How can we help?
We've all asked these at one point!
Is this voodoo magic?
No, this is just an application of financial engineering and project finance tools and structures that would normally only be cost-effective or possible for multi-billion dollar projects. Our structures don’t change the underlying business, but they align the incentives between customers, suppliers, lenders and shareholders. Our technology platform, stardardized approach, and aggregation tools allow us to bring this methodology to even early stage hardware startups for the first time.
How does my company benefit from the project if it is deployed into an SPV or project company?
Depending on the structure, your company (now the HoldCo) can become essentially asset-light. Profits from the project entities can be swept back (a process known as distributions or dividends) to the HoldCo periodically, for example every 3 months. This frees up your HoldCo to raise equity and build out a team without worrying about profitability and maintaining a strong debt service coverage ratio (DSCR) or other required lender metrics.
Why does SPV financing and off-balance sheet structuring matter?
Because many hardware companies have a balance sheet problem. Without disaggregating cash flows and properly structuring the business, they might not be able to lend against it at the scale they need in order to grow - that is if they can get a loan at all. Furthermore, many lenders are familiar with or even require a bankruptcy-remote SPV financing structure.