What’s Your Project’s Finance-ability?

Use this checklist to help guide preparations for funding your Project.  For Venture Capital raise tips and techniques, go here.

Not clear on the differences?  Learn more about project versus venture funding.

Gather the following financing information, then assemble your package (or polish the one you already have) to “make the ask” for funding.  This checklist will point out practical steps you can take to secure funding as rapidly as possible, at the best-available terms & conditions.  The idea is to be well enough prepared that your breeze through due diligence without triggering any “red flags” from capital providers during that process, but also so that initial vetting goes smoothly from the start, so your project gets to a binding offer and financial closing without getting sidetracked.

Summary (checklist) — see below for further specifics:

⇒ 1. Sources & Uses of funds — clear purpose statement, show why the funds are needed, the target source(s), and the relative proportion of their intended uses.

⇒ 1.i.  Transparent assumptions — financial modeling with “live” (discoverable) calculations and drill-down capabilities and/or extensive documentation (footnotes or a section of the business plan) for all important assumptions

⇒ 1.ii. Financial fundamentals that make sense — show the results of an analysis is completely reasonable, defensible, largely provable

⇒ 1.iii. Candid risk analysis of the critically important areas that could go wrong and what would be done about it

⇒ 2. Total capital requested, distinguishing between CapEx and OpEx, backed by a complete financial model. (Here’s a chance to shine and show effective communication and proper accounting.)

⇒ 3. Type and Terms of capital requested

⇒ 4. Projected returns / target investor exit

⇒ 5. How do you identify, manage and mitigate risk?

⇒ 6. Collateral pledge of assets for senior debt, necessary for such loans because project finance loans are non-recourse, repaid from cashflows on a standalone basis (more at terminology)

⇒ 7. Financial guarantee, or other credit enhancement

⇒ 7a. For senior debt from institutional sources, a loan guarantee is usually required.  Some lenders also ask for a corporate or personal guarantee.

⇒ 7b. For project equity from private sources, such as In3CAP, a “completion assurance” guarantee as security (one of several options) is short-term credit enhancement, and not a loan guarantee at all.

⇒ 7c. In lieu of a guarantee, 2024 began the option of using a cash deposit, not a form of client equity “skin” (funds that are invested alongside CAP’s funds) compare

⇒ 8. Components of an Investible Project Package — what to prearrange and make available without being asked (outlined below)

⇒ 9. Tips for packaging and presenting a winning proposal — style and cultural affinity … how to make it look easy

⇒ 10. What to expect during lender/investor review — what they are looking for, what they want to discover during initial screening and then via formal due diligence

⇒ 11. Your Fundraising Strategy — how to decide on the best approach.

An optimized package will save tremendous time, effort and energy versus the all-too-common “wheel spinning” that occurs when developers use the wrong information, wrong type or amount of preparation, and/or attempt to raise money from the wrong sources.  It is just as common for developers to over-prepare (but present the wrong “first glance” facts) as it is to make the request for funding with insufficient advance planning.  Hitting that just right isn’t some mysterious guessing game.  You just need to understand the funder’s conditions and expectations, so either they are quite organized and programmatic (can explain indicative terms right away, for example) or you’ll need to ask a lot of questions and dig for answers.  Do this first, get perspective on the current state of capital (primarily private equity, private debt, or both), then complete your package.  Otherwise, it’s “ready, fire, aim.”

The hardest thing to overcome is when a funder’s requirements are not transparent.  Because of that alone, you could be approaching a source that is simply a mismatch — even if you are perfectly prepared and put all the “right information” in front of them.  It becomes a common pattern if you grow impatient (a process we call “thrashing”) where you don’t put the time into discovering their true requirements (or don’t have access to pre-negotiated terms and conditions set up as a program), and thus you will not meet the investor/lender expectations.  This causes you to put in less time to discovering the next set of requirements and sets you up for further disappointment.  Time runs short and you begin to feel like there’s no way to win with so much uncertainty.

