Question 1

Why should we use a specialized Project Finance Broker like American Business Capital instead of going directly to a bank or lender?

Accepted Answer

For specialized non-recourse deals and 100% LTC structures, direct access is often limited or unavailable. We function as an essential filter and translator, ensuring your project meets the non-negotiable submission criteria of **specialized private capital**. We save you years of rejection by providing guaranteed access, expert structuring, and efficient packaging necessary to secure high-value institutional funding.

Question 2

What is the minimum project size required for our Project Finance program?

Accepted Answer

Our private capital financing platform requires a **minimum total project cost of $50 Million USD**. Projects below this threshold do not meet the mandatory financial eligibility metrics.

Question 3

Is your Project Finance solution a 100% Loan-to-Cost (LTC) structure, and is it non-recourse?

Accepted Answer

Yes, we specialize in non-traditional structures offering **100% Loan-to-Cost (LTC) financing**. The structure is **non-recourse** to the sponsor; the Special Purpose Vehicle (SPV) holds the liability.

Question 4

What is the minimum Debt Service Coverage Ratio (DSCR) and Appraisal requirement for a project to qualify?

Accepted Answer

Projects must demonstrate a **minimum 1.2x DSCR**. Additionally, the final appraisal value must show a minimum of **120% or more of the total project cost**.

Question 5

What is the client's mandatory liquid cash equity contribution (Equity Balloon)?

Accepted Answer

The client must secure **25% of the total project cost in liquid cash equity** (known as the Equity Balloon) and place it into a custodial account as collateral for the loan.

Question 6

What is the fixed annual interest rate and the note's conversion schedule?

Accepted Answer

The financing features a **competitive, fixed annual interest rate** (rate provided upon submission review). The note is a **4-Year interest-only construction/stabilization note**, which converts to a standard **25-Year Fixed Rate** term.

Question 7

What is the upfront fee structure?

Accepted Answer

There is a **6% fee**, which is built directly into the financing structure (Loan-to-Cost).

Question 8

What key contracts and studies are prerequisites for submission?

Accepted Answer

Prerequisites include a signed, bankable, long-term contract for the project's product (e.g., an Off-take Agreement) and submission of independent, third-party Feasibility Studies and Market Studies.

Question 9

What is the required development stage for a project to be considered for funding?

Accepted Answer

The project must be near **Permit Readiness**, indicating a high degree of development completion and immediate potential for construction commencement.

Question 10

What is the fundamental difference between Project Finance and Corporate Finance?

Accepted Answer

**Project Finance** relies primarily on the project's future cash flows and assets for repayment, utilizing a Special Purpose Vehicle (SPV) with non-recourse or limited-recourse debt. **Corporate Finance** relies on the parent company's balance sheet and credit history.

Question 11

How is political and regulatory risk managed in large international project finance deals?

Accepted Answer

These risks are typically managed through multilateral agreements, the strategic use of **political risk insurance (PRI)**, and establishing a robust, stable legal framework for the project's agreements and contracts.

Question 12

What is an Off-take Agreement, and why is it mandatory for securing project finance?

Accepted Answer

An **Off-take Agreement** is a long-term contract where a buyer commits to purchasing a substantial portion of the project's output (e.g., power, commodities). It is mandatory because it provides the guaranteed revenue stream necessary to service the debt.