Synopsis of In3’s Completion Assurance Program™ (CAP)

Dear Project Developer,

Here is a synopsis for 2025 of In3’s unique structure for funding middle-market projects or portfolios totaling $25 million or more ($50m+ preferred), with very few restrictions.  Projects can be located almost anywhere, in any sector, and at virtually any stage of readiness:

• In3’s flagship Investment Program is based on the ability of the Project Developer/Sponsor to facilitate a financial “Completion Assurance” Guarantee (CAG), or cash surety deposit, used mainly to screen out fraud.  In return, our private (family office) partner covers the costs of any remaining development work as well as costs of building and commissioning your project without up-front fees or the need for control.  Generally, once the Project reaches commercial operation date (just before starting to generate revenue), the guarantee goes away – it is allowed to expire.
• New cash option with just 25%-35% of total funding on a short-term basis (compare Cash Surety Deposit to widely used Standby Letter of Credit).  Though cash is not required — a CAG is usually backed by assets or a balance sheet, not cash — when cash is within reach, it affords the most leverage and the surety deposit is returned in lump sum upon the final draw of invested proceeds.  

Completion security protects both parties’ interests, and is similar to a completion bond or performance bond provided by contractors, but is also distinct as it is NOT an insurance product.

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.
• Flexible and competitive financial terms:
  • CAP funding can be used to cover costs of any remaining Project Development ahead of construction – projects do 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, and not a majority of the voting rights.
  • New for 2024:  Equity only.  Interest rates have become a problem for new construction projects — the interest expense can really add up, delaying operational profits (net cash flows) with higher APR loan amortization.  Thus, we can fund without any loan at all, where equity partnerships provide more flexible repayment terms.
    • Project “capital stack” does not include senior debt or encumber Project assets with a lien.  With projects above $50m, there is room for a senior lender to preserve more owner equity.  Know more
    • There is no longer any reason to use CAP debt, as the negotiated equity split would be unaffected.  CAP funding still offers below-average interest rates (far below typical construction loans), but why incur interest at all?  Equity only for the full financing is far better for our clients.
  • Guarantees must be in US$ or Euros (or GBP/£), however project funding can be in a different currency and will not require that the client pay for FX risk coverage
  • Risk profile:  Operational/performance, technical, 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 Security and total Project funding, if any
  • Guarantee-issuing bank Credit Ratings and quality of guarantee instrument
  • Project overall (unlevered) IRR.
  • Note that cash surety deposits are incrementally more valuable than a CAG for determining the equity split — for comparison, a cash deposit of 33% equates with roughly 50% SbLC.
• Draw schedule:  monthly, with a preference for consistent amounts each month.  Greater coverage (CAG or cash) equates with a faster draw schedule. Minimum CAG maturity of one year.

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 widely-used guarantee type is a Standby Letter of Credit (SbLC).  Cash is a close second, and gaining popularity.  Tips for obtaining a proposed “specimen” of the eventual SbLC.

Summary of the steps

1. Contact In3’s deal flow manager or, if you are certain your project fits our criteria, register here.
   • We will review the total required budget, uses of funds, proposed sources of funding and security; if SbLC, the exact wording or “verbiage” for the instrument, including the issuing bank and instrument face value.  This is the place to start if a cash deposit is not available.
     • With approval of the SbLC wording, we will ask for the involved bank officer’s RWA letter, which serves as their letter of intent.  Download templates
     • Once the guarantee wording is approved, or alternative assets identified (bond, MTN or gold), or cash surety deposit confirmed, then we will ask for the proposed monthly draw schedule.
     • All options for assistance with CAP Security
   • Then the last “Essential” is an Authorization to Verify (ATV letter) with the issuing banker that they are ready to proceed.
   • Once the above steps are completed, we will request the rest of the project’s funding 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 a minority equity carried interest without charging any initial fees.
2. Financial closing happens quickly once contracts are signed and upon receipt of the hardcopy instrument at our bank
3. Funding flows per draw schedule, and … project is completed, any guarantee(s) expire, or deposit returned, with project commissioned to begin operational cashflows.

Keep in mind that cash deposit can serve as an alternative to any bank-involved CAG, as can certain aforementioned asset types, namely a registered and rated Bond, Medium-term Note (MTN) or gold (with SKR), bypassing the need for an SbLC or cash.  More

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 as a “Done For You” premium service.

Some projects — typically those structured as a Public-Private Partnership, can obtain 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. Or explore how much leverage can be used for the various types of CAP Security? (advanced topic with examples given).

Article that explains what problems we solve:  Four notorious problems of mid-market project finance that CAP solves.

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