IFI’s Completion Assurance Program™ (CAP) delivers advantageous funding for qualifying mid-market projects, $25m+ ($50m-$2b preferred), at any stage of readiness (see below), located almost anywhere, within our focus areas (sustainable food, real estate, waste-to-energy, etc...) when developers arrange short-term security to assure project delivery in a usable format. See also “Security,” below.
New for 2025: Security solutions that are organized as either DIY, self-performed, or “Done-For-You” (DFY) premium services. Know more, including this 1-page checklist to find out if you qualify (Solution 4, a DFY guarantee)
In effect, we guarantee 100% of the project’s money, but a partial financial guarantee or cash security deposit from your side assures project delivery — this is NOT a loan guarantee.
THIS IS A FREE, SELF-GUIDED SERVICE to help you succeed.
Any reasonably well-defined, mid-market project can fit with our partner’s conditions for accelerated financing. We define “fit” as any project, or portfolio(s) of projects, that satisfies our 4 S’s:
Notes:
You may proceed to pre-qualify for our funding via our streamlined set of basic facts, aimed at gaining a binding offer in the least possible time.
This means start by selecting a product that best suits your situation. For example, with Solution 1 (Do-it-Yourself SbLC), simply download IFI’s SbLC template, and either you or your sponsor contacts the banker that will eventually issue this guarantee on your project’s behalf. With their conditional agreement to later send this instrument, ask them to fill in the bank name, location, face value amount, and any necessary format changes (ideally on the bank’s letterhead) so we can confirm that the proposed wording is acceptable.
What’s in it for the project developer/owner? Such guarantees streamline due diligence, ensures continuity and certainty of project acceptance (once pre-approved using our 3-stage process), improve investment terms and expedite closings, simply by acting as a source of “security” that the project will be successfully completed and commissioned to begin commercial operations. When that does not occur as planned, the parties work it out.
What types of security can be used? Starting in 2024, clients have been most successful using either a Standby Letter of Credit (SbLC), Sovereign Guarantee (SG) with bank confirmation (in countries that can issue them, mainly developing Asia lately), or a cash deposit, typically 30-33% of the required funds. Other instrument types are also potentially acceptable, but minimum face value for an SbLC must be at or above $18 million per instrument, or … minimum 25% cash deposit, described below.
What are the next steps after pre-approval of the security? Once the project sector, budget, type and location are approved, then we ask that you provide project basics (up to 3 or 4 documents can be uploaded) using our tracking system. We will confirm receipt of your registration within a few days.
To enter formal due diligence, leading to an offer of binding terms (if all goes well), we want to discover and verify what we call your “Six Essentials“. Once accepted, we usually offer binding terms within just a few weeks with zero initial cost. Proceed to our Proposal Builder where you will find all the tools and templates you will need to put together a winning proposal.
The last Cornerstone, Security, opens attractive, non-recourse funding for projects that otherwise qualify ($25m+ and other “S” cornerstones), please do not give up on securing a guarantee without a fight. It is the only option for 100% funding without the need for developers to pay at least some initial cash.
When IFI CAP funding is your best or only option
If you or your immediate circle of co-founders, family and friends do not happen to have sufficient financial depth, consider a “sponsor” that might be part of the project construction team or unaffiliated third party. Proper explanation of how the guarantee would be used and why it is needed is key to gaining their support, as is offering them a financial incentive such as a minority equity interest.
When discussing this with potential sponsors, don’t accept the first “no” and just give up. Be sure to approach the guarantee as an experiment in order to become better informed, learning how to best present this opportunity, starting with what’s in it for them to play this role.
If you need this Done For You (DFY), please consider our enhanced service options.
New clients often have questions about this Security, as such guarantees are often initially misunderstood. They are quite different from trade finance-related guarantees, for example, as they’re mainly used to offset project non-completion and eliminate fraud, and not typically based on cash on deposit, such as with bank-issued instruments like the Standby LC.
They’re also unlike loan guarantees in that they are released (allowed to expire and are no longer used) once the project reaches Commercial Operation Date (COD). Traditional funders seek financial guarantees for the life of the loan, as a method of reducing their credit risk, along with a pledge of collateral. CAP funding is different.
Worth noting, financial guarantees can often be provided through counterparties, sometimes called “sponsors,” such as an involved OEM (major equipment supplier/integrator), or a well-established EPC firm or General Contractor hired to build the project’s assets, usually with a negotiated form of enhanced compensation.
For developers who wish to bring in such sponsorship, ask us for a set of slides you can add to your project’s pitch deck, including sample contractual language defining the sponsor’s role and benefits. This helps assist with proposing and explaining a capital/completion guarantee to firms you are interviewing for handling key functions like project engineering, hardware procurement, and/or construction.