To solve this and save everyone time/effort/energy, In3’s funding is organized into a series of programs precisely for this reason:  it won’t work in every situation, but at least you’ll know going in whether or not it is worth pursuing. We respect your time and ask that you do the same for us!  Let’s not waste anyone’s time!!

First, some orientation:

1. What’s the purpose of your project capital raise?

Prepare a clear and succinct explanation of 1) why you require funding and 2) how you will use the funds.  For assistance with creating a Sources & Uses Statement (includes examples on the last page).

There are at least three categories of project capital:

• Greenfield project funding is used to finance project development and construction of operating assets with a useful life of at least 3 years (5-20 years is typical), and as long as 25-40 years or more, such as power generation (solar, wind, hydro, geothermal, waste-to-value), energy storage, clean water, energy efficiency, real estate, agriculture projects, or other type of asset-based infrastructure.  See all sectors.
• Expansion project funding
• Refurbishment / Retrofit funding

Each project will typically require that most of the funding be used for tangible assets, as opposed to intangible uses like personnel costs, sales or marketing, legal or professional fees, or working capital. This is an important distinction between project and venture capital — although some corporate or early-stage venture capital often include tangible property, from land to equipment or even inventory.  This is a matter of proportion — funds must be mainly for tangibles when using nonrecourse senior debt because owners will be asked for a collateral lien against operating assets.

Project funding is also not usually practical for short-term cash requirements such as for finishing the project’s development, or anything that can repaid during the company’s next full operating cycle – usually 12 months.  Short-term capital, such as bridge loans or seed-stage rounds of equity, are not In3’s primary business, but we can sometimes bundle with other goals or make a referral to a pre-vetted partner that would save you time and trouble from shopping around.

Three most important factors to gain lender support and confidence, which greatly accelerates due diligence and enables closing without delay:

(i) Transparent assumptions, where calculations are shown in an Excel financial model, not just as unexplained, hard-coded numbers. Provide drill-down capabilities in Excel, or be sure to document the underlying line-by-line assumptions in a separate document.

(ii) Financial fundamentals that make sense, seem well-reasoned (they pass the “reasonability test”), and are thus believable and seemingly achievable.  Document the average and realistic case, or a slightly more pessimistic case (if possible), but do not say this is “worst case” analysis as you will start a fight and/or lose credibility.  Worst case to you is not nearly as bad as investors can imagine, even if such negative scenarios are highly unlikely.  Check that your Revenue projections, cost estimates and net margin assumptions that make sense over time.  What trends or drivers are likely to change each year?  In general, how do you know you’ll make that much money year-on-year?  Then, once you have it all in order, step back, take an another, more objective look and ask yourself “What seems odd, out of whack or inconsistent?” Add notes to explain why those seeming anomalies exist.  When possible, use and reference third party sources of information (comparable cost quotations, industry standard performance benchmarks or other, similar project plans) to proactively anticipate and ease any likely concerns.

(iii) Candid risk analysis, helps gain lender confidence, including and especially reasonably low (close to zero) commercial/business risk.  Cover other risk factors if either not yet mitigated or notorious areas that can easily “go wrong” — varies widely by sector — and what you will do about such downsides should they manifest.  More at Checklist Item #5. How do you identify, manage and mitigate risk?

2. What Amount are you requesting?

Know how much capital is needed to support specific costs, combining both capital expenditures (CapEx) and operating capital (OpEx) in the initial stage(s) of reaching a complete, operating project? This is where proper cashflow analysis will help arrange the “necessary and sufficient” financing, building a financial model that uses IFRS or GAAP accounting standards.  Why is that important?  The more accurate, defensible and ultimately convincing your story, the more likely you will gain traction (expression of interest) from In3 Capital Partners, an arms-length lender or other investor(s).

Explore what constitutes a “complete” financial model.

