Description

In3 Completion Assurance Program™ (CAP) Funding

Does your project satisfy all four CAP funding cornerstones?

Any reasonably well-defined, mid-market project can fit with our partner’s conditions for accelerated financing. (Related article on why guarantees make a difference and bring advantages.) We define “fit” as any project, or portfolio(s) of projects, that satisfies our 4 S’s:

1. SIZE:  $25 million or more per project; if less than $25m, consider building a “pipeline” or portfolio of multiple, related projects under one finance facility.  Upper limit is in US$ billions.
   NOTE:  Temporarily, with cash deposit only, we can go as low as $14m funding, if a $5m deposit (35%) can be arranged. We reserve the right to raise this minimum threshold at any point in the future.  Deals in motion will remain qualified.
2. SECTOR or SPACE:  We prefer projects that deliver positive impacts, but note that we can support almost any project that (at minimum) does no cause or perpetuate social or environmental harm – more than 30 industries in our sweet spot where we can often add value beyond just funding.
3. STAGE:  Any stage of readiness, beyond just an idea – does not need to be “shovel-ready” … fine if additional pre-construction development work is needed, once you can show that your project is financially feasible (see Success Tips)
   Can provide 100%, full leverage funding, mostly often for new construction, expansions, and retrofits.  You need to know that your project is financially feasible.  If your project plan is still fairly early in planning or project development?  We may be able to assist with further development work, if needed; ask for details.
4. SECURITY:  Investment capital can be secured almost anywhere as minority equity, no debt, using a financial guarantee or cash deposit as completion assurance.  Most widely used guarantee is a Standby Letter of Credit (SbLC), or a Sovereign Guarantee confirmed by a bank, or via a “sponsor”, used to screen out fraud and ensure the project or portfolio reaches commercial operation. Tips
   Notes:
   1. Instead of a bank-involved guarantee, cash deposits can be as little as 25%-35% of total required funding.  To obtain faster draws and better terms (retain more owner equity), see if it is possible to bring forward cash of 30-33% or more.  Compare cash to SBLC
   2. First monthly draw 30-45 days after closing.
   3. If cash deposit is used, it is held in a segregated account, untouched, until the final draw of funding (100% of what is arranged under contract) then released in lump sum.
   4. Neither the guarantee nor the cash would be needed, once verified, until the project’s funding contract has been negotiated, signed and notarized.
   5. While interest rates remain high, CAP funding is equity (carried interest) only — no loan nor interest costs — but still for up to 100% funding. Why we don’t charge interest for CAP funding

If all four cornerstones fit … here’s how to get started

You may proceed to pre-qualify for our funding via our streamlined set of basic facts, aimed at gaining a binding offer in the least possible time.
This normally means you would start with obtaining a “specimen” (sample language) of the proposed guarantee that will be used a completion security.  For most of our clients, simply download In3’s SbLC template (in MS Word here), and either you or your sponsor contact the banker that will eventually issue this guarantee on your project’s behalf.  With their conditional agreement to later send this instrument, ask them to fill in the bank name, location, face value amount and any necessary format changes (ideally on the bank’s letterhead) so we can confirm that the proposed wording is acceptable.

What’s in it for the project developer/owner?  Such guarantees streamline due diligence, ensures continuity and certainty of project acceptance (once pre-approved using our 3-stage process), improve investment terms and expedite closings, simply by acting as a source of “security” that the project will be successfully completed and commissioned to begin commercial operations.  When that does not occur as planned, the parties work it out.

What types of security can be used?  So far in 2024 we prefer a Standby Letter of Credit (SbLC), or Sovereign Guarantee (SG) with bank confirmation, or cash deposit. Other instrument types are also potentially acceptable, but minimum face value must be at or above $18 million per instrument, or … minimum 25% cash deposit, described below.

What are the next steps after approval of the security?  Once the project sector, budget, type and location are approved, then we ask that you provide project basics (up to 3 or 4 documents can be uploaded) using our tracking system.  We will confirm receipt of your registration within a few days.

