In addition to the eligibility requirements indicated in the Applicant Screener, all projects or transactions considered for OPIC financing must be commercially and financially sound. They must be within the demonstrated competence of the proposed management, which must have a proven record of success in the same, or a closely related business, as well as a significant continuing financial risk in the enterprise.
Experience has shown that an adequate level of equity contribution is essential for a project to succeed. Investors must be willing to establish sound debt-to-equity relationships that will not jeopardize the success of the project through excessive leverage. In general, OPIC looks for a debt-to-equity ratio in the range of 60/40, although the financial structure will vary with the nature of a specific business and by the variability of expected cash flows.
The investor’s financial plan should provide for all costs, including feasibility studies; organizational expenses; land; construction; machinery; equipment; training and market development expenses; interest payments during construction; start-up expenses and initial operating losses; legal expenses and loan fees; and adequate working capital.
Since OPIC supports private sector investments in financially viable projects, OPIC does not offer concessionary terms usually associated with government-to-government lending or grant-type financing, nor does it offer financing of export sales unrelated to long-term investments in overseas businesses. To learn more about export finance programs, please contact the U.S. Small Business Administration’s Office of International Trade or the Export Import Bank of the United States.