We can license you the tools you may need to build such a financial model. Ask us.

3. What Capital Types and Terms are you requesting?

Do you seek debt, equity, convertible equity, something else (preferred equity) or a combination of these?  Most projects use senior debt and equity carried interest, but recent years have ushering in some surprising new structures that seemingly break all the rules. In3 CAP funding and 100% debt options are examples of these.

It is wise to leverage debt when you can qualify.  Using equity only saves interest expense, but unless you can arrange to offer only a modest carried interest, you’d do better to keep more of your own cashflows (net income) and pay back the loan sooner.  On the other hand, if you don’t have to give up control, an equity partner can also be an attractive option when interest rates are high.

Know how long you’ll need the borrowed funds (aka loan “tenor” or maturity date):

• • Working capital loans or lines of credit have short-term maturities, usually under one year.
  • An asset-based project loan or venture loan could have a maturity tied to the life-cycle of the asset, typically three to twelve years.

What capital costs can you afford? Consider the required interest rate (APR) for various types of debt, offering a “carried interest” (equity stake that gives rights to cashflows) or dividends/distributions to equity investors, and the exit strategy (sale of the assets) and timing (at the end of their useful life or before, while some asset value remains).  These details would be factored into an Excel model to show adequate debt service (repayment) reserve, cashflows and acceptable (based on industry standards) Internal Rate of Return, or IRR.  These numbers tell the story and should be used to derive the length of the loan.

Shorter loans increase the debt service burden (larger principal repayments), longer loans increase the total interest paid (increasing the overall cost of capital), but most lenders, including us, do not charge a penalty for early loan repayment, so lean toward longer loan tenors when interest rates are reasonably low.

4. How will you repay the loan and/or provide an equity partner ROI?

Know how your business will repay the loan or provide an attractive return to equity partners (cashflows), per the above. For project finance, this is mainly calculated as unlevered Internal Rate of Return (IRR) for the life of the project financing (perhaps 15-25 years), based on cashflows.  With Impact Projects there may be additional upside benefits, some of which can be monetized such as carbon credits, investment tax credits, or tax equities.

Prepare your financial model (ideally, when available, built on previously audited financial statements and GAAP or IFRS-compliant templates, complete and transparent, which we can provide as part of In3’s service offering) with cashflow projections as evidence that you can reliably service new debt with on-time payments and/or deliver returns for equity partners.  Where do you make the most money — not just revenue, but the most significant margin contribution?

Quick Comparison — Venture Capital and Project Finance

Venture Capital looks at the projected annual income statement and net operating margins (the percentage of earnings that are retained after all expenses, which is tied to the tax venue), as well as for an exit strategy and/or dividends (or similar forms of gainsharing), while by contrast …

Project Capital looks at the Internal Rate of Return (IRR, usually unlevered as it is less subjective) an indicator of capital efficiency, not just profitability/cashflows.  (More “terminology demystified”)

On the debt side, to qualify for most loans (hint: not required for our flagship project funding program, CAP), there are usually bankability ratios to consider here such as “cash available for debt service” (CADS), debt service cover ratio (DSCR), and equity/debt leverage, among several others.  More on the In3 Completion Assurance (guarantee) Program, which offers a “one stop shop” of both debt and equity from one source for up to 100% project finance:

If this seems too much to absorb, you may want to hire a consultant.

5. How do you identify, manage and mitigate risk?

Senior lenders, especially institutional ones like pension funds and banks, tend to be the most risk averse. How you assess, manage and document the project’s risk profile (no project on the planet is entirely without risk) says a lot about the viability of your proposal for funding, as well as investor/lender expectations for returns.  Failing to identify a palpable risk will backfire because it erodes trust and sends the underwriters on a fishing expedition, while proactively evaluating what can go wrong, and how such potential downsides will be handled, wins points for transparency, professionalism, maturity and courage.  Facing facts, even if there’s not much chance of a particular problem manifesting, is going to increase the odds of reaching closing.

