More money coming for region’s cleantech start-ups
The Los Angeles Cleantech Incubator's Cleantech Debt Fund will now be open to Tennessee start-ups thanks to partnership with the Tennessee Advanced Energy Business Council and UT's Spark Innovation Center.
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.
The new partnership will draw on LACI’s Cleantech Debt Fund, a first-of-its-kind green loan program to grow early-stage cleantech start-ups to accelerate equitable climate action. It is a $6 million debt fund that will provide first customer and working capital financing options between $25,000 to $250,000 at nine percent interest to roughly 100 start-ups over the next five years.
Also, unlike most traditional bank loans, the LACI Cleantech Debt Fund will not require founders’ personal collateral or credit scores in underwriting.
“Forward-thinking funds like the LACI Cleantech Debt Fund enable early-stage energy companies to gain traction and create economic development wins for our local communities,” said Cortney Piper, TAEBC Executive Director.
TAEBC has been working with LACI since 2020 as part of the Transportation Electrification Partnership. The statewide organization and the Spark Innovation Center also joined LACI’s National Coalition of Clean Energy Incubators to rally congressional support for cleantech innovation and signed on to a $150 billion stimulus proposal to advocate for more jobs and investment in the electric vehicle industry.
“Funding cleantech start-ups in Tennessee will create high-quality jobs in the advanced energy sector and foster the growth of advanced energy technologies,” Piper said. “Advanced energy has a clear track record of driving economic growth in Tennessee. According to our 2021 Advanced Energy Economic Impact Report, advanced energy contributed $45.8 billion to our state GDP and employed nearly 394,00 Tennesseans.”
Matt Petersen, Chief Executive Officer of LACI, said the Cleantech Debt Fund will also help reduce barriers to capital for underserved founders from historically underrepresented communities, including female founders and founders of color.
“Too many founders cannot access traditional bank financing as they lack adequate personal assets, or the personal networks needed to secure early-stage investment,” Petersen said. “We created the LACI Cleantech Debt Fund as a new tool to give early-stage cleantech founders a timely, affordable alternative to expensive venture capital and slow-moving bank debt.”
LACI will host a virtual information session at 1 p.m. EDT on May 31 for cleantech start-ups and founders to learn more about LACI Cleantech Debt Fund’s financing options and the application process. Those interested can register here. To be eligible for funding, Tennessee start-ups must be recommended by TAEBC and the Spark Innovation Center.
Applications will open in June.
