Project and Institutional Finance: What Businesses Should Know

Why there's a gap between approval and disbursement

An in-principle indication or sanction doesn't necessarily mean funds are immediately available. Depending on the lender and transaction, further steps typically include legal and technical due diligence, verification of project documents and approvals, completion of conditions precedent, documentation, security creation and other internal requirements — each of which takes time.

What "institutional" finance generally covers

• Builder and project finance — residential or commercial development, subject to project approvals, title, financial viability, promoter contribution and lender requirements.
• Hospital and healthcare facilities — construction, expansion, equipment or other healthcare infrastructure, subject to assessment of the project and operating business.
• Hotel and hospitality projects — construction, acquisition, expansion or refurbishment, subject to feasibility, approvals and lender criteria.
• School and college infrastructure — subject to applicable institutional, property, regulatory and lender requirements.
• Doctor and professional practice finance — establishing or expanding eligible professional practices, subject to income, project cost, security and eligibility assessment.

How disbursement typically works for construction finance

For construction-related financing, a lender may release funds in stages linked to verified project progress, subject to its technical inspection, documentation and other conditions. Other facility types use different disbursement arrangements. The applicable schedule is determined by the financing institution and confirmed in the final documents.

What lenders generally check

Land ownership and title documentation, statutory and project approvals, RERA or other applicable registrations, environmental or sector-specific permissions where relevant, project cost and means of finance, financial projections and cash flows, promoter contribution, existing borrowings, the construction schedule, and proposed security and repayment source all typically factor into the assessment. Requirements vary between lenders and project types.

Why a project can face delays even when it "appears fundable"

Documentation, title or approval issues, project economics, promoter contribution shortfalls, existing obligations, security requirements or simple lender policy can all cause delays or declines — even for projects that look strong on paper. The independent lender makes the final call after its own assessment, which can factor in considerations not visible from outside the process.