc. believe they can do it all, believe they don’t have to pay professionals to help them develop their projects, and yet believe that circulating their projects across continents and across time zones and appointing a multitude of broker groups will be the key that unlocks the vault of wealth. This, regrettably never happens, and unless hard work, professional input and a strategic development process is invoked in presenting the project in the best way possible, the magical millions will remain forever elusive.
To address this problem, or as we see it, opportunity, project financiers seek to cover all the bankable items a project has to address, which may inter alia include the following sample bankability checklist (and which is not an exhaustive list) to ensure that the capital raising process is easier:
- Detailed Business Plan or Project Information Memorandum (Prospectus)
- Detailed and extensive financial model
- Construction and completion risk
- Operating risks
- Demand risk
- Force majeure and change in law
- Political and regulatory risk and expropriation and nationalization risk
- Environmental risk
- Social risk
- Tenor and Refinancing Risk
- Currency exchange risk
- Interest rate risk
- All legal agreements reviewed for viability under the project structure, etc.
A multi-million USD project is never funded on a whim and a prayer only… it is funded by hard work, preparation, preparation and preparation, and usually in collaboration with a professional team that stands by, guides, advises and co-develops the project alongside a knowledgeable client that knows that some skin in the game is a substantial pre-requisite to any successful funding achievement.
I wish you all success…. but if you need some help, drop us a line and lets have a chat…
Kurt van Duyn