TERM LOAN PROVIDERS
ARK ADVISORS, as a Syndication team plays a crucial role in approaching Term Loan Providers on behalf of Corporates as well as SME units. Whenever a business is to be established or an existing business needs expansion/modernization it needs long term funds. After Equity the next most prevalent form of fund for this purpose is Term Loan. Apart from Banks there are other Term Loan Providers like NBFC's/Corporates/FI's/LIC etc.
Whenever there is need for acquiring Long Term Assets then for the purpose of maintaining financial discipline and smooth running of business, the said Assets need to be funded by long term sources like Capital and/or Term Loans. Short term funds like working capital limits, dues towards creditors should not be used for acquiring Long Term Assets.
The Term Loan Providers need to assess the amount of Term Loan for which the Company is eligible. The Appraisal exercise includes Techno-Economic Viability Study to be undertaken by nominated agencies or in-house team of the Lending Institution.
As the name suggests Term Loan is granted for a fixed and pre-decided period. The repayment has to be made within that fixed period. While making a proposal for Term Loan one has to structure it properly after forecasting the repayment timing and capacity.
It is seen that most of the green-field projects turn into technical NPA's because the moratorium period is not properly forecasted or repayment timing is projected wrongly. In the enthusiasm of setting-up new unit or in presenting rosy picture to the lending institutions many a times the Promoters/CFO's make faulty timelines in respect of repayment schedule. The project's ability/strength of earnings is forecasted without taking into account unforeseen contingencies. With these projected figures, the appraisal team generally provides for shorter repayment period and in case these timelines are missed, the account becomes NPA.
The Term Loan Provider is to be approached with a sense of conservatism and realism. Whenever Term Loan as a tool of fund raising is used then the Company must seek professional advice for structuring of the same so as to get the most viable repayment terms apart from cost of funds which should always be kept in mind. At the time of appraisal if the repayment capacity of the prospective unit/organization is forecasted with specific statistical tools then chances of error are minimized.
We are a leading Term Loan Provider in Delhi, work towards structuring the Debt deals in a manner so that short term assets are financed by short term funds and for long term assets, Term Loans are raised. While formulating the blue print for Debt-financing, the Cost of Funds is always on top of the agenda but with that other aspects of the deal are also given due consideration. The complete structure of Debt Deal must sync with the progress of the project.
The Term Loan Providers can be approached for the purpose of ;-
A. Building Construction.
B. Equipments Purchase.
C. Plant and Machinery purchase.
D. Commercial Vehicle purchase.
E. Green field project (Manufacturing units).
F. Lease rental discounting (LRD).
G. Other Structured Deals like Working Capital Term Loan, Corporate Loans etc.
While arranging the term loans from Banks/FI's/NBFC for the above mentioned reasons we always ensure as under
A. Best negotiated ROI, Proc. Fee etc.
B. Properly Structured Tenure with suitable moratorium period
C. Friendly Repayment Terms (monthly, quarterly and half yearly) or EMI based.