What are the fee arrangements between Loan Guarantee applicants and their professional advisors?
As a matter of policy, the Department of Energy strongly disapproves of fee arrangements with financial and/or other professional advisors to loan guarantee applicants that provide for payment of a contingent fee computed as a percentage of the amount of a loan guarantee issued by the Department (or of the underlying loan). Generally, the Department will require restructuring of any such fee arrangement as a condition to the issuance of a loan guarantee. Fees that are computed on other terms, such as a fixed fee or a time and materials fee, but payable only at closing, are acceptable. Applicants are advised to structure, or, if necessary, restructure, their fee arrangements accordingly, and to clearly disclose in their financial model the basis of computation of all advisory fees to be paid in connection with the project.
