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Questions
Questions about Debt Fund Raise
Plain answers to common questions on this service, grouped by what you are trying to find out. Each answer starts with the direct reply.
Eligibility & documents
- Can promoters avoid giving personal guarantees when raising debt?See why lenders usually ask promoters for personal guarantees, which situations allow relief, and what can realistically be negotiated before you sign.
- What documents do lenders ask a company for in a debt raise?A plain checklist of the identity, financial, legal and project papers lenders usually request from a company, grouped so you can collect them early.
- Can a partnership firm or proprietorship raise debt like a company?Partnership firms and proprietorships can borrow from lenders, but legal identity, liability and documentation differ from a company, and so do the limits.
Process
- How do I choose the right repayment tenure for a new loan?Learn how asset life, cash cycle and instalment comfort decide a sensible loan tenure, so repayments never outrun the money the business actually earns.
- How does a moratorium period work in a term loan?A moratorium is a repayment holiday on principal during construction or ramp-up; learn how interest behaves in it and what it does to your total cost.
- Why do lenders insist on promoter contribution before sanctioning debt?Promoter contribution shows commitment and absorbs early risk; see how lenders judge it, what counts toward it and how to plan your share of the project.
- What happens between submitting a proposal and receiving a sanction letter?Follow the usual stages a lender runs after you submit a loan proposal, from screening and site visits to credit approval, so the wait feels less opaque.
- How do I compare two debt offers that look similar?Look beyond headline price to compare fees, security, covenants, prepayment terms and flexibility, so the cheaper looking offer does not cost more.
- How does a lender work out whether my cash flow can service new debt?See how lenders estimate repayment capacity from profit, depreciation and existing obligations, and what you can do to present your cash flow honestly.
Choosing & comparing
- Should I raise one large facility or several smaller ones?Weigh the simplicity of a single large facility against the flexibility and risk spreading of several smaller ones before you approach any lender.
- What is the difference between consortium lending and multiple banking?Understand how a lender group working under one arrangement differs from separate facilities with several lenders, and which suits your borrowing needs.
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