Advantages of film company financing projects:

1. Project orientation

Mainly relies on the cash flow and assets of the project rather than relying on the investment of the project Arranging financing based on the credit standing of the investor or sponsor is the first feature of project financing. Project financing, as the name suggests, is financing arranged with the project as the main body. The lender's focus in project financing is mainly on how much cash flow the project can generate during the loan period for loans, the number of loans, the level of financing costs and the financing structure. The design is directly linked to the project's expected cash flow and asset value.

Due to the project orientation, some funds that are difficult for investors to borrow can be arranged through projects, and some guarantee conditions that are difficult for investors to obtain can be achieved by organizing project financing. Furthermore, due to the project orientation, the loan period of project financing can be arranged and designed according to the specific needs of the project and the economic life cycle of the project, and can be longer than the general commercial loan period. Examples in recent years have shown that some project loan periods can be For 20 years.

2. Limited recourse

Limited recourse is the second characteristic of project financing. Recourse refers to the lender's right to require assets other than the mortgaged assets to repay the debt when the borrower fails to repay the debt on time. In a sense, the form and extent of the lender's recourse against the project borrower is an important indicator of whether financing belongs to project financing or traditional form financing.

For the latter, the lender provides the project borrower with a full recourse loan, that is, the lender mainly relies on its own credit status rather than the project itself; while the former, as a limited recourse loan For project financing that requires recourse, the lender can pursue recourse against the project borrower at a specific stage of the loan (such as the construction period and trial production period of the project), or within a specified range (this range includes the amount and form of Restrictions) to implement recourse against the project borrower. In addition, no matter what problems arise in the project, the lender cannot recourse to any form of property of the project borrower other than the project assets, cash flows and obligations assumed.

The extreme of limited recourse is "no recourse", that is, financing is 100% dependent on the economic intensity of the project. At any stage of financing, the lender cannot recourse to the project borrower other than the project. assets. However, in practice it is difficult to obtain such a financing structure.

3. Risk sharing

In order to achieve limited recourse for project financing, various risk factors related to the project need to be shared among the project investors (borrowers) in some form , other participants with direct or indirect interests in project development and lenders. A successful project financing should be one in which no party in the project solely bears the risk responsibility for all project debts. This constitutes the third advantage of project financing.