Dear Project Developer,
Here is a synopsis of In3’s differentiated offer to fund middle-market projects or portfolios totaling $25 million or more ($50m+ preferred), located almost anywhere, in any sector at any stage of readiness:
In3’s flagship Investment Program is based on the ability of the Project Developer/Sponsor to facilitate a financial completion guarantee used as completion assurance (and to screen out fraud, etc.) in favor of our in-house capital partner, a private, US-based family office. In turn, our partner covers the costs of any remaining development work as well as building and commissioning your Project without up-front fees or the need for control. Generally, once the Project reaches commercial operation date (just before beginning to generate revenue), the guarantee goes away – it is allowed to expire.
In essence, our capital partner will fund up to 100% of project costs at any reasonable project development stage, but will not accept the majority of project completion risk. See In3’s 1-page CAP Funding “teaser”.
We finance projects at these advantageous terms:
- Speed – we complete our due diligence and offer binding terms to reliably reach financial closing within 30 days. First draw of funding within 30-45 days.
- Completion surety protects both parties’ interests, and can be helpful with holding contractors and subcontractors accountable for their performance.
- Flexible and competitive project financing terms:
- CAP funding can be used to cover costs of any remaining Project Development ahead of construction – projects do not not need to be entirely shovel-ready
- Up to 100% of required funding without having to give up control. Investor seeks minority financial carried interest with adequate guarantee, and non-voting board seat.
- Able to finance using a hybrid of mezzanine project debt and minority equity stake
- Attractive interest rate: ~7% APR (based on SONIA + 2.5%) with long loan tenors available – up to 25 years – where developer can defer principal payments (interest only) for up to 3 or 4 years
- Project “capital stack” does not include senior debt or encumber Project assets with a lien. With projects above $50m, there is room for a senior lender to preserve more owner equity.
- Investor requires financial (completion) guarantee to be in US$ or Euro’s, however project funding can be in a different currency and will not require FX risk coverage
- Operational/performance, developer execution and credit risk taken on by the investor.
- Minority carried interest is determined upon completion of due diligence, calculated based on:
- Difference between the amount of guarantee and total Project funding, if any
- Guarantee-issuing bank Credit Ratings and quality of guarantee instrument
- Project overall (unlevered) IRR.
This structure significantly reduces the traditional administrative complexity, uncertainty and due diligence costs (and associated delays in reaching closing) that are common in most project finance.
How We Work
Most wisely-used guarantee type is a Bank Guarantee or Standby Letter of Credit (BG/SbLC), though we can also accept an endorsed Commercial Promissory Note with a bank’s aval (AvPN), or a Sovereign Guarantee from the Ministry of Finance in countries that can issue them. Guide to help decide which type of financial guarantee delivers the most advantages for your situation here.
Learn more about how financial guarantees like a BG/SbLC or other types that use well-established “demand guarantee” rules (called URDG) deliver advantages for your project: In3 Capital Roadmap to Success
Article that explains what problems we solve: Four notorious problems of mid-market project finance that CAP solves.
How to secure this funding
Our complete stepwise procedure here to pre-qualify. See below for a summary version
- Developer proposes a project (or portfolio of projects) for funding, with the first 4 of 6 “Essentials” shown here
- We review the total required budget, uses of funds, proposed verbiage for the instrument and draw schedule, then the last two Essentials, a bank’s letter (all templates here), serving as their letter of intent and authorization to verify with the issuing banker that they are ready to proceed.
NOTE: If you need assistance with the guarantee, consider involving a “sponsor” or if able to meet In3’s criteria, consider hiring In3 to assist with this - We review the instrument’s verbiage, stated uses of funds and monthly draw schedule; once approved, we will request the rest of the package (including MS Excel financials).
- Formal due diligence typically takes 2-3 weeks, which if all goes well, puts a binding offer on the table for the loan plus an equity carried interest
- We review the total required budget, uses of funds, proposed verbiage for the instrument and draw schedule, then the last two Essentials, a bank’s letter (all templates here), serving as their letter of intent and authorization to verify with the issuing banker that they are ready to proceed.
- Financial closing happens quickly once contracts are signed and upon receipt of the hardcopy instrument at our bank
- Funding flows per draw schedule, and … project is completed, any guarantee(s) expire, with project beginning to generate cashflows.
Summary of the formal, technical, bank-oriented protocol in 3 stages (end-to-end logistics), 1-page PDF
Program Overview 1-page teaser (PDF), downloadable 2-page Qualification Guide or complete INSTRUCTIONS.
For a page to assist developers with attracting backers without engaging In3 as consultant share for guarantors
We have other project finance options available (summary and comparison), but none are as fast, accessible and flexible as CAP funding.
Please revert with any questions or when you are ready to take next steps.
Best,
In3 Customer Relations
info@in3capital.net
+1.831-761-0700 Ext 1
