Guide

Project Finance

Question and Answer Guide

Please read all the information given here carefully as it should answer any questions you may have about our project finance service including questions concerning project eligibility and application procedures.

Please click on the link below to take you directly to the appropriate section or scroll down to read the entire page.

NOTICES

Do you act as legal, tax or other professional advisors, or give legal, tax or other professional advice?

No, we do not act as legal, tax or other professional advisors. We strongly recommend that you obtain appropriate independent tax and legal advice.

Is your website copyright?

Yes. Our website is strictly copyright and neither it nor any part of it may be copied or reproduced in any form without our prior written consent.

LANGUAGE

What is your language of communication?

All our communications are in English.

My preferred language is not English and I want to receive a copy of the project finance application form in my preferred language and complete it in my preferred language. Is this possible?

No. Our project analysts only speak English, consequently our project finance application forms are only available in English and must be completed in English.

Do you offer a translation service for my preferred language?

No. It is your responsibility to arrange for translation between our English communications and your preferred language.

What is the official language of your website?

English is the official language of this website. The English version is authoritative over all versions of this website in other languages.

EMAIL COMMUNICATIONS

Would you like to be on our email list?

No. All unrequested emails distributed via a list are automatically deleted from our system without being read. All emails sent to us but not addressed to us in the email ‘To:’ or ‘Cc:’ fields are automatically deleted without being read.

I have completed your online project finance enquiry form with a project which meets your criteria and I have emailed you several times but I have not received a reply, why is this?

Please ensure that your email system will accept replies from us and that your email system is not rejecting our emails.

We do not appear to be receiving emails from you, what should we do?

Please ensure that your email system will accept emails from us and is not blocking our emails.

I would like to email you some zip files or compressed files – where should I send them to?

We do not accept unrequested zip or compressed files. All unrequested zip or compressed files are automatically deleted from our system and are never unzipped or decompressed.

Would you like to join me on Skype, Facebook, Linked In, Twitter, Skoost, Netlog, Badoo, ICQ etc..?

No. Please do not send us invitations for these or any similar services. We are a professional organization and we do not communicate via these channels.

I use Boxbe or a similar email spam prevention service, will you please verify your emails to me?

No. This adds to our administrative burden so we do not verify emails for services like Boxbe. If you use Boxbe or a similar service you must look in your waitlist for emails from us.


 

TELEPHONE COMMUNICATIONS

Do your executives accept or return calls from unknown callers?

No. Previously we were telephoned by applicants wanting to tell us about their projects many of which were clearly non-financeable or by callers trying to sell us office supplies or office cleaning, security, chauffeur, taxi, courier or other services. We therefore no longer accept or return calls unless it concerns a project which we have already evaluated and approved.

Why is your telephone number no longer on your website?

We were receiving a large and increasing number of telephone calls asking for information which is clearly stated on our website, this resulted in us wasting a very considerable amount of time. To avoid this waste of time we now require all new applicants to complete our online project finance enquiry form.

I would like to telephone you how can I do this?

Please complete our online project finance enquiry form we will email our response to you, typically in one or two working days and we will include our telephone number in our reply. Generally, however, we prefer to communicate in writing via email as this greatly reduces the possibility of misunderstanding and provides a permanent record of what has been said.


 

UNREQUESTED COMMUNICATIONS

I have not submitted an online project finance enquiry form, however I have emailed you but you have not responded to my email. Why is this?

We do not respond to emails or hold discussions in any form until we have a clear understanding of your project expressed in writing by fully completing our finance application form. You must first complete the online project finance enquiry form if you have a project for which you are seeking finance.

I have not submitted an online project finance enquiry form, however I have telephoned you but you have not returned my call. Why is this?

We do not return calls or hold discussions in any form until we have a clear understanding of your project expressed in writing by fully completing our finance application form. You must first complete the online project finance enquiry form if you have a project for which you are seeking finance.

I’ve got a great idea for a project for which I need finance, can I phone you or meet you to tell you all about it?

No. First, please complete our online project finance enquiry form. We do not delegate executive time to phone calls or meetings, nor do we read business plans or other documentation during the early stages of an application.

Instead of completing your forms I want to send you my business plan or other documentation. Is this acceptable to you?

No. Our analysts do not have time to extract information from unrequested documentation. We therefore have the strict policy that we only evaluate documentation that we have specifically requested, so please do not send us documentation until we specifically request it. You must first complete our online project finance enquiry form.

Instead of completing and returning your project finance application form I sent you my feasibility studies, business plan or other documentation but I have not heard from you. Why is this?

