Solar Financing Options

June 5, 2010

Easy and In-house

TD Canada Trust (Home Improvement Loan Program)

  • This is indirect dealer financing (like a car loan)
  • iSolara is authorized to take the credit information and provide pre-approved financing
  • Details:
    • Maximum amount: $35-50K (based on client approved credit)
    • Down payment required:  $0
    • Interest Rate: Prime + 2.99%  variable or fixed
    • Secured on: Unsecured; based on client approved credit.
  • Interest payments can be deferred up to 365 days with pre-approval
  • Payment amount remains constant even in variable rate loans (added to last payment)
  • Interest rate can be locked in for up to 90 days

Third-party Financing

We will provide much of the documentation that will be needed:

  • Project Costs (Sales Offer or Estimate document)
  • Project Budget (SWITCH calculator)
  • Projected Energy Generation (RETScreen printout)
  • Panel and Inverter Guarantees

Clients must provide their own personal or business financial information.

Any Bank or Mortgage Lender:

  • The client adds to their mortgage if they have equity available
  • Details:
    • Maximum amount: Up to 80% of their home’s appraised value
    • Down payment required: Must leave 20% equity based on home’s value
    • Interest Rate: These will always be very best interest rates
    • Secured on: The borrower’s home or commercial building

Farm Credit Canada

See www.fcc-fac.ca/en/products/lending/energyloan_e.asp or phone 888-332-3301

  • FCC can release progress payments to vendor on borrower’s instructions once loan documents have been signed
  • Only for farmers or agricultural businesses
  • Details:
    • Maximum amount: unspecified, but well over $500K
    • Down payment required: 25% for new customers, 20% for existing customers
    • Interest Rate: Similar to mortgage rates + 2.25%; can be variable or fixed rates
    • Secured on:  real property (i.e. land or building) or personal property
  • Documents Required:
    • Micro-fit Conditional Offer
    • Business Plan (SWITCH calculator from iSolara would be acceptable)
    • Installers Purchase Estimate
    • Financial statements and tax assessments for one- three past years

TD Canada Trust MicroFIT/FIT Small Business Banking Program

Contact Person: Brad Kennedy, TD Merivale, 613- 617-5285 (8am-6pm); bradley.kennedy@td.com

  • Client pays 25% as initial deposit
  • TD releases 50% after panels are installed
  • TD releases remainder at time of connection
  • Details:
    • Can be based on the Canada Small Business Financing Loan Program, which reduces the risk to the lender
    • Maximum amount:  up to the value of the security
    • Down payment required: 0% if mortgage-secured; 25%  if secured on solar system
    • Interest Rate: Best rates are mortgage rates with building as security; prime + 3% (always variable) if secured on system alone under government program
    • Secured on: Can be secured on the system alone
    • Term: 5 years
    • Amortization: 10 years if on system alone; mortgage: maximum of 20 years
    • This is a term loan
  • Documents Required:
    • Micro-fit Conditional Offer (they call this the “MicroFIT Application Approval”)
    • Connection Agreement (i.e. Invoice from LDC with cost of connection)
    • Business Plan (SWITCH calculator from iSolara would be acceptable)
    • Installers Purchase Estimate
    • Tax assessments and financial statements for two most recent years
    • Register as a sole proprietor and have a GST number

 

TD Agricultural Financing (Any size, including over $500K)

Contact Person: Kelly Fawcett-Mathers, 613-448-2316  x222 or Sylvain Racine: 514-465-7401

    • Progress payments to suppliers can be accommodated through the use of secured demand loans; typically the debt becomes a term loan when the project is completed
  • Details:
    • Maximum amount: Limited by security
    • Down payment required:  Depends on security; could be as low as 0% with surplus mortgage equity
    • Interest rate: Can be as low as mortgage financing, but depends on security and farm income
    • Secured on: Usually on land and buildings (which gives the lowest interest rates), otherwise on the improved income of the farm (i.e. including the OPA income); a key criteria will be the cash flow of the system (i.e. low income in a cloudy Fall)
    • Term: can be variable or locked in for up to 5 years; could be a 10 year term if approved
    • Amortization: length depends on security offered (longer is possible when secured with land and buildings)
  • Documents Required:
    • Two years of financial statements (income tax assessments or accountant-prepared accrual statements)
    • Micro-fit Conditional Offer (they call this the “MicroFIT Application Approval”)
    • Business Plan (SWITCH calculator from iSolara would be acceptable)
    • Installers Purchase Estimate

Verdecon Capital (for projects from $25K to $4M)

Contact Person:  Eric Merkley, (613) 867-8180, eric.merkley@rogers.com

  • No initial deposit; 100% financing
  • They release money in stages to work with our payment terms ; securitization of first releases is based on borrower credit-worthiness (i.e. being able to carry the payments even if there is no income from the system)
  • Details:
    • Maximum amount: $4M
    • Down payment required: None
    • Interest Rate: Mortgage rate + 3% (depends on their credit rating; best credit and biggest corporations could be lower)
    • Secured on: OPA Contract, and a construction lien is put on the solar system
    • Term: can be variable or locked in for 5 years; could be a 10 year term
    • Amortized over a fixed term (usually 10 years); cannot be paid off early
    • This is a term loan (cannot be called in early)
    • Source of financing: Bond market, pension funds, etc.
  • Can be finalized in 2-3 weeks, pre-approval is possible
  • Can be structured as a lease (has tax advantages) or as a loan
  • Can be structured with a delayed start to the payments
  • Documents Required:
    • Micro-fit Conditional Offer (they call this the “MicroFIT Application Approval”)
    • Business Plan (SWITCH calculator from iSolara would be acceptable)
    • Installers Purchase Estimate
    • Credit check
    • Businesses: two years of financial statements