If your project hits these four cornerstones, it probably qualifies for favorable and generous terms with streamlined due diligence and much faster and more reliable closings (typically 30 days or less).
With this speed and greater risk tolerance comes increased certainty. Why bother chasing other funding sources when anything can happen to throw the deal off the rails? Doesn’t it make sense to first explore this CAP option to its logical conclusion?
With dozens of testimonials from private developers, IFI CAP funding is often the most reliable, affordable and expedient source of mid-market project financing, with far faster-than-average due diligence. Our funding is available for diverse, qualifying projects worldwide (very few exceptions) when either a partial Standby LC (SbLC), Bank’s Guarantee (BG), Sovereign Guarantee (SG), or cash deposit can be obtained.
In general, IFI does not currently offer sponsorships for client project funding through CAP at no cost. When such sponsorship is needed, the project developer and/or promoter can use IFI’s tools and templates to confidently present their project to potential sponsors, or In3 registered Affiliates may be able to help. Either way, IFI’s premium services would need to be arranged under a management services agreement (MSA).
We are working diligently to add third party “impact guarantor” sponsors for targeted sectors and geographic locations — such as waste-to-value, solar and real estate projects in the US — but for now, please register once you are prepared and let us know you are seeking sponsorship.
In a hurry? Developers are encouraged to seek suitable CAP funding sponsors on their own; IFI Capital or our Affiliates can assist on a case-by-case basis to help accelerate (feature your project’s sponsorship opportunity) via a retainer or fixed-fee contract to serve in this role. Be sure to mention this in approaching IFI as we will otherwise give priority to projects that already have already facilitated a qualifying guarantee.
In all cases with project finance, the guarantor assumes an obligation only if the borrower defaults (material breach of contract following a reasonable “cure” period). In that unlikely event, which really must not happen, some investors or lenders would not “call” (require repayment) of the loan, as the existence of the guarantee enables the parties to work through any issues and, if there is no way to finish the project, come to an equitable solution. In that sense, guarantees avoid or prevent criminal actors and their unethical practices of fraud, malfeasance, money laundering, etc.
Guarantees constitute leverage and can be used to greatly enhance the developer’s credit while qualifying for better investment/loan terms, faster closings, and greater freedoms than could otherwise be afforded without similar accountability / backstop / surety.
More at our Capital Guarantee Program FAQ on this topic of how developers can be assured that the guarantee will not be called: in3capital.net/frequently-asked-questions/#faq-6 and how the guarantee can be used in3capital.net/frequently-asked-questions/#faq-2
In conclusion, such BG/SbLCs, AvPNs or SGs used for CAP funding will not work for everyone, and although often free to the project owner, not always within reach. Owners need to have a project that is provably feasible, well planned, and confidence but some degree of humility (social skills) to gain proper attention and earn trust.
The guarantee itself is not usually free to the project owner, as the involved bank charges a fee to issue it, with three exceptions: 1) Sovereign Guarantees (not available in all countries), or 2) When a sponsor, such as an EPC firm or general contractor, can be involved as the source of the qualifying guarantee, or 3) When a qualified company issues an Avalized Promissory Note (APN), where the bank providing the Aval views the PN as coming from a creditworthy customer, in which case no collateral is required, and the bank typically does not charge the issuing company for the Aval — or at most, charges a nominal processing fee. But if not creditworthy, the bank will likely say the PN issuer will need collateral as their Aval makes them a likely target in the event of default.
In cases where the source of the guarantee can be authenticated and verified as part of a legitimate practice, we may be able to advance the cost of the bank issuing the instrument just slightly ahead of the first draw of funding. If this is your requirement, be sure to let us know.
Here is an implementation guide: Nine Steps to Project Fundraising Success using CAP.
We can help arrange guarantees for projects we finance under a Management Services Agreement, with a tightly defined scope-of-work and timetables for each milestone and deliverables. To avoid these service costs, if you are seeking project capital, better to bring forward your own guarantee or cash deposit (compare) as part of qualification for CAP funding.
There are no up-front fees whatsoever if developers bring forward the required capital guarantee or cash deposit without asking us to “sponsor” the project owners. Our preferred model is direct financing of qualified projects and we are committed to providing the tools and techniques to make that easier. Check out extensive tools, templates and other resources available to help coach and guide developers to accomplish this.
Note that In3’s Registered Affiliates may also be adept in building your project’s qualifying profile as they have received training via our MasterClass to serve your needs.
