Is project finance a suitable option for small start-ups?

Unless the start-up has a concession or an off-take agreement that provides a steady and secured stream of revenue and unless the sponsors have a track record in performance or proven-technology, I don't see how it can be a suitable option!

By definition and practice, project finance is used to finance infrastructure and industrial projects with heavy CapEx, and entails long term loans given to an SPV and secured by the cashflows of the project being financed rather than the balance sheet of the sponsors.  In other words, the project is ring-fenced and lenders have no recourse to the sponsors.

in some cases it could be.