Stories of Technology, Innovation, & Entrepreneurship in the Southeast

As noted in this teknovation.biz article from last week, the Tennessee Advanced Energy Business Council (TAEBC) and the University of Tennessee’s Spark Innovation Center have partnered with the Los Angeles Cleantech Incubator (LACI) to provide Tennessee cleantech start-ups with additional sources of debt capital to support their growth.

Yesterday, LACI held a webinar to describe the two components of its debt fund, describe when and how the two might benefit cleantech start-ups, and outline how companies can apply. The event featured Hyder Shuja, Senior Manager of the LACI Cleantech Debt Fund, who noted that the “cost of equity is generally higher than the cost of debt.”

LACI offers two products with somewhat different but complementary purposes.

• First Customer Financing is targeted at cleantech companies with under $1 million in revenue who have just secured their first customer, as the name implies. It provides between $25,000 and $100,000 of funding at a 9 percent interest rate with a 1.5 percent closing cost. The recipient does not have to provide collateral for the loan that could last from three to 12 months and is paid at the end like a balloon note.
• The Working Capital Loan ranges from $50,000 to $250,000 for a 12- to 36-month period. It does require collateral from the business and has the same interest rate and closing costs as the First Customer Financing program. It is designed for companies that have less than $5 million in revenue with a floor of $100,000 per year revenue run rate. This option requires monthly payments like a mortgage on a home.

Those from the local region who are interested in being considered for the debt fund should contact either Cortney Piper with TAEBC or Carol Seamons with Spark.

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