1. Estimated Gross Development Value

The above term is used in property development project. It actually means the value/worth of the project when it is dully/completely developed or constructed.

In project not involving with construction or development, it is not relevant. But, for our easy discussion with bankers or joint venture partners, please advise the client to put in the estimated annual (yearly) sales of the company or project.

2. Estimated Gross Development Cost

The above term is also used in property development construction. It actually means the estimated total cost of construction/development of a project. Or, the total cost needed to construct the whole project.

In project not involve with construction, it is also not relevant. But, kindly also ask them to fill in the estimated annual (yearly) cost of the operation.

Sinking Fund Menthod of Financing

On loan and financing, we have to go according to the requirements of the bankers.

Although we make allowance/choices for the company to tick on our form as to the type of collaterals that they would like to forward, all depends on the requirements of the lending bank.

In loan application evaluation, the lending bank will look into 3 major factors :-

1. The ability of loan applicant to pay
2. Effectiveness of enforcing compliance
3. Collaterals

On ability to repay the loan, the bankers will look at profitability and cashflow so as to ascertain the viability and repayment capability of the borrower.

On compliance matters, the bankers will look into the law, legal and court system of the country of the borrower.

On collateral, they would like the collateral to be as liquid as possible.

For the time being, the must favourable collaterals demanded by bankers is stand-by letter of credit and banker’s guarantee either with or without a sinking fund.

Thus, on collateral matters, we will discuss with bankers and revert to the company again.

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