Frequently Asked Questions
We understand that C-PACE and financing can be confusing. Rest assured, we will work with you to make the process as easy as possible.
General Questions
LordCap Green financing is a form of equity, secured by a voluntary property tax assessment. We’ve taken the best parts of C-PACE and improved them for the owner and senior lenders. Utilizing existing C-PACE infrastructure, we provide financing up to 30% of the total capital stack for energy efficiency, renewables, water conservation, and resiliency.
By securing LordCap Green financing through a tax assessment, the funding is non-accelerating, fully transferable, and prepayable at any time. The cost is far lower than traditional mezzanine financing and has repayment terms up to 30 years.
Financing is available for commercial properties across the US. Types of properties include (but are not limited to): Hospitality, Multifamily, Senior Living, Industrial, Mixed-use, and Office. Financing is available for new construction, gut rehab, individual property improvements (such as renewable power installation or roof replacement), and retroactive financing for projects completed within the last 3 years.
Contact one of our experts to learn if your project is eligible.
Typically, we can provide up to 30% of the capital stack, and we have the ability to roll fees and capitalized interest into our funding balance. This means substantial equity contribution to the project, and no additional money out of pocket for the property owner. LordCap Green works with your senior lender to optimize the funds available for the project.
Our minimum investment amount is $1 million, and we can provide financing in excess of $100 million for a single project.
From initial engagement to funding, the typical timeframe to close is 60-90 days, and we work parallel to your lenders.
No, we never ask an owner to change the development designs or budget. We work with skilled engineers to maximize the financing available using what is already eligible in your plan. We then manage the process with the state program to ensure all requirements are met and your project meets all necessary energy efficiency criteria.
Yes, our financing does not interfere with any incentives available for the project. We encourage owners to seek out these benefits if available to them.
LordCap Green's C-PACE equity does not require personal guarantees for repayment. The only guarantees would be related to completion of construction, and we work with your senior lender to conform our requirements to theirs. Given our preferred equity is placed on the land records of the property—not to the property owner, no further guarantees are needed. This is also important, given our investment transfers directly on the property if you sell.
Our financing is structured to be non-accelerating, which means it does not need to be prepaid if the property is foreclosed on or you choose to sell.
You can choose to prepay the financing at any time, with modest prepayment fees, but if you sell the property and choose not to prepay, the financing stays with the property and is assumed by the next property owner and the repayment obligation passes on to them.
Our financing is structured as a tax assessment, so the obligation to pay is the same as that of other property tax assessments. For traditional C-PACE, that means a missed payment automatically becomes a lien, senior to any lender.
Our financing is structured a bit differently so that the lender can defer a payment, avoiding the risk of the borrower missing a payment. This means you get additional time to resolve credit issues with your lenders, restructure the capital stack, or stabilize the property, without consequences for our capital.
Reach out to us today! We will be happy to discuss your projects and ways we may be able to add to your current financing plan.
Frequently Asked Questions
We understand that C-PACE and financing can be confusing. Rest assured, we will work with you to make the process as easy as possible.
What Makes LordCap Green Different
LordCap Green has been involved in the C-PACE market since its inception. We have worked closely with market participants and listened to the needs of banks and owners. Using our decades of experience in structured finance, we provide a product that takes the best of C-PACE and improves it. Proprietary enhancements make the product more friendly for senior lenders and provides the borrower with additional equity in their capital stack.
Yes, we work with the C-PACE programs to verify eligibility under the state rules and file the special assessment on the property.
Yes. A voluntary tax assessment secures our financing. This allows the owner to benefit from long-term, low-cost capital which is fully transferable to new owners. The assessment is repaid like any other property tax, and is 100% prepayable at any time.
No, we are passive. Think of us as silent partners. In the event of a credit restructuring or property foreclosure, we do not interfere with the lenders.
We only offer fixed rate financing.
