Spring Lane Capital is pioneering the use of project financing in the textiles innovation sector to promote sustainability. In collaboration with Fashion for Good, they aim to address funding gaps for emerging textile startups during the commercialization phase. They offer industry stakeholders insights into the benefits of project financing for their green-focused ventures.
Katrin Ley, Managing Director of Fashion for Good, stresses the importance of educating innovators about project financing and promoting collaboration among brands, supply chain partners and financiers to tackle textile industry challenges. Project financing, which secures funds for specific projects using project assets as collateral, creates a separate entity with its creditworthiness linked to project assets. Jordan Kasarjian, an associate at Spring Lane Capital, highlights its value for smaller corporations in need of structured funding methods.
Project financing offers several advantages to startups, particularly the retention of strong ownership, as the assets of a specific project serve as collateral, preventing equity dilution. But it only works when innovators can show that their project is ready for business.
Within their partnership, Spring Lane Capital is actively exploring opportunities to invest in sustainable textiles projects. They are extending their previous experience in project financing within various sectors like food, waste, energy and transportation. Notably, project financing investments can vary widely in size, from a few million to several billion dollars. Spring Lane Capital’s goal is to bridge the financial divide between smaller venture capital investments and larger institutional investments.
With textile technology innovations maturing and shifting towards full-scale commercial deployment, entrepreneurs are urged to explore alternative financing. Frans Jooste of Fashion for Good emphasizes early consideration of project financing, recognizing its often-lengthy timeline, exceeding startup norms and the need for advanced planning for success.