To enter formal due diligence, leading to an offer of binding terms (if all goes well), we want to discover and verify what we call your “Six Essentials“.  Once accepted, we usually offer binding terms within just a few weeks with zero initial cost.  Proceed to our Proposal Builder where you will find all the tools and templates you will need to put together a winning proposal.

If a guarantee is not within reach …

The last Cornerstone, Security, opens attractive, non-recourse funding for projects that otherwise qualify ($25m+ and other “S” cornerstones), please do not give up on securing a guarantee without a fight. It is the only option for 100% funding without at least some initial cash.

If you or your immediate circle of co-founders, family and friends do not happen to have sufficient financial depth, consider a “sponsor” that might be part of the project construction team or unaffiliated third party.  Proper explanation of how the guarantee would be used and why it is needed is key to gaining their support, as is offering them a financial incentive such as a minority equity interest.

When discussing this with potential sponsors, don’t accept the first “no” and just give up.  Be sure to approach the guarantee as an experiment in order to become better informed, learning how to best present this opportunity, starting with what’s in it for them to play this role.

If you need this Done For You (DFY), please consider our enhanced service options, described here.

New clients often have questions about this Security, as such guarantees are often misunderstood. They are quite different from trade finance-related guarantees, for example, as they’re mainly used to offset project non-completion and eliminate fraud.  They’re also unlike loan guarantees in that they are released (expire and are no longer used) once the project reaches Commercial Operation Date (COD).

Worth noting, financial guarantees can often be provided through counterparties, such as an involved OEM (major equipment supplier/integrator, with enhanced compensation), or a well-established EPC firm or General Contractor hired to build the project’s assets.  Tips on how to obtain a Completion Assurance Guarantee, how we define a guarantee “sponsor” (backer), or how to gain an Financial Guarantee sponsor.

For developers who wish to bring in such sponsorship, ask us for a set of slides you can add to your project’s pitch deck, including sample contractual language defining the sponsor’s role and benefits.  This helps assist with proposing and explaining a capital/completion guarantee to firms you are interviewing for handling key functions like project engineering, hardware procurement, and/or construction.

If your project hits these four cornerstones, it probably qualifies for favorable and generous terms with streamlined due diligence and much faster and more reliable closings (typically 30 days or less).

Radically Improve Funding Certainty

With this speed and greater risk tolerance comes increased certainty.  Why bother chasing other funding sources when anything can happen to throw the deal off the rails?  Doesn’t it make sense to first explore this CAP option to its logical conclusion?

With dozens of testimonials from private developers, In3 Capital Partners CAP funding is often the most reliable, affordable and expedient source of mid-market project financing, with far faster-than-average due diligence.  Our funding is available for diverse, qualifying projects worldwide (very few exceptions) when either a partial Standby LC (SbLC), Bank’s Guarantee (BG), Sovereign Guarantee (SG), or cash deposit can be obtained.

Not sure how to get that done?  Start with this Success Tip, then Deciding which type of Financial Guarantee to use, then download templates via our Proposal Builder or see this complete Stepwise Guide.
Complete Instructions (download PDF)

Be in touch with any preliminary questions.

Visit our New Client orientation or, if seeking advisory services instead, see related products below.

In general, In3 does not currently offer sponsorships for client project funding through CAP at no cost.  When such sponsorship is needed, the project developer and/or promoter can use In3’s tools and templates to confidently present their project to potential sponsors, or In3 registered Affiliates may be able to help.  Either way, In3’s premium services would need to be arranged under a management services agreement (MSA).  More 

We are working diligently to add third party “impact guarantor” sponsors for targeted sectors and geographic locations — such as waste-to-value, solar and real estate projects in the US — but for now, please register once you are prepared and let us know you are seeking sponsorship.

In a hurry?  Developers are encouraged to seek suitable CAP funding sponsors on their own; In3 Capital or our Affiliates can assist on a case-by-case basis to help accelerate (feature your project’s sponsorship opportunity) via a retainer or fixed-fee contract to serve in this role.  Be sure to mention this in approaching In3 as we will otherwise give priority to projects that already have already facilitated a qualifying guarantee.   

If you wish to pursue, but have questions, please review our Success Tips and FAQs articles, then (if not addressed there) Contact Us | Check out All Services  |  Key CAP Resource Articles