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How To Get Biodiesel Project Finance

Biofuels today could be produced using a wide variety of feedstocks available . Plants can process numerous feedstocks are most versatile and profitable. This is important when pursuing funding a Biodiesel or Ethanol Project. Hindmarsh LLC fundingoffers expertise in Biofuels with appropriate partners needed to facilitate rapid funding for the financing of biodiesel and ethanol plant development projects. Securing 100% Debt and Equity on these developments could be a daunting task, if not just a little intimidating. The main stumbling block to getting these developments off the ground is usually the availability of money. 100% debt and equity programs are available for qualifying green renewable energy developments. There are specific criteria that a project must meet in order to qualify … one of this being the Applicant’s disponibility to pay his Dilligence. We are available to help the Applicant to meet his or hers requirements and to make suitable changes to thie Documents in order to meet all financial criteria.

Applicants with extensive resumes are another key element to getting financing for funding biodiesel and ethanol plant development projects. Investors invest in the key players as much as they invest in the project. There are several issues to consider in the purchase of an existing plant or the development of a new biodiesel or ethanol project. Financing / funding via debt and equity can be achieved up to 100% of the cost of purchase or development. Experienced developers know if the plan is financially feasible. It is usually required that at least one principal that is highly experienced be involved in the ownership and management of the development.

While selling Biofuel is the main mission, many feedstocks provide an opportunity to profit from food grade byproducts for human and animal consumption. Therefore, offtake agreements and contracts can be expanded beyond the fuels. Offtake contracts should be for as long a term as possible and contain minimum capacity guarantee language if at all possible. Startup and predevelopment money is a huge factor in creating any ambitions green energy development. While most investors and lenders are looking for developments that are “shovel ready”, on occasion, they may participate in predevelopment activities and costs. The main concern is how to ensure cash flow will sustain the continued long term successful operation of the facility. Fortunately, Hindmarsh LLC has several ways to obtain funding for a Biodiesel or Ethanol Plant Projects. Here are a few of them:

* Equity – Is provided to the deal by making available common or preferred stocks to investors, private or institutional. Both individuals and institutions may become stockholders from 10% to 50% or what all parties agree to of the total. To facilitate this type of finance approach, stocks of the proposed company are sold to qualified investors. They get an ownership interest in the development in exchange for cash injection into the development. When this approach is applied to the creation, the development’s or company’s stocks is offered to investors who would provide the cash for facility out of the ground, operated and maintained properly. Buyout agreements can vary according to the needs and objectives of each party. In exchange for their cash, they would receive percentages of profits to be generated by the facility once its operation starts to generate income.

* Debt – This approach comes in different forms. Short-term or bridge debt where the payment of debts would be due in a year or two after the close of the loan. This is usually for the construction phase of the project. Then longer term permanent debt is put into place after that. The methods of financing for funding an ethanol or biodiesel plant project vary. Debt involves a loan that is to be repaid on a predetermined repayment schedule. Debt service coverage ratios (DSCR) will apply. A lender originates the loan from it’s own sources or syndicates the debt which raises funds for expenses or working capital by offering bills, bonds, or notes to both individual and institutional investors. Unlike equity cash injection, where investors receive a percentage of profits and equity in the project in exchange for their cash investment, the lenders of debt receive a secured promissory note secured by assets and / or PPA or Off Take contracts from the company to be repaid of the principal amount plus interest. In simple terms, money is raised by borrowing from investors / lenders. When using debt, funds will first be used to finance the land acquisition and development. A specific repayment period will be agreed upon regarding when and how the payments for the debt plus interest will be paid by the project profits.

Please submit your Business Plan & Feasibility Study in English, in short electronic format (10-15 pages) plus our Executive Summary form completed.

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