When comparing multiple projects for investment with similar returns, the one that has the lowest perception of risk will win every time. The upside is relative to the potential downside, captured in the common phrase “risk-adjusted returns.”  Lack of preparation in this arena is effectively rushing to failure.

For example, some lenders in the Commercial Real Estate sector want to see a third party Feasibility Study, evidence from an unaffiliated body of knowledge that objectively evaluates and carefully explains why the project(s) will succeed in reaching the projected performance metrics — starting with revenue (sales per the business model, such as rental properties, tenant lease agreements, outright sale of individual units or an “exit” in aggregate) but accounting for the cost of engineering/design, procurement, construction, commissioning and at least initial operations, if not O&M (operations and maintenance).  This feasibility study is not available in every market — for example, parts of Latin America do not use comparables (“comps”), and some lenders rely more on historical occupancy, macroeconomic trends, inventory (if there’s an established appetite for the local market to absorb what gets built) going  market rates in the region, and other factors.

Related to comps is understanding the competition, which offers important additional benchmarks, and in some markets can represent a threat to manifesting the project’s financial plan.  Most sectors these days there is a lot of room for projects from other developer/owner teams, but it is still helpful data to know who else is active in the same market or geographic region. Market share is more associated with venture capital, as projects typically do not attempt to erect barriers to entry by competitors.

Another important risk factor, though really just an indicator of developer commitment, is total funds invested in the project’s business plan to date.  This isn’t a maker/breaker for CAP funding, but most senior lenders will ask how much cash is “in” so far.  Sweat equity is another matter — cash at stake constitutes “skin in the game” and means the developer will not back off no matter what.

All capital providers use their own unique combination of indicators, but all care about risk. In3’s job is to know what our various lenders need to know and how they need to know it.

6. What kind of collateral can you offer?

For senior debt only, know what collateral is available that can be pledged (via perfecting a lien against it) and what is its value. Examples might be real estate (land), equipment, buildings and motor vehicles.  All collateral usually receives a discount of at least 20%.

Note that our CAP funding program‘s debt is closest to mezzanine, not Senior Debt, and thus we do not require a pledge of the project’s operating assets as collateral.  They would appear on the owner’s balance sheet as unencumbered by a lien from our side.

7. Are you willing to arrange a financial guarantee, risk insurance, or both?

Be prepared for lenders and some investors (including In3 Capital Partners) to request a completion assurance guarantee or loan guarantee when using a Special Purpose Vehicle (SPV) to ensure you and/or your company, or a more creditworthy “sponsor,” are tied to the loan.  For CAP funding, being “tied” means accountable for completing the project to reach Commercial Operation Date (COD). For loans, it means the owners have committed to not default on the loan.  Collateral is only used as a last recourse.

SPVs typically have limited or no recourse to the owners.  Further, for CAP funding, a Bank’s Guarantee (BG) / Standby Letter of Credit (SBLC) or Sovereign Guarantee (SG) or bank-endorsed Avalized Promissory Note (AvPN), among others, can be used to secure better financing terms.

This use of a financial guarantee is not new.  Institutional lenders have required them for decades as a “loan guarantee”.  The difference with our approach is that loan guarantees continue until the loan is fully repaid, but with In3’s CAP funding, we use them as a form of project completion assurance — in place just until the project is built and commissioned to begin commercial operations.

