What does a lender receive in addition to interest in participation financing?

In participation financing, a lender not only receives interest on the loan provided but also takes part in the financial success of the project. This means that in addition to the regular interest payments, the lender receives a share of the profits generated by the project. This arrangement aligns the interests of the lender and the borrower, as both parties benefit from the project's success.

If the project performs well, the lender can earn significantly more than through traditional interest alone, which incentivizes them to support the project's development actively. Moreover, this approach can make it easier for borrowers to obtain financing, as lenders have a vested interest in the project's success beyond just recovering their borrowed funds.

Options such as collateral assets concern the security for the loan itself, which is a separate aspect of lending; preferential rights on future loans do not accurately reflect the nature of profit-sharing; and equity shares in the property would imply ownership interests rather than a profit-sharing model as seen in participation financing. Therefore, the most accurate description of what a lender receives in addition to interest in participation financing is a share of the project profits.