Financing of Solid Waste Management Projects

Financing of solid waste management projects can be pretty overwhelming for the city government, especially if the government see it as a critical part of the service they should render to the citizen and if the citizen also hold it as a basis for measuring the performance of the government and using it as one of the conditions for re-election.

The increasing cost of waste disposal is a cause of major concern in developing nations

Solid waste management entails different aspects. Generally speaking, waste management consists of pre-collection, collection, transportation, storage, treatment, and disposal. The modern hierarchy of waste management includes prevention, minimization, reuse, recycling, energy recovery, and disposal.

All these aspects require proper funding in rendering a good waste management service to the society. As citizens, we hardly give any thought to the different aspects and what it takes to ensure it is carried out efficiently and effectively.

Financing Options for Solid Waste Management

There are four different options for financing of solid waste management projects. The option chosen will be dependent on various factors. The chief factor will be “what is the end goal of providing waste management service to citizen” and this is to be determined by the city government. Therefore, we say finance option is directly related to waste management goal of a city or State.

Public Financing

This primarily involves funding of waste management service entirely by the government through budgetary allocation. The government determines how it will generate the cash for service and this can be through taxation or redistribution of funds generated from other sources like sales of city natural resources or combination of various sources of funds.

In developing countries, this is generally inefficient due to the corruption within the government and lack of proper waste management capabilities in most instances. The government might decide to charge a service fee or not.

Private Financing

This involves infusing funds from the private sector into waste management service and also overseeing day-to-day running of the service. However, the hired company will charge a service fee which will be determined by calculating the amount of invested funds, operating cost, and profit envisaged. This will be spread over a period of time.

This financing option can deliver optimal result in providing waste management service but the private sector needs to be checked in order not to set a high fee that will end up scaring citizens which might lead to citizen abhorring the service.

Public-Private Partnership (PPP)

This is a special type of arrangement which brings together the government and private sector in providing funds and management capabilities for the delivery of waste management service.

All things being equal, this arrangement is best because the government will be able to regulate and have a say in how the service should be delivered especially as it relates to the setting of service fees which might be difficult in the solely private financing option. The PPP can equally be extended to be a Joint Venture (usually termed as Institutional PPP).

Donors and Grants

This funding mechanism is dependent on the interest of the donor organization. While it is a good way to develop a city’s waste management infrastructure, attracting and utilizing grants is solely reliant on what the donor considers as important. Hence, it might be difficult for a city government to dictate how the funds should be distributed among the various aspect of waste management.

Waste management projects based on public-private partnership (PPP) model has more chances of success in developing countries

However, this type of financing can be combined with a PPP arrangement to cater for a specific waste management aspect that is in tandem with the interest of the donor and can be part of the city government contribution to the PPP.

Conclusion

In conclusion, waste management financing is quite dynamic just like many other services and infrastructure provided by a city government and the best option for financing the provision of waste management service can only be made after appropriate due diligence and consultation with relevant stakeholders has been made and observed.

6 Alternatives For Small Business Financing

The requirements that a small business must meet to get financing from traditional lenders are challenging to achieve, particularly for startups. Often, business owners have to go through a drawn-out process, in addition to providing collateral before they can get the much-needed funds for their businesses. The credit score also comes into play, and a business owner must prove the ability to repay the loan without any difficulties.

However, business needs such as challenges with working capital won’t wait for you to build your creditworthiness before getting financing. Fortunately, there are other alternative financing options you can look at and get quick financing without as much hassle as with traditional lenders. Look at these six alternative options for financing your small business:

Alternatives For Small Business Financing

1. Merchant Cash Advances

This is one of the quickest ways to get financing as a small business, although relatively expensive compared to most other financing options. In merchant cash advances, the financier offers you a lump sum amount and then recovers the sum. Typically, the cash advance buys the merchant rights to a percentage of your sales.

For instance, if you get a business cash advance from Credibly or any other merchant, you’ll need to give them a portion of credit or debit card sales until you pay the advance in full. It’s a convenient but relatively expensive way of acquiring financing for your small business. Using a merchant cash advance is an excellent financing option if you’re struggling with bad credit or can’t qualify for other financing options available for small businesses.

2. Invoice Factoring

Another alternative financing option available for small businesses is invoice factoring. It can be a quick solution to cash flow problems in a business. In essence, you’ll be selling your unpaid invoices or account receivables to a factoring company instead of waiting for your clients to pay. The application process is usually straightforward and takes a short time to process.

There are two common ways to factor in your invoices: recourse and non-recourse. Your business will have to buy back all the invoices that the factoring company couldn’t collect from your customers in recourse factoring. On the other hand, the factoring company assumes all the risk in non-recourse factoring.

3. Peer-To-Peer (P2P) Lending

P2P lending happens over the internet between the lender and the small business and eliminates the need for intermediaries. This quality makes this type of financing quite appealing to many small business owners. The transaction happens through a P2P website that connects borrowers to investors in an easy and hassle-free process.

However, like many other types of financing, including when taking personal loans, your financial credit score needs to be in good shape if you are to qualify for P2P funding. All you need is to research on a reputable P2P site and register.

4. Purchase Order Financing

This alternative financing method is similar to invoice factoring, except that you use outstanding purchase orders. You can use your purchase orders to get financing from a lender by advancing you money to cover costs associated with the order. To benefit most from this type of financing, you need to have a large order from a reputable customer.

It also helps if you’ve already signed an agreement with your customers such that it’s almost certain that the order will go through. However, ensure you have clear terms on costs and fees with the financier. You don’t want to receive unpleasant surprises when the financier gives you their charges.

5. Business Line Of Credit

A business line of credit gives you access to a predetermined amount of money, typically based on your company’s cash flow and credit rating. This type of financing is more like using a credit card than taking a loan. You don’t have to use the credit line until you need it, and you won’t be charged interest on any funds you don’t utilize.

You’ll be required to start making payments immediately after borrowing the funds. As you pay the debt, your credit line is replenished. This means that as long as you can borrow and repay, you’ll always have access to the available funds within your limit.

6. Small Business Grants

Grants for small businesses allow business owners to start or expand their businesses without worrying about repaying the money they receive. Government agencies, nonprofits, and corporations often target and offer grants to specific types of businesses or specific industries.

personal loan faq

Businesses that don’t have access to traditional debt financing can benefit from small business grants. Free funding has the drawback of being sought after by everyone. Finding and applying for grants is a time-consuming process, but the results could be worth the effort in the long run.

Takeaway

The requirements by traditional lenders before financing small businesses can lead to more of them missing out on the much-needed funds to grow their businesses. Alternative financing options are a game-changer. Business owners now have a new way to get cash, bypassing traditional lending sources. Channels like those discussed above allow small business owners to get financing when they need it most.