Wunder Capital Overview
Business in the US solar market is booming. Growth is both strong and accelerating. But, as has been frequently reported, most of this growth has occurred in the residential and utility-scale market segments. Why is there slow growth in commercial?
Comparatively anemic growth in commercial solar is due in large part to limited access to affordable capital, an issue especially true for smaller commercial projects (less that 200 kWdc in size). Frankly, large institutional capital sources do not yet know how to think about this asset class and as a result, most of the lending for these types of projects ends up being done by local banks and credit unions who are making traditional loans based on the business principal’s credit and general business assets.
However, Wunder Capital, sees this as a business opportunity. Rather than trying to convince traditional lenders to move into the space, Wunder Capital built its own platform for financing solar projects and lets the returns speak for themselves. Based in Boulder, Colorado, Wunder allows accredited individuals, trusts, family offices, foundations, and hedge and pension funds to invest in the country’s new solar infrastructure. Wunder then aggregates these investments into funds, which are used to capitalize loans for small commercial solar.
To identify projects in need of finance, Wunder Capital goes straight to the source. Wunder has an expanding partner network of EPCs and developers currently working in 24 states. Wunder Capital keeps this network in the loop on new financing tools and strategies, and in return receives valuable feedback on what types of products would help them get more deals done. By understanding their needs, and working directly with them to solve financing issues, Wunder is facilitating the growth of solar and also helping partners grow into a profitable new market.
Most of the sub 200 kWdc projects Wunder Capital finances are built a handful at a time by EPCs and developers with significant residential or utility-scale experience looking to expand into the small commercial space. Wunder has gained numerous process efficiencies by working with partners that can bring multiple projects at a time and include Wunder in their project planning. Partnering with CivicSolar adds additional value to that model. As an established provider of solar equipment and services, Civic is already working with many of Wunder's current and prospective partners and thier partnership allows the financing process to go that much smoother.
Wunder currently offers two types of financing, Bridge and Term Loans. Bridge Loans were designed to provide partners with multiple projects under construction at once with working capital for development activities. Bridge Loan terms generally range from 3-12 months, depending on project needs, at 12-14% APR. Wunder's take-out financing, Term Loans, provide businesses going solar with an accelerated path to system ownership. Term Loans can also be used as the debt piece in a leveraged third-party ownership structure, like PPAs. These loans have 7-year terms with APRs generally falling in the 8-9% range.
Most of Wunder’s financing is collateralized with the solar project itself, so no all-asset liens or personal guarantees, and there are no prepayment penalties. In a Bridge Loan, this means EPCs can pay off their loan and stop paying interest as soon as term capital is available. In a Term Loan, borrowers can lower their monthly payments by making an early payment with a rebate or other benefits, or, if they find a better offer down the road, refinance at any time.