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.
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:
1. Acquire equipment necessary for the fulfillment of a service contract
2. May provide much needed working capital to run your business and/or develop infrastructure
to facilitate the contract option
3. Refinance existing equipment and improve cashflow
4. Accelerate contract revenues
5. As an entre’ to repeat business
Each transaction is a custom product designed to meet the needs of you and your customers.
Contract financing is 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:
1. Service Agreements
2. Warehouse Agreements
3. Management Agreements
4. Distribution Agreements
5. Muni Contracts
6. Federal Contracts
Where Contract Finance Deals Come From
1. Commercial Bankers
3. Investment Bankers
4. Private Equity Groups
5. Merchant Bankers
6. Venture Capital Firms
7. Service Providers
9. IT Consultants
10. Forums Where Companies Needing Equity Are Showcased
11. Factoring Companies
12. Accounts Receivable Companies
What is the Value and Who Benefits from Contract Financing?
This form of financing could be extremely valuable to smaller companies that don’t have
the resources to purchase equipment or adequate working capital to service the contract.
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. The contract can be monetized
for the remaining balance/term of an existing contract.