More about Financial Guarantees | Guarantee Fundamentals FAQ (4-page PDF)

More about de-risking & “credit enhancement” — why financial guarantees matter

Advantages of using Financial Guarantees (sovereign or bank) and “how to” basics

Indicative Terms for our CAP Funding (request password) | Compare with Non-Guaranteed Project Funding

KnowledgeBase (Library) of tools and resources

8. Components of an Investible Project Package

There are five major components to an effective project finance package:

1. Statement of purpose / project information summary
2. Business plan — see below. Captures the main elements of the business case and shows reasonable risk/reward.  The business case is based on the quality of the financial projections (next item), which are in turn built on credible, transparent assumptions.
3. Financial projections (pro forma financial statements, namely income statement, balance sheet, and cashflow statement). If financial model is not compliant with US GAAP or IFRS standards, then it must be at least complete and largely defensible.
4. Project Description – this section covers the project site(s), status, industry/market, technology partners (if any), feasibility studies or similar data on the supply and offtake arrangements, customer profiles/contracts, vendors/contractors, social and/or environmental impacts, key success factors, performance measures, risk analysis.
5. Developer profile — management experience, successful projects completed to date, track record, references, resume and/or CVs.

Each of these areas are further described below.  CAP funding requirements are here.  Get started using our onboarding system to apply for funds here.

Typical sequence for preparing the above package:

1. Excel financial projections (also called a financial model) — used to determine if there is a feasible business, showing all assumptions are transparent and reasonable, revenue based on market facts and costs based on fair market estimates.
2. Project business plan — use the results of the financial modeling to create a business plan that summarizes the business case and adds the narrative of what (defines the core business), why (purpose or mission, including how impacts will be measured), where (site security is important to project finance), who (bios of key team members, including key vendors and others), when (implementation timeline), how (strategic considerations, and what technology will be deployed), and how much (a clear sources and uses statement).
3. Executive Summary and other short encapsulations — a teaser, PowerPoint presentation, at-a-glance deal sheet, etc.
4. All other relevant support materials — items not included in the above, such as site description, key permits, licenses, articles of incorporation, developer profile (resumes or CVs), key supply agreements, offtake agreements, key vendors, market analysis, risk analysis, critical success factors, how you will measure social/environmental impacts … whatever is needed to complete investor due diligence.

Project business plans are not an exact science. A good package will tell a compelling story (especially if approaching impact investors) and answer most questions a lender or equity investor may have about your business and the loan requested. It will provide enough information and documentation so that your request is clearly understood and that your capital source can discuss and defend it to its investment/loan committee.

Some smaller firms, such as larger angel investors of family offices, do not have such committees; their decision is based more on the merits of the project and the “warmth” of the introduction you receive (where “Know Your Customer” or KYC are first and foremost before the deal merits get the time of day). The better sources of capital are nearly impossible to reach if you do not know an insider who can bring in your deal.

8.1 Statement of Purpose / Project Information Summary

Include a Project Summary that addresses:

• Amount — US$ or Euro total budget
• Purpose
• Duration
• Repayment
• Available collateral
• Brief description of the business and positive outcomes as a result of the financing, including measures and targets

8.2 Business Plan

A business plan is the most critical component in your narrative. It should include:

• Business description and vision
• Market definition and analysis
• Description of products and services
• Brief overview of the organization and management
• Construction schedule
• Amount of capital that you’re investing (“unexpended” funds) and/or accomplishments to date
• Site details, permits, licenses, feasibility studies, contractors, CVs or resumes, industry track record, articles of incorporation (include as many Annexes as necessary)

8.3 Financial Statements

8.3.1 Cash Flow Statement

A cash flow statement tracks incoming and outgoing cash each month and is used to project future needs. It’s used to determine the amount of cash your business will have on hand at any point in time.

A package should include a current, twelve-month statement (when available); with monthly, quarterly or annual projections for the life of the loan. The projections should be realistic and supported.

8.3.2 Projected Income Statement

The income statement is a measure of how your business has performed over a specific period of time, usually annual for the number of years of financing (or the life of the project). It measures all income less all expenses and determines the amount of profit or loss generated by the business for the period. Include income statements for the last three years, if available.

8.3.3 Projected Balance Sheet

The balance sheet represents the basic accounting equation:

       assets – liabilities = net worth

It’s a snap-shot of business financial capacity at a specific point in time.

