Project Loan
Structured finance for expansion projects and new unit establishment—underwritten on project viability, not just balance sheet.
What is Project Loan?
Project Loan is a long-term structured finance facility designed specifically for capital-intensive business projects. Unlike working capital or term loans, project loans are underwritten based on the project's viability, cash flow projections, and asset creation—rather than just the promoter's existing balance sheet.
It's used for:
- Setting up new manufacturing units or plants
- Expanding existing production capacity
- Establishing new business divisions or product lines
- Infrastructure projects (warehouses, logistics facilities, processing plants)
- Technology implementation requiring significant capital outlay
The key difference: repayment is structured around the project's cash generation timeline, with moratorium periods and step-up EMI structures that match revenue ramp-up.
Who Should Consider Project Loan?
Project loans make sense if you're:
- Establishing a new manufacturing unit or production facility
- Expanding existing operations with significant capex (₹50L+)
- Setting up infrastructure that will generate revenue over 3-5 years
- Planning a project with clear asset creation and revenue projections
- Looking for tenure beyond typical term loans (7-15 years vs 3-5 years)
This is NOT a general business loan. It's for projects with:
- Defined capex requirements
- Identifiable revenue streams
- Asset-backed collateral
- Professional project reports (DPR/CMA)
Common Mistakes Borrowers Make
Most project loan mistakes come from underestimating the structuring complexity:
- Treating it like a business loan – Project loans require detailed project reports, feasibility studies, and technical assessments. A simple balance sheet won't suffice.
- Underestimating working capital needs – Borrowers fund capex through project loans but run out of working capital during operations. We help you structure both together.
- Ignoring moratorium utilization – Project loans offer moratorium periods during construction/setup. Not utilizing this properly can strain cash flow before revenue starts.
- Poor promoter contribution planning – Banks typically require 25-30% promoter contribution. Borrowers often don't plan this upfront, causing delays.
- Weak revenue projections – Overly optimistic projections lead to sanction at higher debt levels than the project can service. We help stress-test assumptions.
We help you structure the project loan correctly from day one—ensuring it's matched to your project timeline, not forcing your project into a loan structure.
How Fineek Partners Structures It Better
Our process starts with understanding:
- The project's nature (greenfield vs brownfield expansion)
- Total project cost and capex breakdown
- Promoter contribution availability
- Expected construction/setup timeline
- Revenue ramp-up projections and break-even point
- Existing business cash flows (if expansion project)
Then we:
- Evaluate whether project loan or term loan structure is more suitable
- Structure optimal debt-equity mix (typically 70:30 or 75:25)
- Design moratorium and step-up repayment aligned with cash generation
- Position the project report (DPR) for lender evaluation
- Coordinate with technical consultants for feasibility reports
- Compare offers across PSU banks, private banks, and specialized NBFCs
- Structure security (primary + collateral) to optimize loan amount
For expansion projects, we also evaluate if combining project loan with existing working capital restructuring makes sense.
Once structured, we manage the entire approval process through disbursement and beyond.
Bank Coordination & Documentation Support
Project loans are documentation-intensive. We manage:
Pre-Sanction: - Detailed Project Report (DPR) preparation/review - Cost-Means-Application (CMA) data formatting - Technical feasibility report coordination - Environmental clearance documentation (if applicable) - Promoter contribution proof and structuring - Security creation and valuation reports
Post-Sanction: - Stage-wise disbursement documentation - Milestone achievement certificates - End-use certificate preparation - Statutory clearances and registrations - Charge creation and perfection - Quarterly monitoring report submissions
Ongoing Support: - Asset creation monitoring - Utilization certificate tracking - Repayment restructuring (if needed) - Additional funding evaluation (if project overruns occur)
Project loans take 60-90 days from application to first disbursement. We ensure it doesn't take longer—and keep you updated at each stage.
Key Benefits
Long tenure (7-15 years) matching project lifecycle
Moratorium period during construction/setup phase
Step-up EMI structure aligned with revenue ramp-up
Project viability-based underwriting
DPR and feasibility report support
Stage-wise disbursement coordination
Combined capex + working capital structuring
Ready to Structure Your Project Loan?
Get expert guidance and find the best Project Loan structure for your needs