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Describe the costs to be considered when securing finance.

Describe the costs to be considered when securing finance.

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Answer #1

The total expenses associated with securing finance of a project or purchasing of any type of asset or any business arrangement is known as finance cost, those cost were to be considered as securing finance cost, that may include interest payments , financing fees charged by intermediary financial institution and the fees or salaries of any personnel required to complete the financing process and this is known as Cost of Finance(COF)

Example : for purchasing or building a property

cost to be considered are

1. fees for the consultant

2. salary for the staff deputed exclusively for this project

3. Interest on borrowings

4. Documentation Cost

5. Processing fees paid to the bankers

6. Any other Governments fees

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