What funding structure involves borrowing money and repaying it as the project is utilized?

The funding structure that involves borrowing money and repaying it as the project is utilized is characterized by a "pay as you use" approach. This method recognizes that financial obligations are incurred upfront when funds are borrowed for a project, and those obligations are subsequently settled through future revenues generated by the project's use. This could apply to various capital projects where the costs are financed through debt, with repayments being made from income or revenues derived from the usage of the project itself over time.

This structure is distinct from other methods of funding. For instance, a "pay as you go" funding structure typically means that expenses are paid for with current revenues rather than borrowed funds, allowing for more immediate but possibly limited capital expenditures. Unlimited Tax General Obligation Bonds and Limited Tax General Obligation Bonds are specific types of debt instruments that municipalities may use to raise funds; however, they don't inherently reflect the concept of repayment based on project utilization. Instead, these bonds are repaid through general taxation or designated tax revenues, regardless of the project's actual use at any point in time.