The main differences between project loans and traditional lending methods

Project loan borrower is not the sponsor, the borrower is the project company set up for the construction of the project. In the project loan, the bank is mainly focused on the economic value of a particular project and loan to the independent project company; while the traditional loan, the lender will be loaned to the investor, the investor will then invest the money in a project.

(2) different sources of repayment

project loan repayment source for the new project revenue, recourse is mainly limited to the "project", that is, the project loan to the completion of the project as a source of repayment of the economic returns, the project sponsor does not assume the obligation to repay all the project loan from its property (may be partially assumed); the traditional loan relies on all of the borrower's property and its revenue as a source of repayment (full recourse). source of debt repayment (full recourse).

(3) Diversification of loan modalities

In project loans, there is often more than one loan for a particular project, and different loans may be provided at different stages of the project; traditional loans are generally limited to one loan modality.