Every day well-meaning applicants, who clearly have no understanding of the volume of applications we receive, send us a vast amount of documentation, unaware that we do not possibly have time to evaluate unrequested documents. We do not read or review documentation unless we request it and we do not reply to enquiries which do not fully conform to our application procedures. If you elect not to return our forms we will be unable to process your application.

You have rejected my application but I would like to try to change your mind. Will you agree to discuss this with me?

No. When we reject an application our decision is final. If we reject your project, it does not mean that your project is not viable or financeable, it only means that we do not wish to pursue it.

I fully completed and returned the project finance application form some time ago but I have not heard from you. Should I email you or call you to check that you have received my form?

No. When we receive your project finance application form we send you confirmation by email that we have received your application form and passed it to our analysts. We usually send this confirmation email to you within seven days. If you do not receive our confirmation email within ten days you should email us to ensure that we have received your completed project finance application form. If you have not heard from us after our confirmation email we have not yet decided whether we wish to proceed with your project or not. We automatically contact all applicants as soon as we have reached a decision. Please note that this can take several weeks depending on how busy our analysts are. Please do not contact us during this period, rest assured that you will receive our decision as soon as we have made it.

I want to apply for project finance through you but I want to do it my way and I do not wish to follow your procedures. Are you interested in this?

No. Please note that we automatically reject all applications that do not fully conform to our project finance application procedures.

REPRESENTATIVES

Are you looking for representatives in particular territories?

Yes. We are interested in discussing representation in various territories. However, as our good name is involved, we are highly selective in who we appoint as our representatives.

In which countries do you have permanent representation?

We have permanent representation in a number of countries including China, Germany, Hungary, Hong Kong, India, South Korea, the Philippines, Russia and the USA.

How long is the application process to become a representative?

It typically takes many months to become our representative. We do not appoint representatives lightly. You must act as a broker first before becoming a representative.

I would like to be considered as a representative, how do I proceed?

Please follow the standard application procedure by completing the online project finance enquiry form, for your project which you think will most interest us, indicating that you wish to be a representative. Also, please email a copy of your resume to enquiry@firstequityfinance.com.hk.

I would like to meet you to discuss the possibility of becoming your representative, where can we meet?

We will be happy to meet you at a site visit. In the past we have held sometimes very lengthy communications with candidate representatives only to eventually establish that the candidate lacks the necessary experience of international project finance to represent us. This has resulted in a great deal of time being wasted. Consequently we now require all candidate representatives to demonstrate that they have at least one viable project before we enter any form of discussion. To do this please follow the standard application procedure by completing the online project finance enquiry form. Please note that separate projects must be on separate forms. There is no need to divulge your client’s identity at this early stage, simply give your name (state that you wish to be our representative) and contact details in lieu of your client’s name and contact details.

Do you have a work placement scheme?

No. Our work requires experienced staff which we recruit internally.

BROKERS

What is the difference between a broker and a representative?

A broker introduces project finance applicants to us but does not represent us. A representative introduces project finance applicants to us and also represents us.

I am a broker, do you pay commission to brokers for introducing projects to you?

Yes. We pay commission to brokers for introducing projects to us.

How much commission do you pay to brokers for introducing projects to you?

The amount of commission we pay to brokers is determined on a project-by-project basis and is subject to written agreement.

When do you pay commission to brokers for introducing projects to you?

The commission we pay to brokers is paid when we receive our success fee.

I am a broker and I would like to introduce you to some project finance applicants, how do I proceed?

Each day we receive many applications from brokers. In the past we have held sometimes very lengthy discussions with a broker only for the broker to eventually present us with a number of unrealistic, non-financeable low-quality projects. This has resulted in a great deal of time being wasted. Since we receive our commission only when finance is placed with a project, we have absolutely no interest in projects which we believe we will not be able to finance. Consequently we now require all brokers to demonstrate that they have at least one viable project before we enter any form of discussion. To do this please follow the standard application procedure by completing the online project finance enquiry form. Please note that separate projects must be on separate forms. There is no need to divulge your client’s identity at this early stage, simply give your name (state that you are a broker) and contact details in lieu of your client’s name and contact details.

I would like to be your exclusive broker for a particular region. Would you agree to this?

No. We do not offer brokers exclusive regional rights.

RATES AND TERMS

What are your loan interest rates?

Interest rates are determined by perceived degree of risk, market conditions, lender sentiment and other factors prevailing at the time of the loan agreement, therefore loan interest rates can only be determined shortly before the loan agreement is closed.

What is your loan repayment period?

The loan repayment period is determined by a number of factors including project scale, projected return on investment and other economic indicators. The loan repayment period therefore can only be determined after we have performed a comprehensive project analysis.

What happens if I do not wish to accept any of your loan proposals?

