Contract Financing Term Sheet For Larger Commercial Contracts
Financely structures contract financing mandates for companies with USD 10,000,000+ in annual contract value. We underwrite the contract cash flow, test market interest, prepare the lender package and distribute the mandate to banks, private credit funds, asset based lenders, receivables investors and structured credit buyers seeking contracted-revenue exposure.
Mandate threshold: Financely works on contract financing mandates with at least USD 10,000,000 in annual contract value, recurring or non-recurring. Contract pools, repeat receivables and larger counterparties improve lender appetite.
Standard Operating Procedure
Request A Proposal
The company submits its transaction and pays the USD 500 RFQ review fee. Start here to request a contract financing proposal.
RFQ Review And Market Sounding
Financely reviews the contract file, buyer profile, use of proceeds, payment route and collateral. The RFQ includes external consultation to test lender interest before a full ABL engagement is issued.
ABL Engagement And Retainer
If the file passes screening, Financely issues the ABL engagement letter. After retainer payment, we begin KYT, KYC, underwriting and lender distribution.
Lender Distribution
The mandate is distributed to lenders seeking exposure to the borrower profile, contract type, receivables profile, jurisdiction and expected tenor.
Term Sheet Auction
Lenders submit indicative or formal terms. Financely helps compare price, advance rate, tenor, collateral, covenants and closing conditions.
Closing And Funding
The borrower accepts the most favourable executable deal, completes documentation, satisfies closing conditions and receives funding.
Types Of Contract Financing
Receivables-Backed Facility
Working capital advanced against eligible receivables, contract proceeds, borrowing base availability and controlled collections.
Purchase Order Finance
Supplier, inventory, production or logistics finance against signed purchase orders and a verified delivery plan.
Milestone Advance
Funding against contracted milestones, EPC progress payments, service delivery claims or accepted work certificates.
Warehouse Line
Revolving or term funding against diversified receivables, recurring invoices or contract pools with periodic borrowing base reporting.
Receivables Securitization
SPV-based financing for larger receivables pools with investor reporting, waterfall design, servicer logic and pool analytics.
Profit Share Or Equity-Linked Capital
Hybrid structures where lenders or investors receive interest plus contract profit share, warrant coverage, preferred equity or equity upside.
Indicative Pricing And Economics
| Structure | Indicative Pricing | Typical Use Case |
|---|---|---|
| Senior Receivables ABL | SOFR / EURIBOR / SONIA + 3.50% to 8.00% p.a., or equivalent all-in floating-rate pricing. | Stronger borrowers, eligible receivables, creditworthy buyers and controlled collection accounts. |
| Private Credit Contract Loan | 10.00% to 18.00% p.a. all-in, depending on jurisdiction, buyer quality, collateral and delivery risk. | Contract-backed term loans, bridge facilities, project delivery finance and bespoke working capital. |
| Purchase Order Finance | 1.25% to 3.50% per 30 days, often charged as transaction finance rather than ordinary annualized debt. | Pre-delivery supplier payments, inventory procurement, manufacturing and logistics execution. |
| Milestone Advance | 12.00% to 22.00% p.a. all-in, or milestone discount pricing where repayment is tied to accepted work. | EPC, services, infrastructure, government supply, maintenance and progress-payment contracts. |
| Warehouse Line | SOFR or equivalent base rate + 4.00% to 10.00% p.a., plus unused line, monitoring and reporting fees. | Recurring contracts, receivables pools, invoice portfolios and multi-obligor borrowing bases. |
| Receivables Securitization | Senior tranche pricing may be lower than whole-loan private credit where the pool is diversified, serviced and reportable. Structuring cost starts at USD 100,000. | Larger contract pools, recurring receivables, diversified obligors and scalable structured credit placements. |
| Profit-Share Finance | Base coupon plus 5.00% to 25.00% share of contract gross profit or defined project profit, subject to negotiation. | Higher-margin contracts where ordinary debt capacity is limited and investors need upside participation. |
| Equity-Linked Capital | Preferred return, warrants, conversion rights or minority equity participation. Economics quoted case by case. | Complex mandates, thin collateral, high-growth contract pools, platform expansion or strategic investor appetite. |
Pricing notice: Indicative rates are non-binding. Final pricing depends on lender appetite, base rates, buyer credit, borrower financials, collateral, jurisdiction, contract enforceability, repayment control, tenor and closing risk.
