Compare Contract Financing to Traditional Funding

Who, What, Why, How of Contract Financing

WHO can benefit from Contract Financing?

Literally, there are thousands of small companies – ranging from long lived to emergent - that either have or are working on contracts with investment grade credits. These companies could use your help to provide desperately needed capital to complete their contracts.

More About Contract Financing

WHAT is Contract Financing?

Our Contract Financing (or monetizing) is a very flexible financial tool providing a number of capital options - much less expensive and onerous than equity or sub-debt.

So long as there is an equipment component,contract financing can be used to:

Acquire equipment necessary for the fulfillment of a service contract
May provide much needed working capital to run your business and/or develop infrastructure to facilitate the contract services
Refinance existing equipment and improve cashflow
Accelerate contract revenues
As an entre’ to repeat business

Each transaction is a custom product designed to meet the needs of you and your customers.

We provide contract financing for just about any contract where a component of equipment is necessary to complete the contract. There is a provider (usually a smaller company) and an end user (investment grade). The term of a Contract Finance can be as short as 12 months, or as long as 10 years.

This product has a variety of applications and has worked successfully with:

Service Agreements
SOWs
Warehouse Agreements
Management Agreements
Distribution Agreements
Muni Contracts of $5 Million and over
Federal Contracts of $10 Million and over

Recent Examples of Contract Financing

WHY can the Contract Finance product be valuable to you and your customers?

Our Contract Finance deals are averaging close to $6 million per transaction (although we have a number of contracts in various stages of process that would dramatically increase that average). This form of financing could be extremely valuable to smaller companies that don’t have the resources to buy equipment or adequate working capital. In many cases, it can be used as an alternative to equity or to augment existing equity in the provider company. In fact, many smaller companies do not bid large contracts for fear that they will be unable to fulfill them because of a lack of capital. The equipment necessary to fulfill a contract can be existing equipment that is refinanced or sold and leased back, or brand new equipment that is located at either the provider’s or the end user’s location. These need not be a new contract to qualify for Contract Finance. We can monetize the remaining balance/term of an existing contract.

Frequently Asked Questions

HOW does Contract Financing work?

We will work with your customer and provide language, which is embedded in the contract via addendum, that will allow us to take an assignment of all or a portion of the future revenues. A present value of those revenues will give your customer the capital they need to complete the contract. In many instances, we are able to provide a present value consisting of even more than the essential capital needed to acquire the equipment, injecting much needed working capital.

Case Study of an Unlikely Deal

Program Requirements