Flexible Capital Fund invests $600,000 in royalty financing to two growing Vermont companies

Northern Reliability and Pulmac Systems International join Flex Fund’s socially responsible investment portfolio to generate economic growth in Vermont renewable energy and natural resource efficiency sectors

Montpelier, VT – Janice St. Onge, President of the Flexible Capital Fund, L3C, announced today an investment of $600,000 in two Vermont companies to accelerate growth in the renewable energy and natural resource market sectors. Northern Reliability, a renewable and distributed energy systems provider located in Waitsfield, received a $400,000 royalty (revenue share) loan for permanent working capital. Pulmac Systems International, a testing equipment manufacturer for the pulp and paper mill industry based in Colchester, secured a $200,000 term loan plus royalty.

Northern Reliability designs and builds electric power systems on seven continents that equip off-grid applications with renewable energy while reducing fossil fuel dependence. Formed in 2007 by former Northern Power Systems (Barre) employees, Northern Reliability built a solid track record in engineering and product innovation to help customers become more energy independent. In early 2015, Jay Bellows was hired as CEO to increase sales efforts and energy storage solutions in the growing renewable energy market sector. The $400,000 Flex Fund investment will help Northern Reliability continue to ramp up sales and marketing efforts, hire new and maintain current employees, and support product development. Vermont clients include Northern Power Systems, Renewable NRG Systems, and Green Mountain Power.

Pulmac Systems International provides fiber testing, monitoring, and diagnostic tools to the worldwide pulp and paper industry. Pulmac has evolved over the past 50 years to address the changing needs of a fluctuating industry. New ownership earlier in 2015 is driving Pulmac to empower mills through technology to diminish waste and better utilize wood and recycled paper products in production, and to reduce energy requirements in paper production. The $200,000 Flex Fund term loan will assist Pulmac in completing a lab trial of their new FiberRouter™ data and equipment system and put into motion the next phase of testing, leading to purchases by pulp mills.  

“As a mission-driven lender, the Flex Fund’s commitment to our social-driven investors and Vermont communities is to help foster resiliency for both the companies we invest in and the environments in which they do business. Both Northern Reliability and Pulmac are moving us away from reliance on fossils fuels through renewables and energy efficiency,” says Janice St. Onge, President of the Flex Fund. “They are innovators in their fields and play important roles in the value chain facilitation important to the continued growth in the renewable energy, efficiency, and natural resource market sectors. The Flex Fund’s provides flexible risk capital to help finance operations so companies like Northern Reliability and Pulmac can grow without putting up additional collateral or making further changes to ownership structure.”

The 'flexible' financing offered by the Flex Fund is often referred to as royalty financing and is a loan instrument repaid based on % of sales over a fixed time period, rather than a monthly payment. It is an alternative to equity without requiring an entrepreneur to give up ownership or control of the company or having to provide collateral. Less expensive than equity, and more expensive than traditional debt, royalty financing is good for growing companies rather than start-ups, and offers technical assistance to complement its working capital loans. The Flex Fund is only Vermont Licensed Lender offering royalty financing and is fully capitalized to support Vermont working landscape businesses.  

“The Flex Fund’s proven track record with big success stories like Vermont Smoke and Cure speaks volumes to the Fund’s credibility and clout here in Vermont,” says Jay Bellows, Northern Reliability CEO.  “Our employees have over 30 years of experience developing energy storage systems—an otherwise emerging field worldwide—and that really sets Northern Reliability apart from the companies just starting energy storage initiatives. The Flex Fund’s investment allows us to grow our business development to further penetrate the market and insert our vast experience to provide solutions for the world’s energy storage needs.”

Pulmac CEO, Robert White adds, “As we develop our FiberRouter™ system, we have an opportunity to help our customers with their energy consumption, productivity and product quality. We needed a financial partner to help us fund product development and are very pleased that the Flex Fund saw the potential for a Vermont grown company like Pulmac to bring innovative concepts to a global industry steeped in legacy.”


The Flexible Capital Fund, L3C provides flexible risk capital in the form of subordinated debt and royalty financing to Vermont growth-stage companies in sustainable agriculture, food systems, forest products, renewable energy, and other natural resource sectors. The Flex Fund seeks a fair return on its financial investment, while being equally focused on the social and environmental impact borrowers have in building healthy food systems, re-localizing energy resources, and creating resilient communities. The Flex Fund is managed by the Vermont Sustainable Jobs Fund, a non-profit responsible for developing Vermont’s sustainable agriculture, renewable energy, and forest product businesses.