Indicative Term Sheet
| Term | Indicative Position |
|---|---|
| Product | Contract financing, contract monetization, receivables-backed ABL, PO finance, milestone finance, warehouse lines, securitization, profit-share finance or equity-linked capital. |
| Minimum Contract Value | USD 10,000,000 minimum annual contract value, recurring or non-recurring. |
| Eligible Contracts | Signed contracts, purchase orders, offtake agreements, framework agreements, government contracts, EPC contracts, supply contracts, service contracts, milestone payments and receivables pools. |
| Use Of Proceeds | Supplier payments, inventory, mobilization, production, payroll, logistics, equipment, project delivery, receivables bridge, contract ramp-up and refinancing of contract-linked working capital. |
| Repayment Source | Contract proceeds, buyer payments, assigned receivables, milestone receipts, invoice collections, offtake payments or diversified contract pool cash flows. |
| Collateral And Security | Receivables pledge, assignment of proceeds, account control, inventory security, contract rights, equipment liens, insurance assignment, escrow, borrower guarantees or other available security. |
| Advance Rate | Case by case. Senior receivables facilities may advance higher percentages against eligible receivables. Pre-delivery and thin-margin structures are usually more conservative. |
| Tenor | Matched to the contract cycle, purchase order cycle, milestone schedule, receivables aging, warehouse period or securitized pool maturity profile. |
| Currencies | USD primary. EUR, GBP, CAD, AUD, AED and other major currencies may be supported where payment route, account control and lender appetite are acceptable. |
| Jurisdictions | United States, Canada, United Kingdom, European Union, EEA, UAE, GCC, Singapore, Hong Kong, Australia, New Zealand and selected emerging markets with strong counterparties. |
Financely Fees
| Mandate Type | Fee Position |
|---|---|
| RFQ Review | USD 500. Covers in-depth file review and external consultation to assess whether there is market interest before a full ABL engagement is issued. |
| Routine Contract Financing | Starting at USD 25,000 for straightforward contract-backed working capital files with signed contracts, clear buyer profile, defined funding need and standard lender distribution. |
| Complex Mandates | Quoted case by case for multi-contract, multi-jurisdiction, cross-border, commodity-linked, government, EPC, profit-share or equity-linked structures. |
| Receivables Securitization | Starting at USD 100,000 for asset pool review, investor package preparation, waterfall design, servicer reporting logic and structured credit distribution. |
| Third-Party Costs | Legal counsel, tax advice, collateral review, trustee, servicer, SPV, rating, audit, verification, escrow, agency, bank and due diligence costs are billed separately where required. |
Underwriting And Distribution
Transaction And Borrower Review
Contract economics, buyer profile, borrower ownership, use of proceeds, sanctions checks, payment route, collateral and legal enforceability.
Borrowing Base And Repayment Logic
Advance-rate analysis, receivables eligibility, collateral package, cash waterfall, reporting needs, covenants and lender-facing credit narrative.
Lender And Investor Outreach
Distribution to banks, ABL lenders, private credit funds, trade finance lenders, receivables investors and structured credit buyers.
Execution Support
Comparison of pricing, advance rate, tenor, collateral, equity upside, profit-share terms, covenants and closing conditions.
Contract Financing FAQ
What types of financing can Financely arrange?
Senior ABL, receivables finance, PO finance, milestone finance, contract-backed term loans, warehouse lines, receivables securitization, profit-share finance and equity-linked capital may be reviewed depending on the contract profile.
Can pricing include profit sharing or equity?
Yes. Some mandates may include contract profit share, preferred return, warrants, conversion rights or minority equity participation where the risk profile requires investor upside.
What does Financely guarantee?
Financely guarantees the advisory process within the signed mandate scope, including RFQ review, market sounding, KYT, KYC coordination, underwriting, lender packaging, distribution, term sheet comparison support and closing coordination.
What is outside Financely’s guarantee?
Funding approval, lender pricing, advance rate, collateral requirements, legal documentation, closing timeline and disbursement remain subject to lender underwriting, credit approval, sanctions checks, documentation and borrower performance.
Can contract pools be securitized?
Yes. Larger contract pools may support receivables-backed facilities, warehouse lines or securitization structures where receivables are diversified, measurable, assignable and capable of monthly investor reporting.
How do we start?
Start with the RFQ. Submit the signed contract or contract pool summary, annual contract value, buyer details, jurisdiction, funding requirement, use of proceeds, receivables profile and repayment route. You can request a contract financing proposal for the initial review.
Request A Contract Financing Proposal
Submit the signed contract or contract pool summary, annual contract value, buyer details, jurisdiction, funding need, use of proceeds, receivables profile and repayment route.
Request A Contract Financing ProposalIndicative term sheet notice: The terms shown on this page are indicative, non-binding and subject to transaction review, lender appetite, underwriting, KYC, KYT, AML, sanctions checks, collateral review, legal documentation and final credit approval. Financely provides commercial finance advisory, underwriting support, structuring support and capital placement coordination. All funding decisions, lender terms, approval timelines and disbursements remain under the control of the relevant lender, investor or financing counterparty.