Simple Steps to CAP funding

The following streamlined steps assume your project(s) satisfy In3CAP’s four cornerstones — basically, projects or portfolios in our focus areas that requires $25 million or more in new money, at any reasonable stage of readiness for funding, and based in a country where we work (almost anywhere — In3CAP has global reach). CAP funding offers 100% funding with minority equity carried interest at these indicative terms and conditions. See 1-page Tear Sheet (PDF).

START HERE: Take these steps in the sequence shown.

1. Start by quickly assessing if you have or can access non-cash assets or a strong balance sheet, or know someone who does, to obtain a CAP guarantee as security. If so, jump to Step 3.
   Note: If working in a country that can issue a Sovereign Guarantee, go here.
2. Consider using a cash deposit. This option leverages minimum ~25-33% of the total required funding and eliminates the need for a bank-involved guarantee. Either a partial bank-involved guarantee as security or the cash deposit option can qualify for 100% CAP funding’s flexible and affordable terms. 
   CHECKPOINT: If neither assets nor cash, then talk with your In3 Affiliate or other advisor(s) about involving a sponsor or lender to show sufficient “skin-in-the-game” to secure In3CAP funding. Otherwise, CAP funding may not be right for you.
   Related articles: What makes CAP funding different? | Tips for sourcing a CAP guarantee
3. Contact a commercial bank to obtain a Standby Letter of Credit (SbLC) using the assets as collateral. Ideal SbLC face value is 50-75% of the total funding you require.
   Start with a banker that knows you (private bankers tend to be most familiar with SbLCs used as security for project funding) or a sponsor’s banker.
   • Email the issuing banker In3’s SbLC verbiage template and apply for it to be issued, first as a “specimen” (sample), but later to be delivered via SWIFT.
   • Ask the banker to put the SbLC into their bank’s own format (such as on bank letterhead), but request they use the provided template to the maximum extent possible.
   • ACTION: Once received, send the bank’s specimen SbLC document to In3 or your registered Affiliate for approval. Once approved, go on the next step. NOTE: If the verbiage is not accepted, obtain the issuing banker’s Ready Willing and Able (RWA) letter to formally request any changes.
4. Propose a monthly draw schedule based on the SBLC or cash deposit coverage. See sample at … the more leverage used, the longer it typically takes to access all the funds. To arrange for faster draws, increase either the SbLC coverage or size of the cash deposit.
   Move to the next steps once either the SbLC or cash deposit and monthly draw schedules are approved.
5. Request an Authorization to Verify (ATV) letter from the cash or collateral account holder, where this person or company is known to the involved banker. The account is at that same bank branch.
   Note: the bank does not need to issue or sign this ATV letter. Just the account holder would, who is simply giving us permission to verify the RWA letter, as well as coordinate the mechanism including the path of SWIFT delivery etc. This is our standard process and allows the bank of the counter-party to communicate with us.
6. Once we receive a verification reply (via Email), provide all documents and disclosures for our Due Diligence. If all goes well during Due diligence, the funder issues either a term sheet or enter directly into preparation of the investment agreement with respective legal counsel. Sign and notarize the investment agreement and notify the involved bank.
   ACTION: The issuing bank sends the SbLC (SWIFT MT-799 then MT-760 followed by hardcopy) or cash deposit via wire transfer or EFT. This constitutes financial closing.
   • Funds begin monthly transfers per Step 4’s draw schedule into the project’s SPV bank account (unless otherwise arranged).
   • Cash deposit is released on final draw or SbLC is allowed to expire following completion — marked by Commercial Operation Date (COD).
   • Project begins operations and generating cash flows.

Be sure to register your project(s) by or before Step 6.
Got questions? Contact your In3 Affiliate or In3 directly.