For example, we offer sample contractual language to assist you with proposing that asset owners you know “sponsor” a Completion Assurance Guarantee (usually in the form of a partial Standby Letter of Credit). Here’s a landing page with 1-page “tear sheet” and background info you can share with firms or people you interview who may also take on a functional role, like project engineering or construction, or may just have an affinity for the industry and want to support your project to earn some liquidity or other incentives. More at CAP Proposal Builder
History shows that it has worked out well for many developers seeking faster, easier and better access to available capital for qualified projects of US$25 million or more.
All that said, we realize CAP is not for everyone. Some developers just do not have the patience or drive to explore possible sources of a qualifying completion assurance guarantee, which would be unfortunate (the advantages would far outweigh the costs or effort), but fine. The only time CAP does not work — which is the one time that qualification is just not within reach — is when the developer has no liquidity, inadequate credit, and also no possibility of gaining support from a backer/sponsor/senior lender (minimum 30% of the project’s total funding, perhaps delivered in 2 or more tranches or chunks) because there is no contractor or well-established vendor or anyone else that can be involved. The project is just not solid enough to involve others.
This unfortunate scenario assumes the project is also not part of a public-private cooperation with a national government agency involved that could “sponsor” that way, or some other, creative solution. Is that true for your situation? It is rare, but it happens.
More at options & resources for new In3 Clients
Contact us with questions or for further information on how to take advantage of IFI’s Completion Assurance Program to accelerate project finance closings and obtain the best terms.
* “Market failures” in the sense that small borrowers, especially those in developing countries, regardless of creditworthiness, sometime lack access to the credit resources available to large borrowers, or borrowers in more developed parts of the world. (More at article or original paper at EconBiz.de archive.)
Difference between a Bank Guarantee and a Standby Letter of Credit (LC or Standby LC / SbLC) are subtle, but in the US and most developed economies, a BG and SbLC are effectively the same thing. Most often in the US the instrument is called an SbLC, but a BG elsewhere.
As stated above, UNLIKE trade finance, that uses these instruments to guarantee payment upon receipt of goods, IFI-CAP uses a SbLC or Sovereign Guarantee (when available), or cash deposit, to ensure completion of a project’s construction and commissioning to commence commercial operations. In other words, it is designed to prevent fraud
More about the underlying rules for such project finance transactions with Standby Letters of Credit, with a preference for Uniform Rules for Demand Guarantees (URDG 758), including legal analysis that compares who benefits and to what degree. Other rules can be acceptable depending on the location. A better introduction to this topic can be found at in3capital.net/guarantees
* “Market failures” in the sense that small borrowers, especially those in developing countries, regardless of creditworthiness, sometime lack access to the credit resources available to large borrowers, or borrowers in more developed parts of the world. (More at article or original paper at EconBiz.de archive.)
Difference between a Bank Guarantee and a Standby Letter of Credit (LC or Standby LC / SbLC) are subtle, but in the US and most developed economies, a BG and SbLC are effectively the same thing. Most often in the US the instrument is called an SbLC, but a BG elsewhere.
As stated above, UNLIKE trade finance, that uses these instruments to guarantee payment upon receipt of goods, IFI-CAP uses a BG/SbLC or AvPN to ensure completion of a project’s construction and commissioning to commence commercial operations. In other words, it is designed to prevent fraud.
Companies seeking an SBLC frequently encounter offers involving “leased SBLCs”
rented balance sheets or instruments supposedly available without meaningful
underwriting.
These structures deserve considerable scrutiny.
A genuine issuing bank evaluates credit exposure. Banks also operate within
regulatory, compliance and internal risk frameworks.
A credible financing structure therefore begins with the applicant’s financial position
and the economics of the underlying transaction.
The question should be:
What assets, cash flows and financing sources can support the required credit
exposure?
That approach creates a financing strategy grounded in commercial reality.
IFI works with companies that have legitimate Standby Letter of Credit
requirements and require assistance structuring the collateral side of the transaction.
The process typically begins by determining:
From there, the transaction can be positioned across relevant financing channels.
This may involve structured debt, asset-backed lending, receivables financing,
private credit or other forms of credit enhancement.
A company requiring a Standby Letter of Credit should evaluate the entire capital
structure rather than viewing the SBLC as an isolated banking product.
Cash collateral is one form of credit support.
Receivables, assets, contracts, sponsor equity and structured debt can also
contribute toward a broader financing solution.
For companies with credible commercial transactions, strong repayment sources and
a genuine SBLC requirement, creative financing can help bridge the gap between
available collateral and the amount required by the issuing institution.
IFI structures financing programs for companies seeking Standby Letters of
Credit, trade finance and other forms of structured credit enhancement.
Explore our SBLC collateral financing solutions to review potential structures for
transactions where full cash collateral is unavailable.
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