For new businesses – the package should include a balance sheet as of your planned opening date, and another set, projected for 3-25 years after your opening date, depending on the life of the loan or other financing.
For existing businesses – include balance sheets for the last three years, if available.

8.4 Project Description

Topics include, but are not limited to

• Project site(s) description, GPS coordinates, photos and maps, and status (how far along toward securing the land, either purchased or leased, with available contracts or offers/MOUs)
• Summarized industry knowledge, growth or consolidation projections, current market conditions
• Any technology used and track record of the supplier (size of their installed based, number of years in commercial use at scale, maintenance history, etc)
• Any strategic partners — describe role and profile
• Sales or “offtake” arrangements, with evidence of agreed-upon contracts or agreeable contractual arrangements (contracts negotiated but not yet signed), customer profiles and sample contracts
• Key vendors such as EPC firms (or short list), builders (name/profile of General Contractor, or if to self-perform, be sure to emphasize that experience in your profiles, described below in Section 7.5)
• Social and/or environmental impacts, including standards and methods for tracking results, key success factors, performance measures and reporting
• Feasibility studies or similar data on the market, revenue model, offtake and supply side, how that is secured over time (optional)
• Risk analysis and mitigation
• Implementation plan and timeline (to show cash flow requirements and in-depth understanding of how you will manage the project through the various phases of pre-development, construction, commissioning and operations).

8.5 Developer Profile

A collection of CVs and resumes do not tell the story, but are a good place to start.  Investors and lenders need basic Know Your Customer (KYC) information, plus a detailed understanding of management’s sector experience, successful projects completed to date, instructive failures, track record in the eyes of customers, personal and professional references, online media presence, and “what makes you tick” as this explains the project’s stated purpose, item 7.1, above.

Roles and functions to be performed (or yet to-be-hired) are more important than titles.  Who does what?  What are their qualifications?  What proficiencies, skills, expertise or other exceptional talents are at the table?

9. Loan Packaging Tips

To align with the investor/lender’s expectations, learn as much as you can about their criteria and their true requirements (often not disclosed because they’re hard to articulate or to avoid being “played to”).  Sometimes the “soft stuff” (hidden expectations due to culture, values, priorities…) is the harder stuff to get right.

But the following generalizations seem to apply across all investor/lender styles, preferences, and unstated “rules of the game”:

• As much as possible, be brief, to the point, and format for readability.  Make it easy to scan and read quickly through tabular data, columns and rows, providing a topic index such as a hyperlinked table of contents.  Do not describe in words what an image can convey more elegantly.
• Emphasize the management strength of the business – your team has the skills, experience, drive (commitment) and expertise to be successful.  Highlight that you have substantial “skin in the game.”
• Add projections with realistic probabilities and substantiated assumptions. If you plan to go from zero to huge gains in an accelerated manner, take time to explain how that is even possible, then how it is likely and achievable.  Bring persuasive evidence that borders on solid proof.
• Bottom line – lenders want to feel they’ll get their money back (plus whatever margin) in the agreed upon time.

10. Lender/Investor Review

How is an application evaluated and (when there is a scoring system) scored? We use RAIN for initial assessments and to put forward metrics to benchmark against the ideal (complete bankability). Your RAIN scores across three dimensions are merely a conversation starter.  Each layer or dimension — financial fundamentals, fundraising situation (team experience, status of business plan, etc.) and risk profile — indicate the probability of securing funding without additional preparation.

When seeking a bank loan, you must demonstrate to the lender/investor that you are entirely creditworthy.  This often leads to a frustrating paradox: If you actually did not need the money, then it would be available?  Fortunately, complete bankability isn’t usually the goal, … the cost/benefit of bank financing decreases its value — a variation on the law of diminishing returns.  But honing your file (the various documents in the package or proposal for funding) will deliver the benefits of private funding when those documents can be monetized, making the project investible, but not necessarily bankable.

