Financial Advice Specification Guidance
As part of this Framework, EST asked all firms to confirm their eligibility to provide advice on the activities
described below. Where firms are not authorised this has been stated.
It is anticipated that successful contractors will be required to carry out a number of different activities which
will be specified by the CARES applicant when they engage with the Framework. We have listed some
examples below:
Financial viability of projects:

Early stage financial modelling of projects through to the production of a professionally indemnified
assessment of proposed capital and operating costs and associated project lifecycle cash flows,
including loan life coverage ratio, debt service cover ratio analysis and sensitivity analysis on the main
financial variables (e.g. capital cost, size of scheme, operating costs, cost of capital, revenue rates and
any variable interest rates).

Modelling cash flows and profit & loss sheets during and after the development and construction of the
project and ensure there is enough cash available to complete the project. Note: CARES has
produced a financial model template that is based on inflation adjusted cash flows, profit and loss (with
depreciation) and provides balance sheets for the life of the project.

Develop or support the development of business plans for the project.
Structure of project entities*

Advice and support on the development of appropriate efficient structures for relevant community
projects on public and private land.

Advice and support to set up financially efficient entities to bring forward or engage in renewable
energy developments (wholly owned, joint ventures partnerships, community investment vehicles and
community benefit receipt).

VAT registration of project vehicle where applicable.

Relevant tax advice relating to structure of entity.
Analysis of investment opportunities in commercial developments*

Provision of analysis of investment memorandum / prospectus documents that may be issued by a
developer for a commercial investment opportunity including risk analysis for community group over the
lifetime of the project.

Investment advice on all the options available to them when investing in a project with a clear indication
of the risks and rewards of all options.

Provide a report to include any recommendations that are to be made to the group.

Ensure the group is well placed and supported to manage their investment scheme over the longer
term.
Expected outputs would include

A report on the investment opportunity, including detailed analysis of the investment, a summary of the
benefits and risks and sources of funding available to the group. The report should include the
recommendations made in the project.

Financial modelling of the group’s investment over the lifetime of the project.

A presentation on the investment opportunity delivered to the community group wishing to invest in the
projects.

A report on the financial returns to the community group annually and over the lifetime of the project,
depending upon the different sources of funding available including the levels of risk and reward.
Securing funds*

Assist the community group or secure funds to give the community group capital to invest or fund
project through to project construction.

Review and advising on potential funding sources and their compliance with FIT and other relevant
incentive mechanisms.

Show awareness and demonstrate understanding of the requirements of banks and financing
institutions so that the project can be presented to these institutions in the required manner.

Reviewing and appraising the appropriateness of innovative finance structures such as community
share offers through BenCom and bona fide cooperatives (IPS), debentures, crowd equity funding or
communities investing in other communities to take forward projects.
Working towards financial close

Support the project towards achieving successful financial close.

Produce information required as part of any fund application for capital costs to a standard required by
the lender.

Work with the groups to become finance ready / investment ready.

Advise community groups /negotiate on ability of late stage development costs to be rolled up into
financial close package.

Liaising with project lenders if appropriate.
Ongoing operation and fund management

Advice on management of resulting funds from community benefit, community investment in
commercial development or community owned projects.
In all cases:

Introductory meeting/call with the community group to assess needs and preferences, as well as agree
ways of working, timeframe, logistics etc.

Agree scope of work for the duration of the ‘project.

Regular progress reports and close liaison and cooperation with organisation.

Engage and work with other necessary advisors which may be involved in the project.
*Please note
Certain financial activities are regulated under The Financial Services and Markets Act 2000. Provision of advice relating to analysis of
investment opportunities in commercial developments and securing funds are likely to be regulated activities.
The Financial Conduct Authority provides authorisation for firms to carry out regulated activities.
Exemption from authorisation can be provided through membership of certain professional bodies.