Construction
Two different borrowers wear the same word. A developer funding a project and a contractor building it have almost nothing in common in credit terms, and the facility that suits one is the wrong product for the other.
The developer’s constraint is what the escrow does to project cash. The contractor’s is the receivables cycle.
SWAMIH backgrounder, Press Information Bureau, 13 March 2026; Indian Infrastructure, 3 July 2026. Both figures are current as at those dates and move.
A market that has split in two
Banks are funding the top tier. Mid-stage is the half that struggles, where the capital treatment of construction exposure under Basel III makes the lending expensive for the bank before it is risky for the borrower. So where pricing is justified to you as a consequence of the RBI’s 2025 project finance norms, test it: what took effect on 1 October 2025 was a fraction of the 5% the 2024 draft proposed.
Completion capital has a gap in it. SWAMIH Fund I committed its corpus by December 2025 and Fund II, ₹15,000 crore announced in Budget 2025-26, was still being launched as at March 2026 — so the bridge for a stalled but viable project is private credit, reported through 2026 at 18–20% against SWAMIH’s roughly 12% IRR. Secondary numbers: the level to negotiate away from.
Project finance, after the RERA escrow
Seventy per cent of what buyers pay sits in the designated project account and comes out only in proportion to construction completed, so the free 30% is what services debt, funds land payments and carries overheads across the whole portfolio at once.
That also decides how the facility should disburse, and it is where sanctions quietly fail. Milestone-linked drawdown and the RERA withdrawal mechanic are two milestone systems on one project, certified by different people — so a sanctioned tranche can sit undrawn while the work it was meant to fund is the work that would have released it. Aligning them at sanction costs a conversation; finding the mismatch at the third drawdown costs a restructuring.
The receivables cycle
For a contractor the constraint is almost never the order book. It is the distance between doing the work and holding the cash: retention of 5% to 10% is withheld from every bill and released only after a defect liability period 12 to 24 months later, and no turnover-based assessment funds a receivable that sits for two years. Non-fund limits are usually the real ceiling, because the mobilisation advance and the performance guarantee each carry a cash margin.
Insurance surety bonds are the development worth acting on — over ₹29,000 crore across more than 3,300 bonds as at July 2026, and more than 300 central entities accepting them. A surety bond carries no cash margin and does not consume bank limits, so where the ceiling is non-fund headroom it releases working capital that was never earning anything. Whether your procurer accepts one is a question for before the tender.
Heritage reconstruction
As at 2026 there is no heritage debt product in the Indian market, because a restoration usually has no revenue line to service debt with. The money is assembled rather than borrowed — conservation budgets, Ministry of Culture grants, Adopt-a-Heritage 2.0, Swadesh Darshan 2.0, and corporate CSR, a named head under Schedule VII of the Companies Act 2013.
That inverts the cash mechanics, and it is what heritage budgets get wrong most often. A grant reimburses against milestones already delivered; a facility disburses against milestones about to be. So a body that has raised the entire cost of a restoration still cannot start without bridge funding nobody put in the budget — and a lender has to be shown the reimbursement schedule as the repayment source.
Questions we answer in the first conversation
Is there a route into SWAMIH II for a project that is net-worth-negative at project level, or does the test end the conversation?
What DSCR and inventory cover will an NBFC underwrite mid-stage inventory against?
How should drawdown be structured so the RERA escrow does not strand a sanctioned tranche?
Which procurers accept a surety bond in place of a bank guarantee, and what happens to the cash margin already locked?
Can heritage grants sit alongside senior debt, and who holds first charge?
Tell us what is fixed
The date the tranche is needed, the guarantee that has to be issued first, the approval the programme is waiting behind. Enough for us to say whether we are useful inside that window — and enough to say when we are not.
Answer the five questions