Let your documentation speak for itself; do not make unsubstantiated claims or even mention the upside until first establishing a solid baseline, offering KYC credentials and the short version or headline of your company’s qualifications.  This shows that your business proposal is of reasonable risk. As you move through the process, from vetting to due diligence to terms, lenders and investors will be evaluating:

• Character – institutional investors will check on your financial status and personal credit history, including your previous loan payment record. Credit enhancement in the form of loan guarantees can compensate for most perceived inadequacies.  That’s not how In3 works, however, as our interest is more about your agility, resilience (problem-solving intelligence), perseverance and integrity.
• Experience in the type of business and country where the business operates, including your level of responsibility, education and business management training.
• Capacity – sufficient cash flow to repay the loan (financial model must show this with transparent assumptions).
• Collateral – is there sufficient collateral to cover any default scenarios? The pre-COD and operation phases may require different collateral than once the project is operational.  Remember that most collateral liens are discounted by at least 20% from the fair market value.  Sovereign Guarantees receive a similar “haircut” (but CAP funding makes up for the gap), while some banks will accept partial asset value for a Standby Letter of Credit (SBLC), issued as a Bank Guarantee, depending on the bank, project risks and other circumstances such as how long you have been a customer.  Ask them.
• Financial awareness – can you demonstrate your overall business acumen?  Presentation skills help create the perception that you know what you are doing, but don’t stretch beyond your knowledge and experience … better to say “I’ll have to ask our CFO” or “let me look into that and get back to you” than overreach.

11.  Decide on your Fundraising Strategy then test the waters

We developed the Completion Assurance Program (CAP funding) to make fundraising strategy a no-brainer.  If you can qualify, the advantages far outweigh the effort or preliminary investment of time to orient and learn how it works.  That said, CAP funding does not fit every situation.  It is only project finance (not venture capital or the other types of funding like trade transactions, buyouts, etc.) above $25 million total funding, with a completion assurance guarantee — Sovereign (SG), Bank (Standby Letter of Credit or Bank Guarantee) or private Company (Commercial Promissory Note) from either the developer or a sponsoring stakeholder.  Ask your In3 Affiliate to assist with making this all-important decision.

DO NOT GIVE UP TOO SOON.  Why?  If you choose not to use CAP, it will be more difficult to qualify and reach closing because due diligence is much more detailed.  Without CAP, project teams must be …

