why do firms use project finance 
project finance is a way for companies to fund long term projects this form of financing uses a nonrecourse or limited recourse financial structure firms with weak balance sheets are more apt to use project finance to meet their funding needs rather than trying to raise capital on their own this is especially true for smaller companies and startups that have large scale projects on the horizon the bottom linecompanies need capital in order to begin and grow their operations one of the ways that certain companies can do so is through project financing this form of funding allows businesses that may not have a strong financial history to raise capital for larger long term projects sponsors which invest in these projects are paid using cash flows from the project this is unlike corporate finance which is less risky and concentrates on maximizing shareholder value 