A project can be commercially sound and still fail at the bank. Above roughly €30 million, traditional lenders want years of operating history, hard security over the project itself and covenants that reach deep into how the venture is run. Development-stage projects, however strong their fundamentals, often cannot meet that checklist at the moment they need capital most.
Why banks decline large projects
Bank credit is built around one question: can the borrower service debt from existing cash flow? A greenfield refinery, a resort under construction or a mining concession moving from pilot to production has no such cash flow yet. The bank's answer is a mortgage on the project, personal or corporate guarantees, and pricing that reflects the perceived risk. Many project owners decline those terms, and many banks decline the project anyway.
The usual alternatives, and their price
Three routes dominate once bank credit is off the table:
- Equity investors provide capital in exchange for ownership. The project gets funded, and the founder team permanently gives up a share of everything the project will ever earn.
- Mezzanine and private debt close the gap with subordinated loans. Interest rates are materially higher than bank debt, and the obligations still sit on the project's balance sheet.
- Structured finance backed by underlying assets takes a different path: instead of borrowing against the project, the funding is triggered by existing assets, held securely by their owner.
How asset-backed structured finance works
In the structure we facilitate, the project owner, or a cooperation partner acting as sponsor, provides an underlying asset for an agreed period. Cash assets remain in the owner's custodial account at their own bank, confirmed by a bank letter or SWIFT confirmation. Hard assets such as gold bullion are stored insured, in a bank vault or qualified security house. The asset is never pledged to the project and no bank guarantee is required.
On this basis, structured funding is arranged with licensed entities and international prime banks, supervised by an international law firm. First proceeds arrive within 40 banking days after compliance is completed, and unless otherwise agreed, the structured finance proceeds are not repaid: the model is non-recourse, and no project assets are hypothecated.
What this means in practice
The practical differences to a loan are substantial. The project carries no new debt service, the balance sheet stays unencumbered for later refinancing, and the asset owner keeps full control of their capital throughout the term. For the sponsor, participation carries defined benefits without their assets being tied to project risk.
What to prepare
The entry point is a project teaser: what is being built, the required cash flow over time, and the assets available to back the financing, whether the project owner's own or a sponsor's. On that basis, a substantiated assessment of feasibility is possible within days, before any compliance process begins. Advisory, compliance and structuring carry no advance fees; compensation is settled from project funds once financing is in place.
The funding criteria summarize the parameters: projects from 30 million EUR/USD, facilities up to 5 billion, worldwide except restricted jurisdictions.