- What We Do
- Sector Focus & Industry Experience
- Project Finance
- Impact Capital
- Where We Work
Does your situation qualify?
For project-related funding from In3 Group partners and affiliates, our investors look for
- Financially and commercially-sound project producing adequate cash flow and unlevered IRR (varies by industry)
- Sufficient equity investment from your team or others (see point #4, below)
- Track record of success in the same or similar industry (see 5)
- Proven technology (see 6)
- A solid business plan — narrative and financials (development assistance available)
To qualify, the project team must be …
- Seeking “alternative” (see #9, below), middle-market finance: We originate limited-recourse, term loans and equity investment in the range of $1 million – $900 million, typically 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. Typically there is no penalty for early loan repayment. Equity investments of $10 million – $250 million for qualified projects — usually those that are reasonably well prepared to deliver social and/or environmental benefits. Typical IRR is at least 12-15% in sectors like solar, wind, hydro, but more like 20% levered for biomass; expected IRRs depend on the industry and other factors.
- A small or medium-sized enterprise (SME) or individual: US definition of an SME was recently increased to 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 Overseas Private Investment Corp and regional development banks).
- Working in one of these qualified countries: Most angels, impact and family office investors are “boutique” in that they’re aligned with certain geographic regions or countries. If working outside the US, ask us about your host country’s eligibility for financing as this list changes periodically.
Note: the In3’s OPIC loan program can provide financing for overseas investments that are wholly owned by U.S. companies, investors or sponsors, or, at a minimum, have an ownership interest of at least 25 percent. To qualify, either a U.S. citizen, equity or debt investor/sponsor must own at least 25% of the project; otherwise, there must be other, significant US involvement ( more ). In3 Capital’s program for clean energy and renewables financing does not have this same US ownership requirement.
- Able to assume a share of the risks: Single-source loans are available for up to 75-90% of the project budget for expansions*, and usually 65-75% for new or “greenfield” projects. This means at least 25% 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. 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.)
- 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 completing?
- 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.
- 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?
- 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.
- 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 probably help. We have arranged both fixed-interest and variable rate loans, based on short-term LIBOR or US treasury rates – plus a nominal “spread” in the range of 2%-4.5% APR additional, depending on risks. Mitigating any remaining risks can further lower interest rates.
Our job is to help with securing your loan, faster, and at the least cost, as specialists in commercial project finance for nearly 20 years. We can also assist with strategy, partnerships, and other tools (such as risk insurance, loan guarantees or credit enhancements) to reduce or eliminate the perceived risks in order to help project companies get their financing reliably and affordably.
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.
Our network has a 98% loan approval rate from development finance institutions, and can help clients obtain loans in roughly one third less time than going it alone, making our fees quite modest compared to the value delivered.
- Highlights of 2017 “Climate Reckoning” at Harvard University
- Workshop: Social & Environmental Aspects of Fundraising at “Climate Reckoning” Conference (Harvard)
- Water, Soil, Heat and Carbon — the shift hits the fan
- Impact Investing reaching mainstream acceptance — will it outpace financial-only returns?
- Panel Discussion: food, water and climate change mitigation