Program 7A – Non-recourse Loans for Projects, M&A or Growth Capital
| Type Of Loan: | Non-recourse, 100% LTC, Project or Portfolio financing. Similar structure to a line of credit with disbursements, but not a revolving line — borrow then repay. Once repaid, further borrowing would require a new loan request. Also good for acquisitions and refinancings as well as project funding and growth capital. |
| Length Of Loan: | Flexible terms but standard is 10 years with 2-3 year grace period for development projects. Can be longer (up to 20 years) if project warrants it. |
| Prepayment Penalty: | None |
| Initial Costs: | No up front or due diligence/LOI fees |
| Minimum: | $25 million minimum per loan; prefer $50mm-$1B |
| Interest Rate: | 5’s-6’s% fixed annual interest (APR). Lower rates with a minimal profit share. All rates subject to change and based on quotation at the time of application. |
| Timing To Funding: | Close and initial funding in under 2 months, then Borrower receives 100% of the loan amount (5x the 20% deposit), not 80%. Funding is ordinarily delivered in 2 or more tranches, but if the borrower prefers lump sum distribution (full amount of loan proceeds in a single draw) this is available at a slightly higher rate of interest — likely in the 7’s% APR. |
| To Qualify: | Project, venture or M&A transaction must have reasonably low risk; see comparison. Client needs to provide 20% security deposit at closing and the lender will 5X that. Collateral can be cash, US Treasuries, TIF notes, or various types of rated bonds. May also be able to use Tax Credits in certain circumstances. To check if non-cash options will be accepted, please send us a sample (“specimen”) or draft of proposed collateral for review. If the 20% deposit is in the form of cash, the deposit is effectively returned when loan is funded (plus the additional funds become available in the number of tranches agreed to). Otherwise, if 20% is securities, treasuries, bonds, or tax credits, the deposit sits and is released upon loan repayment in full, which can be either from operating cashflow or from subsequent refinancing. |
Program 7’s intake steps:
- NDNCA (available upon request); fee agreement
- Executive Summary – lengthy business plan or offering memorandum, presentation, etc. is fine but I also need a simple 1-pager that captures just the essential facts of what, where, how much, etc.
- Budget and Proforma in Excel
- Proof of Funds/Asset for the 20% (we need to be able to authenticate the value)
- Summary Application (specific to this lender, will provide the package of forms after screening)
- Preliminary “tranche” draw schedule (request form/template)
- Management/Sponsor bios
Download printable 1-page P7A Loan Program Tear Sheet
Coming: Program 7B (10% down), cash-only deposit for 10x the deposit at slightly higher rates of interest.
To start: Contact Us to see if you qualify.
