In3 Capital Guarantor Procedure
Securing Project Capital from Inception to Completion
Process Overview
This infographic outlines the streamlined process for project Developers and Sponsors to secure mid-market project financing with In3 Capital, utilizing a financial guarantee (like an SbLC) as security. The procedure is structured in three key stages.
Stage 1: Apply & Qualify
Primary Goal: Achieve pre-approval for the project package. Target: Up to 15 days from delivery of issuing bank’s ATV letter.
Obtain Specimen Verbiage
Guarantor/Developer requests their bank (“issuing bank”) for a sample of the guarantee instrument’s wording, using In3 Capital’s templates as a guide.
Agree on Verbiage
Wording of the guarantee instrument is finalized and agreed upon by both the issuing bank and the funding bank. (Hardcopy sent later in Step 12).
Deliver Initial Project Package
Developer submits a qualifying package to In3 Capital via email. This must include at least the first four of the “six essentials”:
- Project description
- Budget
- Uses of funds
- Draw schedule (how and when funds will be needed)
Prepare Bank Verification Letters
Guarantor uses In3’s templates for their bank to prepare and send via email:
- RWA (Ready, Willing, and Able) Letter
- ATV (Authorization to Verify) Letter
Submit for Pre-Qualification
Developer (or guarantor’s bank) sends signed RWA & ATV letters, project summary, detailed financial projections (Excel preferred), and supporting info. Online registration: `bit.ly/in3-Project-Registration`
Stage 2: Due Diligence to Offer
Primary Goal: Complete due diligence and receive a formal funding offer. Target: Typically 15-30 days.
Package Receipt & Due Diligence
Upon receiving the complete package (including Client Information Sheet – CIS), In3 Capital begins its comprehensive due diligence review.
Establish SPV
A new Special Purpose Vehicle (SPV) for the project is established, or details of an existing SPV are provided.
Funding Underwriter Agreement
The funding underwriter assesses the project and agrees to provide financing based on the negotiated capital structure.
Accept Offer & Prepare Agreements
If terms are agreeable, In3 Capital’s partners and client’s legal counsel prepare the formal Investment Agreement. A binding termsheet is also available.
Stage 3: Fund & Launch
Primary Goal: Finalize agreements, deliver the guarantee, and commence funding. Key Timelines: Financial closing within 30 days of offer; First capital draw within 45 days of closing.
Execute Agreements
Various legal agreements (e.g., Loan Agreement, Share Purchase Agreement) are executed and notarized, or a binding termsheet subject to Conditions Precedent (CPs) is finalized.
Guarantee Instrument & Pre-Closing Actions
- Pre-Advice (SbLC): Issuing bank sends SWIFT MT799/199 pre-advice to funding bank.
- Official Transmission: Issuing bank sends agreed-upon SbLC via SWIFT MT760 (or MT542). (Alternative: Cash surety deposit).
- Share Escrow: 100% of SPV shares held in escrow for In3 Capital until Commercial Operation Date (COD).
- Contract Signing: EPC/GC contracts signed post-In3 approval (formality).
Deliver Hard Copy & Financial Closing
Issuing bank sends physical, signed hard copy of the guarantee instrument to the funding bank via courier. This marks official “financial closing.”
First Capital Draw
First capital draw (funds release) based on agreed monthly schedule, typically within 45 days of funding bank’s receipt/confirmation of security hard copy and financial closing.
Continued Draws & Project Completion
Capital draws continue per schedule. Project progresses through completion, commissioning, to operations. Security (e.g., SbLC) typically expires post-COD (exceptions: SGs, cash deposits).
Important Considerations
Financial Security Options
While a Standby Letter of Credit (SbLC) or Bank Guarantee (BG) is common, In3 Capital also accepts:
– Cash Surety Deposit:
This can bypass some procedural steps and is considered more valuable. The deposit is returned in a lump sum upon the final drawdown of funds.
– Sovereign Guarantees (SGs):
Procedures are largely similar to SbLCs.
Role of the SPV
A Special Purpose Vehicle (SPV) is a distinct company established specifically for the project. This structure helps:
- Isolate financial risk.
- Streamline project management and accounting.
- Facilitate the security arrangement (e.g., share escrow).