1. Seeking “alternative” (see #9, below), middle-market finance:  We can also originate limited-recourse, term loans and equity investments typically in the range of $3 million into the US$ billions range:
   • Term loans for at least 3 years (though other structures are available) with loan tenors up to 15-20 years.  Loan grace periods of up to 24 months during construction period.  Most loans are non-recourse or limited recourse and involve a Special Purpose Vehicle, and most lenders do not charge a penalty for early loan repayment.
   • Equity investments for qualified projects — usually for those that are reasonably well prepared to deliver social and/or environmental benefits.  Typical unlevered IRR must be at least 6-10% in sectors like solar, wind, hydro, but more like 12-20% unlevered for biomass; expected IRRs depend on the industry and other factors.
2. A small or medium-sized enterprise (SME) or individual:  US definition of an SME is a maximum of $400 million in annual revenue, or if an individual, maximum net worth of $100 million.  This is only a requirement for multilateral finance institution support (World Bank Group, US DFC and/or regional development banks), but not an issue for CAP.  See the next point.
3. Working in one of these qualified countries:  Most angels, impact and family office investors are “boutique” in that they’re aligned with or focused on certain geographic regions/countries or sectors.  If working outside the US, ask us about your host country’s eligibility for financing as this list changes periodically.
   Note:  ideally, there would be a guarantee offered as a form of credit enhancement during the life of the loan.  CAP funding’s guarantee is only required during construction, until Commercial Operation Date.  NOTE:  In3 is certified by Moody’s Analytics, originally for the OPIC loan program (now merged with USAID to form DFC; more), and we can, under a management services contract, arrange financing via DFC or more flexible providers in our network, depending on the industry and project’s readiness status.  The challenge with DFC is that they usually take at least 6-9 months to reach closing, and it is fraught with arcane requirements. To qualify, either a U.S. citizen, equity or debt investor/sponsor must own at least 25% of the project, for example; otherwise, there must be other, significant US involvement (more).  In3 Capital’s program for clean energy and renewables financing nor In3 Completion Assurance Program (CAP) do not have these same US ownership requirements.  We can reach closing in just 30 days.
4. Able to assume a share of the risks:  Without CAP funding, single-source loans are available in most industries and markets for up to 75-90% of the project budget for expansions*, and typically less (65-75%) for new or “greenfield” projects.  This means at least 10-35% of a project’s costs must come from one or more equity investors (as cash equity, sub-debt, grants or in-kind) to obtain the enabling loan, or the lender may ask for a controlling equity interest, which is usually not an option for most of our clients.  CAP funding does not require a pledge of equity, but instead uses a Completion Assurance Guarantee during construction as collateral.  More:  what equity/assets qualify?
   (* Formal definition of “expansion” is 3 or more years operating history.  Renovations, retrofits, and refurbishments — such as for energy efficiency — also quality as expansion loans.)
5. Experienced:  Most successful teams have a track record of success for at least 3 years in the relevant field.  How many projects has your team previously completed?  CAP funding is uniquely suited to encompass a wider range of experience, sometimes in collaboration with In3’s personnel, if we can make a difference in this regard.
6. Using proven technology:  Typically there is no remaining technology risk – products or services are proven to work reliably for the duration of the loan on a commercial scale.  Innovation is usually in the business model, geographic focus, delivery, packaging, branding or integration.  If there are still technology or commercial risks, ask us for an evaluation.
7. Focused on positive social, environmental and/or economic benefits:  Projects are usually a source of positive social and/or environmental impact, in addition to making money and creating jobs.  This is often called an “impact investment” or “investing for the triple bottom line” or sustainability.  There are as many ways of building these developmental benefits into business plans as there are companies.  What are your business impacts?
8. Willing and able to receive assistance from In3 (coaching, advisory and investor introduction services):  Our fees for one-time loan origination, business development and due diligence costs vary from 0.5% – 3% of the loan amount, making this type of non-dilutive financing very competitive in the current economy.  US Treasury rates currently hover around 1.25% for 5 years, 2.25% for 10 years, making total APR in the range of 3%-5.75% APR when risks are largely mitigated.
9. Interested in non-traditional or “alternative” finance (neither a commercial bank nor via an IPO):  If a commercial bank has said “no” or cannot offer reasonable loan terms, and the above conditions are met or within reach, we can still probably help.  CAP funding is preferred, but we have arranged both fixed-interest and variable rate loans, based on SONIA plus a 2.5% fixed “spread”, where the spread does not vary depending on risks or the length of the loan. Normally, mitigating any remaining risks can help to lower interest rates, but not so with CAP.  Alternative lenders can provide up to 100% debt (“full leverage”) at higher rates of interest, depending on the size of the security deposit and how long the developer is willing to wait for loan approval and funds.

Our job is to help with securing your capital, faster, and at the least cost, as specialists in commercial project finance for over 20 years.  Under management services contracts we can also assist with strategy, partnerships, and other tools (such as risk insurance, Completion Assurance guarantees or credit enhancements) to reduce or eliminate the perceived risks in order to help project companies get their financing reliably, quickly and affordably.  Working with In3 Capital Partners CAP can result in first funding in as little as 45-60 days.

In3 Group collaborates with project companies to ensure the lowest possible risk premium (the loan’s annual interest rate) and keep the lowest overall cost of capital as reasonable as possible, while at the same time greatly increasing the odds of success.  More at Services.

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