Energy companies are finding new ways to finance their projects in these tough times for project finance. Most banks or traditional lending options require the developer to have a minimum of 30% down...and worse yet, many banks just aren't lending. There is, however, a solution!
Energy companies are working in the spirit of cooperation with their buyers, or "off-takers" and structuring contracts that enable the the developer to be funded in as short as two weeks...and the buyer can even structure the agreement in a way that enables them to defer payments for up to three years. Everyone wins! Most importantly, developers can get back on their feet and begin working again.
There are a few stipulations in order to successfully fund a contract. First, the buyers must agree to "take-or-pay" terms. In short, this is an absolute guarantee to purchase the product. Additionally, the buyer must have good credit. They must have a credit rating by Moodys or Standard and Poors of triple B or better. The other conditions to fund the contract are simple: they must be sum specific, date specific, and dollar specific. It's really that simple. Most government agencies and municipalities meet the minimum rating requirements. Some companies are even using this method of contract funding to fund their tax credits. As long as everything in the tax credit is spelled out as specific dollar, date, and the absolute language is used, the tax credits can be used to fund the project as well.
Walker Commercial Funding Brian Walker http://www.walkercf.com brian@walkercf.com (281)852-8298
Posts
Seed Newsvine
