Equity Bridge Financing: Fast Capital While You Wait for Equity Drawdowns

Equity bridge financing (EBF) is a short-term loan facility provided to project sponsors or SPVs to cover initial costs while committed equity funds are pending disbursement. It is a tool designed to reduce delays, accelerate mobilization, and enable early-stage procurement before final equity injections or fund calls take place.

In large-scale infrastructure, real estate, and energy projects, EBF provides the cash runway needed to maintain momentum—without diluting equity or waiting on administrative fund release processes. Financely structures and sources equity bridge facilities from banks, private credit funds, and alternative lenders globally.

1. What Is Equity Bridge Financing?

• A short-term, senior-ranking facility secured by the right to receive committed equity contributions.
• Used to cover pre-FID costs, early works, mobilization advances, or deposits.
• Typically repaid once equity is drawn, called, or transferred by shareholders or fund investors.

2. When Equity Bridge Loans Make Sense

• Sponsor equity is committed but not yet disbursed due to fund governance or milestones.
• The SPV needs to initiate procurement, land payments, or early contractor obligations.
• Government approvals are secured, but financial close is delayed.
• Capital calls from LPs require notice periods or investor liquidity cycles.

3. Common Use Cases

• Energy projects: Covering deposits on turbines, PV panels, or grid connection fees.
• Real estate developments: Land acquisition, site clearance, or early contractor agreements.
• Logistics and industrial: Ordering long-lead equipment or locking in early pricing.
• Fund GPs: Bridging LP capital calls while managing liquidity and IRR smoothing.

4. Security and Collateral

• Assignment of equity commitment letters or shareholder resolutions.
• Pledge over equity interests in the project SPV or holding entity.
• Step-in rights, control accounts, and payment waterfalls.
• Sometimes backed by a corporate guarantee from the sponsor or fund manager.

5. Key Features of Equity Bridge Facilities

• Loan Tenor: 6 to 24 months.
• Size: Typically 10–30% of total project equity requirement.
• Repayment Source: Equity injection, fund drawdown, or project-level refinancing.
• Interest Rates: Higher than senior debt but lower than mezzanine.
• Disbursement: Often milestone-based with drawdowns linked to project needs.

6. Structuring Considerations

• Documentation – Clear evidence of committed equity or callable capital is essential.
• Drawdown Triggers – Tied to permits, EPC progress, or escrow conditions.
• Exit Strategy – Should align with timing of equity availability or refinancing plan.
• Intercreditor Position – If used alongside other lenders, rights must be coordinated.

7. How Financely Helps

• Assessing equity commitment structures and shareholder capacity.
• Modeling repayment flows and stress-testing against equity timing scenarios.
• Preparing lender pitch decks and supporting documentation.
• Sourcing term sheets from global credit funds, banks, and structured lenders.
• Negotiating pricing, covenants, and collateral terms.

8. Typical Financely Mandate Timeline

1. Submit investor commitments and funding plan via our intake form.
2. Engagement begins with an underwriting review and fee-based proposal.
3. We issue a term sheet reflecting deal parameters, security, and expected pricing.
4. Lender sounding and shortlist selection completed within 2–4 weeks.
5. Facility documents prepared, negotiated, and closed—timeline: 30–60 days on average.

9. Example Facility Structures

9.1 – 100 MW Solar + Storage Project (East Africa)

• EBF: $8 million secured against sponsor equity commitments and MOU with DFI equity fund.
• Use of proceeds: Grid interconnection fees, early procurement, legal costs.
• Lender: UK-based credit fund with African project track record.
• Repayment: Drawdown of DFI equity tranche after milestone completion.

9.2 – Logistics Real Estate SPV (Portugal)

• EBF: €5 million bridge backed by fund capital call and GP co-investment.
• Use of proceeds: Land acquisition and zoning expenses.
• Repayment: LP disbursement scheduled within 90 days.
• Security: Pledge of SPV shares, sponsor guarantee, control account.

10. What Lenders Want to See

• Legally binding equity commitment or callable fund terms.
• Track record of the sponsor, fund manager, or corporate guarantor.
• Credible use of proceeds, aligned with project milestones.
• Jurisdictional enforceability of security and governance rights.
• Exit strategy with timing certainty—either contractual or market-driven.

11. Who Should Use EBF?

• Developers with strong backers but administrative or fund process delays.
• Funds that want to smooth IRR and capital call frequency.
• Projects at FID or post-permitting stage with urgent disbursement needs.
• SPVs looking to show “skin in the game” before inviting long-term debt.

12. Financely’s Minimum Requirements

• Project size: Minimum $10 million total capex.
• Bridge size: Minimum $2 million request.
• Jurisdictions: EU, US, UAE, UK, Sub-Saharan Africa, LATAM, Asia-Pacific.
• Documents: Equity commitment letters, model, use of proceeds schedule.
• Engagement: Intake form + underwriting fee to begin structuring.

Request Equity Bridge Financing

If you’ve secured equity commitments but need short-term capital to move your project forward, Financely can help structure and raise an equity bridge facility tailored to your needs.

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Financely does not provide guarantees or lending itself. All facilities are subject to third-party lender underwriting, legal documentation, and regulatory compliance in applicable jurisdictions. We do not accept crypto or unofficial payments.