Financing assets
Developing assets successfully requires a business-like approach. Each development is unique and will have different financial requirements. Securing finance for such a development may require selling the idea to many different people.
Typically, a combined package of different types of finance is used to develop an asset and can include:
A capital grant is an amount of money awarded to an organisation for a major item of capital expenditure, such as the purchase or construction of a building. Capital funding can also cover expenditures such as the refurbishment of a building or the purchase of land.
Successfully obtaining grant funding can provide a substantial boost to an asset based development project as grant funding does not need to be repaid.
Capital grants are available from a wide range of sources as detailed below:
A loan is a financial transaction in which one party (the lender) agrees to give another party (the borrower) a sum of money with the expectation of total repayment. A lender usually asks for interest payments in addition to the original loan amount.
Loans are not an income stream but a financial enabling tool. They are simply another way of financing an organisation and should not be considered as a replacement for grants.
Many loan providers now provide lending to the Third Sector. These providers understand the need for good financial return but also consider social, ethical and environmental concerns as equally important.
Various providers offer different levels of finance, each with their own specific criteria and rates of repayment.
Organisations embarking on asset based development projects often organise community fundraising events or approach local businesses in order to raise funding.
Fundraising from individuals, businesses and communities provides valuable unrestricted income to assist with financing such a development.
