Advanced Series: Completion Assurance [Guarantee] Program™ set of Frequently Asked Questions
1. Is there an up-front or application fee?
We do not charge any application or other initial fees that you might encounter elsewhere. Project funding via Completion Assurance Program™ (CAP) also incurs no up-front costs. If seeking funding without arranging a completion assurance guarantee, it depends. Applying for pre-qualification as well as obtaining your financeability report using RAIN are both free. Then together we would review if your project or venture is likely to get funded with the current package of materials you have developed thus far. We have LIMITED TIME OFFER here (1 page overview for the fastest, least up-front cost, 100% loan option).
When CAP funding is your best or only option (infographic)
What’s the difference between Project Finance and Venture Capital?
For venture capital (startup, growth, or expansion) or other types of funding besides project finance, go here. Venture capital raises involve bespoke services, so we would need to charge something ahead of closing if that’s your goal.
Upon receiving a high enough RAIN score (including the last question, which asks if a financial guarantee is or could be available), we will provide possible next steps, suggest your best options for securing capital, without a consulting or application fee. We will indicate whether or not there are sources of funding that match your situation. There are 3 main pathways to funding, described here.
Once you explore and learn a bit about these option, you can then decide which source(s) of capital and terms you prefer. But unless In3 prepares your project’s financial model or summary on your team’s behalf (writing, research, strategic advice or similar services), or showcase your project to prospective guarantors, there is no up-front cost involved whatsoever with In3 CAP funding.
2. What are the basic requirements for project finance?
See the 4 S’s — four cornerstones for expedited financing at the best available terms via our Completion Assurance Program (CAP). To pre-qualify for CAP, check out these Six Essentials and use the MS Word templates at our Proposal Builder.
More on how completion assurance guarantees work
Deciding what type of guarantee to use (and how to arrange it)
Instructions for securing a sponsor (or asking In3 to find your qualifying CAP funding guarantor via an MSA)
For short-term financing, M&A, or venture finance, ask us. We can help with these transactions if your situation fits with sources that we regularly use, such as private impact investment funds and close-at-hand family offices. See also “What In3 won’t do.”
If you cannot meet CAP’s conditions (often less onerous than it seems, as multiple solutions exist for many or most limitations, including the financial guarantee itself), the basic requirements for startups, expansions, renovations, refurbishments, energy efficiency retrofits (all are welcome and may qualify) vary widely. Here are some general guidelines:
- Senior Loans must be for at least 3 years and typically not more than 20 years (can finance up to the length of a power purchase/offtake agreement, for example). No early repayment penalty. Note that longer traditional senior loans (with collateral used as credit enhancement) ease cash flow; shorter loans usually provide better interest rates. CAP is an exception here — APR interest is the same no matter what loan length.
- Commercially sound projects backed by a solid financial model with transparent assumptions. Refer to industry standards and either US GAAP or IFRS accounting rules. Investors need to assess the risks without digging. Better still, analyze and summarize the risk profile and include that in due diligence materials.
- Senior management track record — at least 3 years experience in the relevant industry. Background checks and “KYC” practices are common these days.
These points are applicable to project finance (more). Are you sure you know the difference between project and venture capital? Visit In3Group for more about venture funding.
3. What types of capital (in a project or venture’s “capital stack”) can be arranged?
Traditionally, our specialization was the debt component of project finance, but we recognize that some companies have ambitious business plans that call for more debt than they can reasonably obtain, or are very early stage and need more development money. If the target is funding a project that isn’t yet shovel-ready, but total required capital is above $25,000,000, we won’t be bothered by an earlier-stage status, so long as other conditions can be met. See above, Question #2 regarding “basic requirements”.
For others, they would rather not rely on loans when equity investors might be willing to provide “patient capital” for the potential upsides from their future exit.
Accordingly, we prefer to arrange both debt and equity but also can assist with various other forms of non-bank finance such as quasi-equity (has some elements of equity, such as more flexible payment schedules, plus some of debt, or convertible debt), mezzanine debt, revenue contracts, M&A/buyouts, and more. With a management services contract, we can help qualified companies secure early or seed-stage financing to conduct feasibility studies, usually via through angel investors, seed-stage impact investors or development finance institutions offering zero- or low-interest (concessionary) loans, forgivable loans or grants. Check our “industry sweet spot” then talk with us about your requirements.
4. How long does it take? How soon will I know if a project loan is qualified and approved?
Depends on which program you use. Initial approval — validation that the project is well qualified for reasonably attractive debt finance — usually takes a few weeks, tops. How long to get funds in hand? Depends on the desired source of capital, risk profile, and the amount. Larger projects take longer, typically, but smaller, riskier investments (such as for seed money, or a la carte feasibility studies) can run into objections that can be hard to overcome.
However, if funding is to come from In3 Capital Partners directly, can be as fast as 3-4 weeks to closing once pre-qualified. No more than 30-45 days is our commitment to first funding once the equity/debt transaction closes, which occurs quickly once a financial instrument (completion assurance guarantee) has been received. However, if from a developmental finance institution (such as US DFC), funds usually take at least 4-6 months to arrive. Sadly, a lot of sources will talk a good story, and chew up endless time with due diligence, but never deliver.
In3 has a proven track record of radically reducing the time it takes — often the difference of many months — than if you attempt to raise money the conventional ways. Fast-track programs, such as the In3 CAP approach, are available to new clients in most regions. Still, count on at least a quarter or so, depending on your state of readiness. We can help you test your likely timing to first funding without cost or obligation. Larger project loans can get bogged down in legal terms (covenants) in the contract, due diligence issues, or other factors that we can safely help you avoid.
We also offer a free assessment tool that takes out most of the risks — a service that helps you determine then summarize the project’s strengths, improvement opportunities and keys to success. In3 can get you answers quickly, once you’re prepared.
Most private investors, debt or equity, vary greatly in their due diligence and contracting. Family Offices and “Angels with a checkbook” can make a decision within a month or so, but most institutional investors take 4-6 months, or even more, with significant amounts of time (after the first 2-4 months of assessment and Q&A) taken up by handling policy clearances, the details of legal matters (such as perfecting liens against assets, asking for bank verifications, or obtaining audited financial statements) as well as other documentation. Our Completion Assurance [Guarantee] Program offers the advantageous terms of an institutional investor with the speed and pragmatism of private funding. Separate CAP (formerly CGP) FAQ.
5. What does In3 charge?
Let’s discuss what work is needed, and who will do what, before attempting to pinpoint appropriate fees-for-service. We rarely let money stand in the way of supporting a project with developmental impacts. That said, we typically charge industry-standard rates for fundraising, with our customary fees equal to roughly half the formula used by our peers, plus a modest retainer.
6. How do we get started?
- More tips (Q&A) on how to qualify for project finance, or view the process steps.
- Detailed Completion Assurance Program (CAP funding) FAQ.
- For other services, see overview or select any of these: Raising Money | Risk Mitigation | Strategic Advisory | Coaching & Education.