3.7 The prices of early PFI contracts reflected the private sector's caution about predicting costs over a prolonged contractual period in the absence of experience. Since then, contractors have become more confident about pricing contracts as their experience of PFI has grown. Banks were similarly cautious in their approach to funding early PFI deals because of their perception of the risks involved in long term projects under a new form of procurement. Since the early projects, financing costs (as reflected by lending margins) too have reduced as the PFI market has developed and contractors have demonstrated their ability to manage these projects successfully.