GLC helps raise capital for our clients under the best possible terms through Source Capital Group, a registered FINRA/SEC broker-dealer.
Funding middle market infrastructure projects with alternative sources of capital. - Tim Schwarz
Municipal project financing with private funding sources and sale-leasebacks. - Chris Smith
Fact. Drive across the country, or even around the block, or take local public transportation almost anywhere and it is clear that the need for infrastructure investment is at an all time high. In the US alone it is estimated that $4 trillion needs to be invested over the next 10 to 15 years. $4 Trillion! And every year that number is growing.
Problem. The recent financial crisis has had a significant impact on the traditional sources of capital to fund these investments. In the private sector, there has been a meaningful contraction in the number of global financial institutions that historically have provided this infrastructure project financing. Those that remain are tightening credit criteria as they try to repair balance sheets strained by the crisis, leaving behind an increasing number of extremely attractive small to mid-sized projects that are looking for financing outside of the banking sector. In the public sector, across the spectrum Federal, State and Local budgets are being cut, and desperately need to tap private capital sources to meet their growing funding gaps.
Solution. Think of this analogy…15 years ago 80% of all cars were purchased and 20% were leased. Today it’s the exact opposite: 80% of cars are leased because no one wants to tie up their capital. Don’t own assets and tie up crucial capital, just pay to use them.
Our approach is simple and elegant… tap into our clients’ under-recognized fixed assets and physical plants to provide low-cost capital…quickly. It’s a win-win…our clients retain ongoing use of their critical fixed assets and we help monetize them, largely through off-balance sheet structured financings.
Bridging the funding gap… In certain instances we have been able to achieve 100% financing for the total cost of the project. For private sector new build transactions, this reduces the required equity contribution and significantly improves over-all returns to the developer. For public sector deals, this can eliminate the need for new bond issuances to fund desperately needed capital projects.
Who are our clients?
Simple…nearly any company, state or local government that currently has “equity” in their assets and is seeking creative structured or project financings.
While our financial solutions have broad applicability, we have particular expertise in select markets-
Education Infrastructure. Higher educational institutions are not immune to the challenges presented by the financial crisis. Shrinking endowments, reduced charitable donations, and most importantly reductions in state and federal funding are all having serious impact. At the same time, many public universities are experiencing an increase in enrollments. As a result, many universities are suffering from the need to expand and repair their infrastructure at exactly the same time as traditional funding sources are being cut. We have developed a variety of services and financial solutions that help these universities address this growing problem.
Transportation and Logistics. The global shipping industry accounts for roughly 90% of all international trade and is a crucial link in the global economy. The worldwide recession has impacted the industry in two ways- reduced overall demand and negatively impacted most of the traditional funding sources. Notwithstanding, higher fuel costs, environmental regulation and other market forces are pushing many leading transportation companies to want to upgrade their existing infrastructure. This is especially true in the shipping market. By working with key institutional partners, we are able to find crucial financial solutions for this key market sector.
Regional Municipal Infrastructure. The financial crisis has had a devastating effect on state and municipal governments across the country. However, basic local infrastructure – bridges, roads, water treatment facilities, gas and electrical distribution systems, and schools still must be upgraded and replaced, or local services can begin to deteriorate rapidly. Utilizing sale-leaseback and other alternative solutions, we are assisting many of these organizations address these types of infrastructure needs without tapping into the tax base – a major benefit in today’s economic environment.
Power and Alternative Energy. The power and alternative energy sector is an extremely large, highly regulated industry that is undergoing dramatic change as companies respond to the shifting landscape of state and federal regulations, public sentiment regarding climate change, energy independence and the economic impact of dramatic shifts in long-term projections for commodity prices. We are focusing our efforts on projects where there is support of the project through long-term power purchase agreements. We have an extensive network of developers and engineering and construction companies in the power and renewables sector that allow us to deliver complete financial and strategic solutions to our clients.
Currently we are involved in a variety of infrastructure related projects in these sectors. Examples include the off -balance sheet financing of 100% of a new gas fired generating facility for a regulated public utility; the financing of a new water treatment facility in the southwestern US; the construction of a sports/entertainment complex in a major metropolitan market and the financing of several new container and LNG tankers.
Please contact Bill Sprague
Please contact Tim Schwarz
Please contact Chris Smith