Staged financing provides capital to a trader at different stages or "milestones" based on the achievement of specific goals or objectives. This approach allows investors to assess progress and performance before committing additional funds, thereby reducing the associated risk.
Key Characteristics of Staged Financing:
-
EVALUATION STAGE:
-
PHASED DISBURSEMENT: Capital is distributed in increments. Each tranche is released only when predefined objectives are met.
-
SPECIFIC GOALS: Milestones can include objectives and growth metrics, among others.
-
RISK REDUCTION: Investors can monitor performance and adjust their investment according to the success of the project.
