Private Equity Group Looking For Companies To Finance And Purchase Project Funding Fees and Costs

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Project Funding Fees and Costs

Project Fund Payment.

Many entrepreneurs in the project funding world refuse to pay an “upfront fee” for their project. When you apply for loan funding, the funder may need to implement a financial structure to enable you to kick-start the project as well as determine your ability to repay the loan. While it’s true that you don’t have to pay an upfront fee, there are often associated costs involved.

Cost of Fee V:

A fee is when you are asked to pay for a provider’s services, whether it is for arranging a funding package through an intermediary or a fee imposed by the funder themselves. This fee is usually charged at the end of the funding process.

Cost is one thing that cannot be ignored. Money goes to real events like buying bank instruments on your behalf, blocking funds within a hedge fund, securing private equity money. All these costs.

What is included in the cost?

Costs can include an array of things such as securing collateral. Let’s say you have no collateral project and are not generating any revenue yet. Generally funders/lenders secure the borrowed money by securing it against some form of collateral. As a project in the early stages, they will have no collateral. It is very common for funders to obtain external collateral by purchasing instruments to secure against the project.

Usually it involves another corporate entity pledging its assets against the instrument for 1 year and 1 day. You now have two parties at risk, the corporation pledging its assets against the instrument and the financier buying the instrument to lend against it – this incurs a cost. Other costs may include 1) due diligence 2) paying for flights to face-to-face meetings, 3) blocking money within a hedge fund, 4) securing funding from private equity investors, all of which incur very real costs. Not all companies have these costs.

Payments and Commissions

Getting project funding can be quite brutal. Please read their contracts and terms carefully when applying with brokers or lenders as some companies are known to charge ridiculous sign up fees, retainers, skype call fees and exit fees. All this may be legitimate but there are those fundraisers who are out to collect on fees and very rarely bring any funding results. I heard some companies are charging 20K just for sign up fee and exit fees can be expensive if companies don’t get funding within 12 months making it hard to go elsewhere.

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