Lockbox Accounts

As of 2019,  Wunder Capital uses collection accounts, or lockboxes, for all project cash-flow management. A lockbox is a digital bank account that is accessible via Wunder’s Borrower Platform. Lockboxes are a common financial tool used by project lenders to allow for shared access and visibility into project funds. Your Wunder lockbox will receive all project revenue and then distribute the funds to eligible recipients according to the loan and project contracts.

Lockboxes are commonly used mechanisms in the equipment finance space. In addition to providing Wunder with increased visibility into a project’s cash flows, Lockboxes directly address concerns around triggering recapture for third-party tax equity investors. A lockbox allows Wunder Capital to exercise control over the account and its cash-flows, without triggering recapture in a downside scenario.  

HOW DOES IT WORK?

1. Account Creation

After contracting, you will work with Wunder’s Funding team to setup and configure a lockbox in Wunder’s system. Typically, this involves collecting some additional information about the ownership structure of the borrowing entity, as well as EIN, Articles of Incorporation, and other business documentation that might still be outstanding at the time of contracting. If you’ve contracted a loan with Wunder before, we’ll be able to leverage your firm’s existing information on-file with Wunder and will only require items specific to the new project.

2. Defining Recipients

You will also need to let Wunder know which service providers are expecting to be paid out of project proceeds and you will work with the Wunder team to define a priority order or “waterfall” of fund recipients. Generally speaking, recipients should represent any ongoing payments that were included as an operating expense in Wunder’s project modeling (e.g. O&M, Site Lease, Insurance, Tax Equity partner payments). You’ll need to provide Wunder with information about how and when these service providers or partners are expecting to be paid.

3. Directing Revenue

Wunder’s security interest in the lockbox depends on our confidence that project revenue is being received  directly into this account. To achieve that goal, you’ll need to confirm that you have appropriately directed energy payments (and any incentive revenue) into the account. This can be done by including appropriate lockbox payment information on PPA invoices or other requests for payment. Once your lockbox is set up, you will be able to access the lockbox’s account and routing number by logging into the Wunder Borrower Portal.

4. Billing and Fund Distribution

Borrowers will be able to access lockbox balance and transaction information via the Wunder Borrower Portal at any time. As revenue is received, it will be deposited into the collection account, increasing the cash balance. As eligible operating expenses are incurred, they will be recorded against the relevant recipient. On a monthly basis (generally on the same day as your loan’s Billing Day) available cash in the lockbox account will run through the prioritized recipient list, looking for outstanding obligations and using the lockbox cash balance to pay them. One such obligations will be your Wunder loan payment. Typically, the borrower is the last member of the recipient list and receives all remaining cash at the end of this event.

If the cash balance in the lockbox is not large enough to cover a payment to an external party, Wunder will pay $0 to that recipient and notify you of the outstanding obligation (to be paid out of another account under your control). If the cash balance in the lockbox is not large enough to cover a Wunder loan payment, Wunder will withdraw as much as is available and charge the Backup Payment Account (a connected, borrower-controlled bank account) the remaining balance.

FREQUENTLY ASKED QUESTIONS

DOES WUNDER OWN THE ACCOUNT?

No. Our borrower owns the account, and Wunder manages it. Wunder’s “Custody Account Agreement” articulates the rules by which the account will be governed and the bank’s commitment to service of the account. It also explicitly identifies Wunder as the agent of the account and acknowledges that the account is the loan collateral per the executed Loan and Security Agreement.

HOW WILL I SEE MY ACCOUNT INFORMATION?

Any member of the borrower organization with access to the Wunder portal will be able to view the balance and transaction history of the collection account. As soon as the lockbox is connected to the project, all users of the borrower organization will see a lockbox module on the Project Page of the Borrower Portal. Click on your lockbox module, and you will be taken to a lockbox page that shows your account balance and transaction history. You will also be able to view the ‘configuration’ or ‘prioritized recipient list’.

WHAT IF THERE IS NOT ENOUGH CASH IN THE LOCKBOX?

If the cash balance in the lockbox is not large enough to cover a payment to an external party, Wunder will pay $0 to that recipient and notify you of the outstanding obligation (to be paid out of another account under your control). If the cash balance in the lockbox is not large enough to cover a Wunder loan payment, Wunder will withdraw as much as is available and charge the Backup Payment Account (a connected, borrower-controlled bank account) the remaining balance.

WHICH PAYMENT METHODS DOES WUNDER CAPITAL SUPPORT FOR LOCKBOXES?

Payments being made into the lockbox can be made via wire or ACH to the lockbox account and routing number, or via check written out to the borrowing entity and mailed to the address listed below. If revenue is being received by check, checks should be written out to the legal borrowing entity and mailed to the following address:

[Owner/Borrower Legal Name]
9450 SW Gemini Dr #65943
Beaverton, Oregon 97008-7105 US

Payments out of the lockbox will always be made via wire transaction.

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