A 4-star eco resort project on a natural site came to us: a beautiful concept, an architectural sketch, investor expectations - and a financial model that «didn't add up». The funding required was large, in a single tranche, and the payback looked vague. Here is how we packaged this investment project so that it became clear to both the bank and the government incentive program operator. No names or brand - just the methodology and the numbers.
This is an anonymized case: we deliberately removed the brand, location and participants. What matters is not one team's story but the logic itself - how to turn an ambitious idea into an investment package that passes review by a professional investor.
The project required about $28M of investment «in one chunk». With that structure, the debt load at launch produced a DSCR below 1.2 - meaning cash flow was not enough to service the loan in the early years. For a bank, that is a deal-breaker.
What we started with
The team had done a strong creative part: the site concept, room inventory, restaurant, spa, events program. But the investment packaging was missing. The financial model boiled down to a single Excel sheet with revenue and «profit», without allocating capital costs over time, without scenarios and without a debt profile. The main gaps:
- the entire CAPEX as a single sum in year zero, with no link to construction phases;
- revenue starting «fully ramped» - with no occupancy ramp-up curve;
- no calculation of debt service, covenants or liquidity reserve;
- no sensitivity check - what happens if occupancy comes in below plan;
- no alignment with the industry's government support instruments.
Why the project «as is» did not pass the investor
An investor and a credit committee look not at the beauty of the concept but at the project's ability to service money. As originally built, the model answered «no» on three questions at once.
- Peak load at launch. All the capital is raised before the asset starts earning. The cash gap of the first years is not covered by anything.
- No safety margin. A 10-15% drop in occupancy pushed the project into negative debt service - the model was fragile.
- Opaque CAPEX. A single «construction» line with no breakdown made it impossible to see what could be deferred and what was critical for launch.
An investment project sells not an idea but managed risk. The job of packaging is to show that in any reasonable scenario there is enough money for repayment, and that no unmanageable cash gap arises at launch.
The solution: we split the project into three phases
The main move - abandoning «everything at once». We split the assets across three phases so that the first phase was the minimum sufficient to launch and generate revenue, while the capital-intensive but non-essential-for-launch elements (the indoor aqua complex, the expanded room inventory, the premium infrastructure) moved to phases 2 and 3 and were financed out of operating cash flow.
Base room inventory, a 250-seat restaurant, key engineering and site landscaping - everything needed to open and sell nights. CAPEX about $16M. Only this amount is taken to external financing.
Additional room inventory and a spa complex that raise average revenue per guest. Launched once the resort has reached stable occupancy. CAPEX about $7M, funded mainly from own cash flow.
An indoor aqua complex and premium facilities that look great in the concept but are not critical for launch. Shifting them «to the right» removed the peak load from the start. CAPEX about $5.3M.
Financial model: CAPEX, NPV and DSCR
Under the phased logic we built a full 10-year financial model: a monthly capital-cost schedule, an occupancy ramp-up curve, operating expenses by line item, taxes, a separate debt block and the calculation of key metrics. The main «language» for negotiations with the bank became DSCR - the debt service coverage ratio.
| Parameter | Before (single tranche) | After (3 phases) |
|---|---|---|
| Launch CAPEX under debt | ~$28M | ~$16M |
| DSCR in the first year of service | below 1.2 | 1.94 |
| Project NPV | around zero / negative | +$2.9M |
| IRR | not calculated correctly | ~17% |
| Simple payback | not defined | about 8 years |
By cutting the launch debt almost in half, we lifted the first-year DSCR from below 1.2 to 1.94. The project went from «fragile» to resilient: even with occupancy 15% below plan it keeps servicing the debt.
Defense before the investor and government support
A strong model is half the job. The other half is its defense. We assembled a package that answers the investor's questions before they are asked, and at the same time connects to support measures for the tourism industry.
- Scenario analysis. Base, conservative and stress scenarios with different occupancy and average check - to show the safety margin, not a single «pretty» calculation.
- Sensitivity. A table of how key factors (occupancy, average rate, loan interest rate, CAPEX) affect NPV and DSCR.
- Debt profile. A drawdown and repayment schedule, a grace period for the investment phase, a debt service reserve.
- Government support structure. Interest-rate subsidies under tourism development programs, regional support for engineering infrastructure, special economic zone tax regimes - built into the model as separate scenarios.
- Transparent CAPEX. Each phase comes with cost-estimate logic and a contingency reserve, which removes the «what if the estimate grows» question.
We do not hide risks, we quantify them. The investor sees not only the base NPV of +$2.9M but also the project's behavior under stress - and decides with full awareness. That earns more trust than a single optimistic scenario.
An investment project passes not when it is drawn beautifully but when it answers the investor's main question: will the money come back in any reasonable scenario. Phasing and an honest debt profile answer it better than any presentation.- G-Invest
Result
A one-page idea became an investment package: a business plan, a financial model with CAPEX allocated across phases, NPV and DSCR calculations, scenario analysis and a delivery roadmap. The project could now be discussed in substance with the bank and the government incentive program operator.
Frequently asked questions
Why split the resort into phases if you could build everything at once?
Phasing reduces the peak debt load at launch, when the asset is not yet earning. This raises the DSCR of the early years and removes the main cash gap. Capital-intensive facilities that are not essential for launch are financed later - out of operating cash flow.
What is DSCR and why does the bank look exactly at it?
DSCR (Debt Service Coverage Ratio) is the ratio of cash flow available for debt service to the loan payments for the period. A value above 1 means there is enough money for the payment. Banks usually require a covenant of 1.2-1.3, so a DSCR below that level at launch is a deal-breaker.
What documents are part of the project's investment package?
A business plan, a financial model with time-phased CAPEX and the calculation of NPV, IRR, DSCR and payback, scenario analysis and a sensitivity sheet, a debt profile, a delivery roadmap and a government support block. That is enough for a conversation with an investor and a credit committee.
How are government support measures reflected in the financial model?
As separate scenarios: interest-rate subsidies, regional support for engineering infrastructure, special economic zone tax regimes. This lets you show the investor both the base calculation without support and the improved one with it, without mixing facts and expectations.
Can you package a project this way without disclosing the brand and participants?
Yes. The methodology does not depend on the name: what matters is the asset's parameters, the accommodation market, the CAPEX structure and the debt profile. We publish this case anonymously - without brand, location or names, keeping only the working logic and the metrics.
We will package your investment project for the investor and government support
We will build a business plan and a financial model with honest CAPEX, NPV and DSCR, break delivery into phases and prepare a defense before the bank and the support program operator - so the project passes rather than stalls at the credit committee.