1. What criteria must a project conform to before it can be submitted?
2. How long is the project evaluation process?
3. Which financing options are available?
4. Who is responsible for the initial costs involved?
5. Which projects will not qualify for financing?
6. Will my project’s intellectual capital be protected?
7. Can the process be cancelled at any stage?
1. What criteria must a project conform to before it can be submitted?
Property development projects introduced to Patin International for funding must conform to the following basic criteria:
- The project needs to be registered in a company,
- Our investment must be in excess of $1 million (one million US Dollar),
- The project’s annual ‘Return on Investment’ (ROI) must be 30% or more depending on the type of property development. (A low ROI may be substituted with a strong ‘Internal Rate of Return’ (IRR), more commonly refer to as ‘Net Present Value’ (NPV), of no less than 20% per annum.),
- The property developer applicant is to provide all the relevant permissions and rights, including all approved building permits, applicable zoning certifications, architectural designs, plans and models, all professional consultant services, etc. and to comply with all statutory and/or local authority requirements in order to immediately commence with the Project.
- The property developer applicant must have the exclusive rights to acquire the property of land earmarked for the proposed property development project,
- The company’s Board of Directors must consist of at least two managers with industry specific expertise and knowledge relating to the project.
2. How long is the project evaluation process?
The duration of the project evaluation process varies from project to project. The initial project evaluation is done within five days of being submitted.
As venture capital investments and project developments are by nature high in risk, our clients are asking Patin International who know nothing about them, their capabilities or their venture, to commit substantial capital to their project and to share in the inherent risks presented by their project. It is therefore to be expected that Patin International wants to know as much as possible about their clients and their ventures. Patin International obviously needs to make informed decisions.
Our clients are advised to refrain from having unrealistic expectations about the amount of information and documentation that will be requested as well as the time period involved in the negotiation and facilitation process.
Projects can unnecessarily be delayed because of:
- Incomplete documentation being submitted.
- Geographical considerations.
- Comprehensive due diligence process.
- Lack of dedicated expertise and management support on the part of project leaders.
- Unrealistic expectations by project leaders.
- Nature and scale of projects.
It is of utmost importance to note that every care should be taken to ensure that the Business Plan should comply with strict international standards as well as those standards preferred by Patin International to avoid the situation where a project is dismissed purely on grounds of ill prepared documentation. As this situation arises very frequently, it is indeed unfortunate because the dismissal of such projects have no relation to the viability of the project whatsoever.
Project leaders should bear in mind that any errors, incompleteness, omissions and/or a lack of clarity will reflect negatively on you as project leader. It may also result in unnecessary and lengthy delays in the due diligence process. This can also influence the opinion provided to Patin International about the viability or profitability of your project.
3. Which financing options are available?
Patin International offers equity-structured finance for projects requiring medium- to long-term financing of $1-million (one million US Dollar) or more. Patin International will be directly involved in the business, providing strategic direction to management as well as financial support for the company. Patin International may have a seat on the board but does not usually participate in day-to-day management. The reward is rapid growth of the enterprise in the medium- to long-term, with Patin International exiting through the sale of the company, a management buy-out, or a flotation on the stock market.
Patin International seeks investment opportunities to finance viable property development projects, with management teams that have direct experience in the property market, and partners who can demonstrate a strong commitment and ambition to making their business plans work.
4. Who is responsible for the initial costs involved?
The following diagram illustrates the applicable responsibilities and costs involved of the project leader, when the project leader requests venture capital or project funding for a property development project from Patin International.
The project leader:
The costs involved in the preparation of a Business Plan, the costs pertaining to the project leader’s legal and financial advisors involved in negotiations as well as applicable travel and accommodation expenses are for the project leader’s account.
5. Which projects will not qualify for financing?
Projects under $1-million (one million US Dollar) in value and that do not have the ability to deliver a minimum return on investment of thirty percent per annum, will not be considered for financing.
Other reasons why projects may be declined include:
- Non-compliance with Patin International’s project financing preferences, and/or
- Non-compliance with Patin International’s rate of return requirements, and/or
Non-compliance with Patin International’s geographical preferences.
6. Will my project’s intellectual capital be protected?
Yes. Patin International provides contractual protection.
7. What percentage of projects is generally being approved?
Patin International has the sole and exclusive right to cancel the process or procedures at any stage for various reasons. For example:
- The information provided by the project leader will be taken by Patin International to be true and correct. If any of the information proves to be incorrect, misleading or fraudulent, for whatever reason, the process or procedures will be halted immediately;
- On written request from the project leader;
- If the project or request is found to be not viable, profitable or reasonable.
In such an event, Patin International will assume no responsibility for any losses of whatsoever nature incurred by the project leader, whether resulting from liability for international travel expenses, due diligence costs or any other related expenses or costs from whatsoever nature.