Work out margin money requirement instantly with clear inputs, formula shown and shareable results.
Margin money is the promoter's own contribution to project cost, the portion the bank will not finance. It must normally be brought in first, since lenders disburse only after the promoter's stake is demonstrably invested.
Margin money
Loan = project cost × bank share; margin = project cost - loan
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
It aligns incentives and ensures the promoter has genuine capital at risk before the bank's money is exposed.
Sometimes, if subordinated to the bank and locked in for the loan's tenor — quasi-equity rather than repayable debt.