When CAP is your best or only option

For project developers seeking funding of $25 million or more, in any sector and location we work, CAP funding can deliver the needed capital that solves several common problems.

See if any of the following conditions apply to your project:

1. For projects at a relatively early stage — not yet ready to begin construction.
   • We can pay for remaining project development work like design or engineering, securing the site, contractors, licenses, permits, etc. CAP funding can be secured at any reasonable stage.
2. When there is no free cash to pursue any other options — most traditional funders expect substantial new cash from the project developer, so-called “skin in the game” of 35-65% (from the developer/owners); not so with CAP. We’re fine with full leverage funding — 100% of the required capital, with no upfront fees.
3. The need for speed – we offer a clear, fast and free yes/no opinion, then can reach closing in 30 days, first funding 45-60 days.
4. Project financial performance below ~12% unlevered IRR or 1.25% DSCR
   • CAP can accept lower IRRs and does not charge interest, even up to 100% of the required funding. Non-CAP alternative funding usually requires project IRRs (unlevered) above ~12% to cover higher APRs.
   • With traditional loans, time is money, and perception of risk can ruin otherwise financeable deals. Lower IRR projects often encounter a “boundary condition” where high-interest loans might not amortize within an allowable margin of error. This is particularly common in times of market uncertainty — any number of factors can contribute to construction schedule and project commissioning delays, requiring higher debt service coverage and sometimes substantial debt service reserves.
   • To defend against this, non-predatory lenders seek to lower their risk through more extensive due diligence, adding substantial Contingency “just in case” (worst-case scenarios), extending lead times, increasing the required borrower “skin-in-the-game” (unexpended cash contributed to the project), and/or long-term credit enhancement. CAP requires none of this.
5. Are there remaining substantive risks, perceived or actual, such as technology risk, execution risk, operational risk, or political/country risk? Some of these risks are insurable, but what about those that aren’t, or to save the time and cost of arranging the insurance policy?
6. Local currency (not US$ or Euros) is strongly preferred to fund and repay the financing?  We’re fine with almost any currency.
7. Does the developer want to take on a true equity partner to make subsequent funding easier, building a long-term relationship with a like-minded partner that does not expect control? 

If any of these seven conditions apply, CAP should be the focus until success or pivot.

See also:

For more: Your solution to notorious problems with mid-market project finance – In3 Group