Investment banks aren’t interested, and neighborhood banks just don’t understand. So where is someone who has a great commercial solar project supposed to get funding?
Anyone operating within the commercial/industrial/government segment of the solar industry has asked themselves that question at least once, if not every time they are trying to launch projects.
In the case of big investment banks like Wells Fargo and Chase, commercial projects are often too small for them to notice. It’s not just being a small fish in a large pond; it’s like being a termite in the Amazon.
No matter how much you stand on a soapbox and beat your chest about your investment-grade project, they just won’t notice. Your return-on-investment just isn’t big enough for them.
And your neighborhood commercial banks don’t have the expertise in the solar industry to fund your projects. The amount of time and energy your team would have to expend to get them up to speed is much better spent on improving your business and making sales.
Sounds hopeless, doesn’t it? Well, don’t lose heart. There is a solution, but you have to know where to look.
The smart solar firms that specialize in the commercial sector are removing these barriers by self-funding projects through partnerships with well-capitalized energy companies providing the money.
Working with firms that can provide financing on their own makes sense for an industry segment where concerns about commercial projects make other potential funding entities nervous. What do they provide that traditional funders don’t? Here are the first three that come immediately to mind (the reasons aren’t limited to these three, but there are only so many hours in the day):
- They’re already sold.
Unlike other potential lenders, they understand commercial solar is an asset-class worth investing in—it’s a given. In their minds, the rewards far outweigh the risks, and they are anxious to further the Solar Century by funding your project. Think of how much time and energy you’ll save if you find a partner that understands instinctually instead of having to be convinced.
- They have likely experienced it all.
No business deal comes without its challenges, but successful businesses make sure challenges don’t equate to surprises. That’s why finding commercial solar companies with in-house financing, though occasionally difficult, can be well worth the reward.
Well-capitalized investors who partner with these companies aren’t interested in working with unproven neophytes. If they’re willing to provide their money for the companies to invest, you know they’ve probably seen it and/or done it all and won’t get spooked the first time engineers find poor soil conditions or inaccurate topographical maps.
You know they’ll be committed to making sure your project is a success—and can keep you from hyperventilating when the “insurmountable” problems come up. Don’t worry, they got this—and they got you.
- They can provide you money more quickly.
Trying to get loans for commercial projects from traditional banks can often feel like a dentist’s drill against your skull. The endless phone calls, the discussions with underwriters who couldn’t identify a solar panel if you showed them a picture—it’s maddening. So why would you voluntarily go through that when you can work with a solar firm that can underwrite your project?
Now even the most lenient commercial solar companies will do their due diligence. They’re not interested in tarnishing their reputation with strings of failures, and like the banks, they want returns on their investments (as do the companies whose money they’re using). The difference, of course, is that you only have one set of hoops to jump through, making the money available far more quickly than more traditional funding sources.
How do we know all of this? Well, Standard Solar is one of those rare commercial firms that can offer you in-house financing for your project. With our extensive commercial-project experience and $300 million in low-cost capital to spend (thanks to our partners at Gaz Métro), we’re anxious to deliver projects to completion—maybe even projects just like yours.
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