There are various avenues to try out when you need to
raise funds for business needs. If the requirement is specifically to invest in
facilities and infrastructure, business owners usually find it tough to close
the gap between the money they have in hand and the amount they need to rise.
While exploring the new age solutions in fundraising
for this purpose, infrastructure debt funds are an ideal consideration to make.
Many business owners have heard about it and many others are confused about how
to go about this.
question most commonly raised is – ‘how
can I effectively leverage infrastructure debts to grow my business?’ Let’s
take a closer look at what the business
administrators should know about leveraging infrastructure debt for
Advantages of infrastructure debts
As mentioned above,
business owners do have multiple options in order to address cash flow issues.
These solutions effectively range from applying for a loan (debt) to giving off
an investor a part of your business against the funding they initiate. Debt is
the better option among the two as it allows you to retain and control your
Businesses need to take a debt for two major reasons.
Firstly, it is to fill any cash flow gaps, where an ideal debt allows you to
stay live in business by getting through difficult financial situation.
Secondly, it is the usage of debt financing as an ideal avenue to stimulate
When it comes to infrastructure debts,
leveraging such debts requires a solid plan and in‑depth understanding of what
kind of a return on investment (ROI) you need to generate while further
re-investing the funds.
To do better while leveraging infrastructure debt funds,
you need to first ask the following questions yourself:
- How much you want to raise through infrastructure debt funds?
- What is your plan on
spending the funds?
- Will the planned
investment ensure a return on investment (ROI) justifiable in a direct economic
- Will the timeline for
your planned ROI effectively match up with the repayment obligations to
To better understand this
scenario, one should also know the interests investors have in infrastructure
debt funds as below.
- Finding it as a long-term
investment vehicle, investors are primarily driven by the possibility of a
long-term cash flow.
- Infrastructure debt funds
are more yield-focused than growth-focused in terms of returns, which attracts
that category of investors.
- Capital stability is
another attractive feature.
- Higher degree of
the best infrastructure debt funds
If you are hunting for
the right opportunity to leverage infrastructure debt funds to capitalise your
business, an ideal option is to identify a specialised investment management
firm where the expert fund managers can effectively take up your project and
link it with relevant investment opportunities they offer.
It is also a reassuring
fact that the infrastructure debt funds sector is now surging with capital and
the investment managers are on the look out for adequate opportunities to
invest by meeting the compliance criterion. So, in order to leverage this
opportunity at best, your first step is to make yourself compliant with the
norms of infrastructure debt funds to be eligible.