Fixed rate funding provides the sponsors, lenders, and LordCap Green certainty of costs for the long run. This helps in upfront modelling and managing costs during construction, but that certainty extends well beyond the initial build. Our fixed rate financing provides visibility of costs for any future lenders the sponsor may have, as well as someone you may want to sell the property to in the future.
Our process is straightforward. First, we will gather some basic information on your project, such as address, existing capital structure, and what are you looking to build or finance. With that information, we complete an initial internal review and, if our capital can help, we provide a basic termsheet. This process can take as little as a few days.
Once you sign our termsheet, a number of things happen in parallel. We provide a detailed underwriting list, most of which is information you already provide your lenders and the engineering review is conducted, to ensure we can provide maximum funding to the project. While that is going on, the lawyers are preparing transaction documents, and we are communicating with your lender about how we’ll work together after we close. Once all those things come together, we close and fund 100% of the proceeds into an escrow account. Funds are released as you complete your construction.
Lenders and Capital Stacks
LordCap has created a unique solution to the concerns commonly expressed by senior lenders. In the event of a missed payment, we step back, allowing the bank to forgo paying us before themselves.
Speak to us today to learn more!
Yes, all lenders on the project need to consent to the addition of LordCap Green’s financing. An assessment will be placed on the property which will require the lender to complete a form confirming their consent.
Over 300 banks across the US have consented to C-PACE and that number grows every day. Education is key and we’re happy to help!
LordCap Green Financing has taken the concerns of dozens of senior lenders (money center to community banks and credit unions) and incorporated them into our product. We have propriety structural improvements which are more bank friendly. LordCap Green is happy to work with your senior lender throughout the process and highlight the benefits of incorporating assessment-based equity into the capital stack.
The LordCap team are all experienced bankers. Our capital was designed to be friendly to all parties in the transaction, including the lenders and investors, while enhancing the financing available to property owners.
We work collaboratively with lenders – whether they be banks, credit unions, private lenders, and even government agencies – so our capital fits seamlessly in their processes. This means we can ensure our terms are accurately modeled as part of the lender credit process.
100% of our funds are deposited into an escrow account on close, so funds availability is guaranteed. We can even deposit those proceeds directly with the bank or credit union, providing the property owner deposit credit and providing an attractive incentive for the lending institution. As construction is ongoing, we agree to a disbursement process, including sharing any third-party reviews, which is consistent with the lender’s process, and does not add cost to the transaction. After construction completion and all funds have been drawn, we stay involved in the administration of our funding and notify the lender of any actions that impact the financing or property.
Our financing is pretty easy to model. We offer interest only periods up to three years, consistent with your construction and stabilization assumptions, which is funded upfront. So, during this period, you have no payment obligation. After that, a flat payment is calculated, which pays off the interest and principal of our investments. This period is typically 25 years but can be higher or lower depending on the qualifying measures.
If we look at your project, we can provide an estimated payment schedule you can use in your pro formas and any other modeling.
Our capital is structured to be very efficient in your capital stack. As C-PACE equity, we do not interfere with the rights, priority, and collateral of your lenders.
As an assessment, it is property based, non-recourse and fills the gap between debt and the sponsor’s equity. Typical lender advance rates are between 50 and 65% of the appraised property value, down substantially from five years ago. Adding our capital reduces the sponsors equity requirement to as little as 10%, maximizing value for the owner and filling a potential gap in funding needed for the project.
Federal agencies have become more accommodating of C-PACE and have published guidelines on the inclusion of C-PACE in their lending.
HUD, Freddie Mac, and the USDA all have acknowledged support for CPACE, given its benefits for assisting property owners in financing green and resilient buildings.
Simply: our capital can be prepaid when you are replacing your debt or left in place as part of the permanent capital stack. Our capital is designed to work with any financing in place over the life of our investment and not interfere with the other lenders.
LordCap Green will remain involved throughout the life of the financing and should you eventually choose to sell, the obligation would transfer to the next owner.