In this financial market, the CEO has identified numerous examples of non-residential entities that simply cannot access capital in any situation, regardless of their financial strength. For this reason, the GOE created a Direct Lending Revolving Loan Program (RLP) to address finance gaps in the market. The RLP is designed to provide essential capital to early-stage companies and commercial projects utilizing innovative energy technologies that are incapable of accessing capital from traditional sources. The idea is to provide these companies and projects the funding required to deploy and commercialize innovative energy technologies in an effort to create jobs and spur traditional lenders to fill these finance gaps in the future. Loans under the RLP will be larger than the loans under the GCCR program, with a minimum loan of $100,000.
At any time, a prospective loan applicant may submit an application for the CEO RLP to either CHFA or the CEO. Contact info is listed below. However, due to the unique structure of this fund and the evaluation criteria that guides the Loan Committees decisions, loan applicants are encouraged to contact the CEO for an initial assessment of the project. If the project is not a good fit with the program, there are often other financing opportunities and options to consider. Once an application is submitted, the following explains the steps of the loan approval process:
• Initial underwriting analysis: Upon receiving an application, CHFA will assist in the financial review of the application materials, develop an assessment of the financial strength and overall loan risk associated with each project and applicant, and make suggestions for how to secure all loans and/or mitigate loan risk (through collateral, loan terms, etc.).
• Loan Committee Evaluation: In reaching a decision on a loan application, the Loan Committee will critically analyze all information contained in the loan application as well as the initial underwriting analysis provided by CHFA. The Loan Committee’s decision will be based on a combined assessment of several factors, discussed below.
• Underwriting process and loan closing: Upon approval, CHFA will assist in moving forward with the loan process, including underwriting the loan, issuing a commitment letter and processing all necessary loan documents. Depending on the complexity of the loan and the level of due diligence, the loan process (from approval to closure) will likely take between 60-90 days to complete.
The purpose of the RLP is to provide financing for eligible and extraordinary projects and companies that promote energy efficiency and/or renewable energy yet are unable to obtain financing from traditional sources. Along with the financial strength of a prospective applicant, the CEO will be looking to assess an array of components to evaluate whether to move forward with a loan. These components include the following:
• Job Creation: A vital component of the RLP is economic development and job creation in the State of Colorado. All applications will be analyzed and compared to each other from a perspective of job creation potential.
• Consumer Costs: The CEO seeks to reduce long-term consumer costs associated with energy. Projects and companies that apply for the RLP will be evaluated based on their ability to positively impact the costs of energy.
• Energy Security: Improving the energy security of Colorado is an important mission of the CEO. The Loan Committee will seek information within RLP applications that can demonstrate an ability to improve CO’s energy security.
• Environmental Stewardship: Promoting environmental stewardship is at the heart of the CEO’s mission. All RLP applicants must be able to demonstrate that their projects/companies will indeed result in positive environmental benefits.
• Addressing Finance Gaps: A central tenet of the RLP is to address financing gaps in the market. Therefore, it is vital to ensure that the RLP isn’t be used by projects and companies who are solely seeking better financing terms than which are currently available in the market. All RLP applicants must be able to demonstrate that they have not been able to obtain capital from traditional sources.
• Leveraging Potential: The CEO seeks to effectively and efficiently utilize RLP funds. Therefore, applicants who identify ways to leverage RLP funds to obtain larger amounts of capital from the private sector will be evaluated by the CEO with much greater interest.
For further questions, please contact the CEO Finance Manager.