Mid-Market Project Financing — “Completion Assurance” Program gets a new name
Based on partner feedback, we changed In3’s flagship funding program name on 21 March 2022 from “Capital Guarantee” program to “Completion Assurance” Program™ or CAP. Some asked “What is a capital guarantee?” Turns out, that phrase is more investor-favored than we intended, because CAP does not shield our family office from all potential loses, just the portion of risk due to project non-completion, hence CAP is a better name.
The original name captured our unique structure, within the category of financial guarantees, but In3’s flagship funding named “Completion Assurance” Program (CAP funding or CAP financing for short) is both more precise and less likely to be confused with other types of non-completion risk mitigation. “Completion Assurance” accurately describes the purpose of the program — which is to align the parties on project completion once all the funding has been delivered. In addition, it is less confusingly similar to the more common “Completion Guarantee,” which is typically a bond or insurance.
Assurance instruments like Bank Guarantees, Standby LCs, Demand Guarantees, or even bank Avals on Promissory Notes, are not insurance, but give investors confidence while improving both the certainty of closing and funding terms for project owners. In3’s use of a Completion Assurance guarantee sets it apart from any insurance product coverage that developers or sponsors sometimes purchase (such insurance policies do not directly involve a bank, but are often useful to mitigate hazards with service providers such as EPC firms or general contractors not performing or otherwise doing their part to guarantee completion), but unlike insurance, CAP instead uses a financial instrument to enable otherwise unbankable project developers access to our advantageous funding. In3 CAP is “faster, easier, and offers better terms & conditions (T’s & C’s), focusing the various stakeholders on reliably reaching project completion and commissioning, that is, reaching Commercial Operation Date (COD).
The difference here is that, instead of a loan guarantee that guarantees loan repayment, a Completion Assurance guarantee is allowed to expire and is removed or returned once the project reaches COD. We do not expect such “credit enhancement” or even necessarily a lien against operating project assets, nor a controlling interest, even with 100% financing.
More about such Completion Assurance guarantees and deciding which type best suits your situation.
In3 CAP funding Frequently Asked Questions
Getting started as a new client: in3finance.com/newclients