There is no obligation whatever on you to accept any of the loan proposals. You have the absolute right to accept or reject any of the proposals.

Do I have to pay a penalty if I do not accept any of your loan proposals?

No. There is no penalty whatever if you prefer not to accept any of our loan proposals.

Am I under any obligation to accept finance from you?

No. You are under absolutely no obligation whatever to accept finance through us.

How do you obtain your fees?

We charge a percentage of success commission fee on all finance accepted through us.

When do I pay you your success fee?

At the same time that finance is placed with your project.

FINANCE PROVISION

How are you able to provide finance with the prevailing financial conditions in the international banking sector?

Banks typically provide only a very small percentage of the finance we provide. We obtain our finance from sources other than banks.

I do not own the land on which my project is to be built, I have no money to put into the project and I can offer no security, is it still possible for me to obtain finance through you?

No. Under current market conditions we are unable to provide project finance for projects in which the applicant has zero equity. Investors require that the applicant shares some of the risk.

I have a time-critical project which will fail if it is not financed soon. Do you provide finance for time-critical projects?

No. To ensure that we retain our lenders’ trust we analyze projects with great care to minimize their risk. This takes time so we do not become involved in time-critical projects.

Do you provide seed capital for projects?

No. We do not provide seed capital for projects.

Do you provide Islamic finance?

No, we don't.

I am developing a project and I have a bank guarantee or similar financial instrument, will you provide me with project finance?

We only consider finance provision for projects which fully meet our criteria. If your project does not meet our criteria we will not be interested in your project even if you have a bank guarantee or similar financial instrument.

I am not developing a project but I have a bank guarantee or similar financial instrument, will you provide me with finance?

Yes, we would consider.

I am seeking finance for a non-profit organization, can you help me?

Possibly. We are strictly commercial but we are prepared to assist non-profit organizations subject to our usual terms.

THE PROJECT FINANCING PROCESS

How do you provide project finance?

We form a syndicate comprising a number of professional international investors and lenders. From the investors’ viewpoint, the advantage of being a member of a syndicate rather than the sole investor is that it spreads the risk for the project and each investor can see that other investors have independently concluded that the project is viable and profitable.

Who are the members of the lending syndicate?

The syndicate is typically composed of a variety of investors including hedge funds, institutional investors, government investors, private investors, investment banks, investor groups, money market funds, mutual funds, pension funds and venture capital firms selected from our private database of professional investors and lenders. We have associates who are retained by national banks and financial institutions as project advisors.

When is the syndicate formed?

The syndicate is formed after your project documentation has been completed, verified and approved by us. This is in the form of debenture of 1st charge on all assets.

What happens after the syndicate is formed?

After the syndicate is formed we typically offer you a number of loan proposals.

How do the lenders know that the information in my project documentation is accurate and reliable?

The lenders require us to independently analyze and where appropriate approve your project documentation.

How do the lenders know that your approval of my project is trustworthy?

We are usually required to provide financial guarantees to the lenders to support projects approved by us. This is in the form of a debenture or first charge on all company assets.

Do the lenders require you to financially guarantee my project?

Yes. When we approve a project, the lenders usually require us to provide financial guarantees for the first three years of your project’s operation. If the project fails to meet its financial objectives as defined in the feasibility studies and business plan, the lenders are legally entitled to retain the guarantees we have provided in compensation. It is therefore essential that we have complete confidence in the accuracy of the project documentation.

Am I required to supply the lenders with financial guarantees?

Yes. You are required to supply financial guarantees to the lenders.

Do you guarantee providing me with the required project financing?

No. Every project has an element of risk.

What is the likelihood of you providing me with the required project financing?

The likelihood of a project being financed depends on project viability, projected profitability, the quality of the project documentation, prevailing economic conditions and other factors.

How long does it take to finance a project?

The time required to finance a project varies greatly from project to project and is primarily determined by the project’s scale, complexity, nature, marketability, the prevailing economic conditions and the readiness of the project to go to market.

Do you act on my behalf or on the investors’ behalf during the project financing process?

Neither. We maintain very strict independence from you and from the lenders during the project financing process.

Why do you maintain independence from me and the investors during the project financing process?

To have the necessary confidence to invest, lenders must have complete confidence that we are presenting them with a fair, accurate, objective and independent evaluation of your project.

Do you contribute to project development costs?

No. Lenders would not regard us as being independent from you if we took a stake in your project.

Are you interested in entering a joint venture at the start of a project?

No. Lenders would not regard us as being independent from you if we entered a joint venture with you.

Will you invest financially in my project?

If the lenders do not appoint us as loan supervisors we may join the lending syndicate.

When does due diligence occur?

Due diligence typically occurs at the same time as the project financing process.

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