Generally speaking, if you receive a preliminary financing offer from Wunder, this means that after a basic review of the information you provided, we think your project could be a good fit for Wunder financing. The details in your offer provide an idea of the types of rates and terms you might be approved for. However, it is important to note that preliminary offers are just that - preliminary.
As you move through the diligence process, you will be asked to provide more specifics about the organizations involved, the contract details, and expected operating costs. This process will lead us towards a better understanding for the project and will give you a better idea of what to expect in a final offer.
Below you will find answer to common questions we get asked about the contents of this preliminary offer and what to expect at this stage in our process:
How did you come up with my loan amount?
Wunder has established in-house underwriting criteria that determine a project’s eligibility and loan offering amount. While many factors play a part in Wunder’s ultimate lending decision - system economics, engineering specifications, project cost, site, actor stability, and more, the offered loan amount is most heavily influenced by the expected cash flows of the system. Wunder loans are typically sized to ensure that revenue from the system exceeds the required annual debt payments throughout the term of the loan.
Wunder loans are designed to offer the maximum amount of financing while simultaneously ensuring customers save money from day one. If Wunder is unable to offer the full requested loan amount, it is typically because your customer’s loan repayment costs would exceed the system’s savings.
What if the project details change?
If any of the details of your project change significantly after receiving your preliminary offer, please let us know in writing and we will determine if there is an opportunity to provide you with an updated loan offer.
For example, if you initially submitted a 100kW project with an annual system production of 120,000 kWh, but the latest estimates show the system producing 150,000 kWh, email us the change in writing, and we will generate an updated loan offer.
What is a mini-perm?
Some Wunder offers are for mini-permanent (mini-perm) debt. This means that while the loan term may only be 5-10 years, the amortization schedule may be up to 20 years. A mini-perm loan offer benefits from lower monthly payments, which help the project’s cash flows remain positive throughout the duration of the loan. At the end of the loan term, a bullet payment is due for the outstanding principal amount (identified as the ‘Principal Due at Maturity’ on your offer). This payment is required in full and is not optional. If it is not paid upon the contracted date, your customer will be in default.
It’s important to note that most mini-perm products are designed with the expectation that the mini-perm loan will be refinanced at or prior to the loan’s maturity date. As a result, the borrower may not need to come off balance sheet to cover this bullet payment.
What is a contracted prepayment?
Some Wunder offers contain contracted prepayments. One of the important aspects in the way Wunder sizes debt is appreciation for expected project cash flows. Contracted Prepayments are one of the mechanisms that allows debt service to be aligned with expected project revenue.
For example, if a project benefits from rebates, contracted prepayments may be included so that the financing is paid off more quickly, ultimately saving the borrower money down the road.
It’s important to note that these contracted prepayments are required, and not optional.
What does non-recourse mean?
Generally speaking, Wunder focuses on non-recourse lending. This means that Wunder loans are collateralized with the solar system (i.e. the solar equipment and any contractual attributes like SRECs or FiT payments associated with the project). While many lenders require all-assets liens or personal guarantees to secure their financing, Wunder generally focuses on the value of the solar system itself, leaving the rest of your business, personal credit, and property free of encumbrances that could limit your ability to borrow in the future.
Will you need a personal guarantee?
No. With few exceptions, Wunder does not require personal guarantees, all-asset liens, property liens, or mortgage lender consent forms. Wunder’s Loans are generally secured exclusively by the solar systems themselves.
How do we use Wunder financing to cover project costs?
Loan capital will be disbursed directly to the payee in response to a project invoice. Any difference between available Wunder funds and total project costs will have to be covered by the system owner. Please refer to the Capital Disbursement article for more information about requesting and receiving Wunder loan funds.
What happens next?
If you or your customer are ready to pursue Wunder financing, the first step is to return a signed Preliminary Loan Offer to your Wunder representative. We'll then request a number of project and borrower documents that will kick off the diligence process. In order to enter the diligence phase, your project should be developed enough that project specifics are largely nailed down and minimal movement in design, sizing, location, etc. is expected. If your project is not yet at this stage, we'd still like to know that you intend to pursue the financing offer but will not be able to provide multiple iterations of the offer or begin the data verification process until system details have been finalized and a signature has been obtained from the customer.
Refer to Project Documentation Requirements for more information about the what information will be requested in the diligence phase.