"Super Solar Fund’ for South African Commerce and Industry and Agriculture
Solar Fund Solution R5m to R40m
Whenever one refers to a solution in terms of finance, it must reach further than a generic solution and display its commitment to supporting the value channel, is an abbreviation for Agri Value Channel. The fund that we have partnered with in this instance have develop the fund to distinguish it from the market in so many ways. They have considered the lackluster offering in terms of large financial institutions and decided to differentiate their product in six instances, namely:
· The debt/project funding rate
· The interest rate
· The term of funding
· The deal turn-around time
· Deductibility of payments
· The structure of the funding
Large financial institutions are limited to 70% debt funding where we offers a 100% project finance, which includes the installation. Therefore, the supply of the products and the installers will be vetted by our competent technical team at the base fund, to ensure a quality of delivery.
Inevitably our interest rate is risk dependent but is typically up to prime plus 3%, whereas the large financial institutions tend to run up to prime plus 6%. This said, Interest rate can be as low as prime.
Large financial institutions may be limited to a 5-7 year period of funding which could add to the cashflow challenges of entities, whereas We offers a period of 10 – 15 years, and in some cases 20 years. As we all know, cashflow, more often than not, determines the success of any business.
The question is can we move on the approval of a deal? Yes, yes, yes! We start of with a simple application which includes a consent for a credit check. Once this is positive, the game is on for the structuring of the deal which will be subject to analyze your company’s financial statements, your latest electricity bill, your comprehensive solar solution quotation from a reputable supplier and your expected savings on electricity. Our turnaround on deals between R5m to R40m is two to three weeks compared to industry norms of up to six months.
A great differentiator in terms of our funding is that all payments to the fund are tax-deductible, whereas payments to banks have limited deductions on interest only.
Financial structuring can be a great challenge for many companies. Solar Fund Solutions offers Off balance sheet funding whereas the banks are limited to on balance sheet funding.
Any astute financial director will value these differentiating factors and truly benefit the companies they are responsible for.
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