In India, most of the advisory services provide a wide range of capital raising solutions to their clients. Debt syndication is one of the most demanded financial solutions by big corporations. It is a process of raising a large amount of loan from a number of investors and banks. All the parties to the loan contribute a small portion of the loan as per their risk-taking capacity. Debt syndication is generally sort for taking up venture projects, long gestation projects, and for meeting working capital and business expansion needs.
Debt syndication is an ideal way of raising funds that reduces the cost of borrowing due the diversification of credit across several lenders. The role of an advisory service includes identifying the loan amount, searching for the potential lenders, arranging meeting between the lenders and the borrower, and successfully raising the desired amount.
The advisory services also take the persuasive role of convincing potential lenders to provide funds. They explain the viability of the projects that will be funded from the raised loan and the certainty of returns to the lenders. Most of the lenders are banks, financial institutions, insurance companies, and credit unions.
The advisory firms play a major role in fostering long-term relationships between the lenders and their client. They also take up the exhaustive and complicated documentation required during the process. They dedicate a team of professionals for this purpose in order to provide efficient and prompt services to their clients. Some of the firms have their offices in different countries.