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Project viability

Project viability. Steve Bendle– Enterprise Fellow, Community Finance Solutions. Breakout session @ 2.45pm. Project viability Revenue Business plans Sources of finance. Project Viability. Project management tool provides Estimate of cost Estimate of income

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Project viability

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  1. Project viability Steve Bendle– Enterprise Fellow, Community Finance Solutions

  2. Breakout session @ 2.45pm • Project viability • Revenue • Business plans • Sources of finance

  3. Project Viability • Project management tool provides • Estimate of cost • Estimate of income • Means to look at different scenarios • Revenue budget • Cash flow forecast • Summary • Available at www.communitylandtrust.org.uk -resources-project feasibility toolkit. Notes and worked examples intended to explain how to use it Handout – project management tool

  4. Viability exercise How will you get sufficient income to cover costs? • Exercise – 15 minutes • Agree the basis for taking the proposed scheme forward • Handout – viability algorithm

  5. Development • Project management tool provides cash flow forecast • Funding unfinished homes seen as risky • Security for lender: maximum requirement needs to be less than 67% realisable open market value of completed homes • CLT Fund may be able to bridge any gap • Supportive local authorities may be able to help e.g. from receipts or by borrowing from PWLB and on-lending

  6. Revenue Budget • Terms of finance • Voids • Maintenance • Maintenance sinking funds • Insurance • Management • Organisation costs • Impact on capital finance Handout – managing the CLT as a social enterprise

  7. Revenue budget exercise Will the CLT be viable? • Exercise – 15 minutes • Consider budget options • Handout – managing the CLT as a social enterprise

  8. Business Plan • Brings together all elements in one place • Need to be met in particular the required affordability • External factors and environment – parish plan, local authority policies, partners etc • Threats, opportunities • Source of land • Professional team and procurement • Cost and income • Revenue budget • Finance • Risks • Other issues e,g. environmental targets, needs others than housing, future plans • Executive summary useful as document for explaining scheme to others: could be written first!

  9. Sources of Finance • Technical aid • To set the proposals in motion • CLT Fund/Charities • Pre-development • to resolve site issues and secure planning • CLT Fund/Local authiorities/parish council • Development • to build the homes • Ethical bank (Triodos, Charity Bank, Unity Trust Bank, HCA?) • Smaller building societies (Ecology) • Big Society Bank in future? • Long term • to re-finance on completion, repaid from income • Mortgage allocations for part-equity buyers • Triodos/Charity Bank • Big Society Bank/new proposals under development

  10. Summary • Project development tool • Plan for feasibility: to be amended/changed as necessary • Intended to be gradually amended from estimate to reality • Pre-development • CLT Fund best option: to secure planning on a site and resolve issues to be tackled • Revenue budget • Need to have an idea from day1 how this is going to work • Summary business plan can help in promotion/seeking agreements • Finance • Funders exist: early contact will help

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