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Biodiesel - Ethanol Project Funding
Analysis Form - Pre Qualify
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Request Biodiesel Ethanol Project Financing Proposal
A wide variety of
feedstocks are available to producers of biofuels today. Plants that can
process numerous feedstocks are the most versatile and profitable. This is
important when pursuing funding for financing biodiesel and ethanol plant
projects. MFI / Epic offers 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 roadblock to getting these
developments out of the ground is
usually the money availability lenders and investors with the expertise in the
field to appreciate excellent opportunities in biofuels production. 100% debt and
equity programs are available for qualifying green renewable energy developments. There are specific
criteria that a project must meet to qualify for this and we are available to
discuss with you. We are
available
to help the developer meet the requirements and address any questions or
concerns regarding
this financial program. This is a real opportunity to guarantee sustainability of the
project and insure clean power well into the future.
Developers 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 an can present the virtues of the
financial and other aspects in a well prepared executive summary and / or
business plan. Others may need extensive consultation with highly qualified experts
in the field. 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, there are several ways one can obtain financing loans for funding 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.
We will analyze
your plan and submit for prequalifying. Please submit our
Biodiesel Ethanol Development Analysis Form for Project
Preapproval and Quote.
To properly assess the plan, we ask general and specific questions regarding
your development.
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