Production Starts Before Revenue
Finance initial materials, labor, engineering and other expenditures required to mobilize an awarded contract.
Defense Contract Finance
Finance the Working Capital Required to Execute Large Defense Contracts
Financely structures contract-backed financing for defense, aerospace, security and strategic-industry contractors with awarded procurement revenue and substantial execution capital requirements.
The mandate begins with the underlying contract and its cash conversion cycle. We structure the financing requirement around procurement, inventory, manufacturing, subcontractors, milestones, approved receivables, guarantee obligations and the contractor's existing balance sheet.
Request a Defense Finance Mandate 01
$25M+ Contract
Designed for material awarded contracts and procurement programs.
02
Identifiable Customer
Government, ministry, public agency, prime contractor or established defense group.
03
Defined Payment Cycle
Contract milestones, deliveries, acceptance events and payment terms can be mapped.
04
Execution Capacity
Financing is structured around a contractor capable of performing the underlying award.
Awarded Contract. Unfunded Execution Cycle.
Winning the Contract Can Create the Largest Working-Capital Requirement
A contractor may need to purchase components, accumulate inventory, expand production, pay engineering teams and fund subcontractors long before milestone or final payments are received. Financely structures the capital required between contract award and cash collection.
Contract Execution
A Valuable Defense Award Can Still Produce a Severe Liquidity Gap
The larger the contract, the more capital can be required before the corresponding revenue becomes available. The financing architecture should follow the production schedule, contractual milestones and repayment sources rather than rely solely on conventional corporate leverage.
Specialized Components Consume Cash
Structure inventory or borrowing-base finance around qualifying components, work in progress and finished goods.
Payments Arrive After Acceptance
Bridge the period between manufacturing expenditure, delivery, inspection, acceptance and contractual payment.
Approved Invoices Still Carry Payment Terms
Convert eligible government or prime-contractor receivables into working-capital liquidity.
Contract Security Consumes Additional Capacity
Coordinate bid, performance, advance-payment and other guarantee requirements alongside the working-capital facility.
Several Awards Create Overlapping Capital Needs
Build revolving capacity across an eligible backlog instead of financing every contract as an isolated transaction.
Financing Architecture
Finance Each Stage of the Defense Contract Cash Cycle
Contract execution moves through several different credit states. The financing facility can evolve as cash is converted from mobilization expenditures into inventory, completed deliveries and ultimately receivables.
01
Award
Confirm contract value, scope, delivery schedule and payment mechanics.
02
Mobilization
Fund raw materials, engineering, labor, tooling and subcontractor commitments.
03
Production
Finance inventory, work in progress and manufacturing requirements.
04
Delivery
Bridge testing, logistics, inspection and contractual acceptance.
05
Collection
Refinance or monetize eligible approved receivables until customer payment.
Financing Structures
Build the Facility Around the Contract and Source of Repayment
The appropriate financing structure depends on the contract, customer, contractor, payment schedule, jurisdiction, collateral, guarantees and stage of execution.
01
Contract Mobilization Facility
Finance early execution costs after an eligible contract has been awarded.
02
Revolving Contract Finance
Reusable capacity supporting a defined portfolio of qualifying defense contracts.
03
Receivables Finance
Advance liquidity against eligible invoices due from government entities or established prime contractors.
04
Inventory Finance
Finance eligible materials, components and finished inventory required for contract execution.
05
Borrowing-Base Facility
Establish availability against defined receivables, inventory or other eligible collateral.
06
Supply-Chain Finance
Coordinate financing around suppliers and subcontractors where the commercial structure supports it.
07
Performance Guarantee Capacity
Structure eligible guarantee capacity alongside the funding required to perform the contract.
08
Advance-Payment Guarantee
Coordinate guarantee requirements where the customer provides contractual advance payments.
09
Equipment & Capacity Finance
Finance eligible machinery, tooling or production capacity required to fulfill the awarded backlog.
10
Multi-Lender Facility
Expand funding capacity across several institutions when the contract portfolio exceeds bilateral lender limits.
Defense Industrial Base
Finance the Companies Behind the Prime Contract
Defense procurement creates financing requirements throughout the industrial supply chain. Financely can evaluate established companies with identifiable contracts and credible execution capacity.
Aerospace manufacturers
Defense electronics companies
Communications suppliers
Radar and sensor suppliers
Cybersecurity contractors
Software and systems integrators
Vehicle and mobility suppliers
Shipbuilding and marine suppliers
Component manufacturers
Precision engineering companies
Logistics providers
Maintenance and MRO contractors
Government technology contractors
Protective equipment suppliers
Space and satellite suppliers
Qualified defense subcontractors
Underwriting the Contract
The Award Alone Does Not Determine Financeability
Institutional lenders underwrite the contractor and the contract together. Financely builds the financing case around the source of repayment, cost to complete, performance risk, customer quality and collateral available during the contract lifecycle.
Contract Value
Award amount, remaining backlog and committed revenue.
Payment Schedule
Mobilization payments, milestones, acceptance and final settlement terms.
Cost to Complete
Remaining materials, labor, subcontracting, engineering and delivery costs.
Customer Quality
Government entity, public authority, defense prime or other contractual obligor.
Execution Risk
Technical complexity, delivery schedule, performance history and production capacity.
Collateral
Receivables, inventory, equipment, cash flows and other available security.
Guarantee Requirements
Bid, performance, advance-payment and other contractual security obligations.
Regulatory Eligibility
Applicable procurement, compliance, export-control and jurisdictional requirements.
Institutional Preparation
Prepare the Contract for Credit Underwriting
A complete financing package should allow the lender to trace the funding requirement from initial expenditure through delivery and final repayment.
Award Documentation
Executed contracts, purchase orders, amendments and material commercial terms.
Milestone Schedule
Production, testing, shipment, acceptance and delivery milestones.
Payment Schedule
Advance payments, milestone payments, invoice terms and expected collection dates.
Cost to Complete
Remaining materials, labor, subcontractors, engineering, testing and logistics expenditure.
Financial Statements
Historical accounts, management accounts, forecasts and existing debt obligations.
Receivables & Inventory
Aging reports, inventory schedules and other assets relevant to the financing base.
Supplier Commitments
Material supplier contracts, subcontractor arrangements and procurement requirements.
Guarantee Requirements
Bid bonds, performance guarantees, advance-payment guarantees and related contract security.
Regulatory Documentation
KYC, corporate documentation and applicable licences or approvals required for the transaction.
Financely Process
From Awarded Contract to Funded Execution Capacity
Financely structures the credit requirement around the actual execution cycle, prepares the institutional financing case and coordinates relevant banks, private lenders and specialty finance providers.
01
Assess
Review the award, payment schedule, contractor and peak funding requirement.
02
Structure
Design the mobilization, inventory, receivables and guarantee capacity required.
03
Prepare
Build the credit memorandum, model, data room and contract financing package.
04
Arrange
Coordinate suitable banks, private credit funds and specialty finance providers.
05
Execute
Support underwriting, structuring, documentation and facility closing.
Commercial Terms
Defense Contract Finance Mandate
Engagement economics depend on contract value, financing requirement, contractor profile, jurisdictions, guarantee requirements and the number of capital providers required to complete the facility.
Initial Retainer
$150K–$750K+
Plus applicable closing economics for qualifying defense contract financing assignments.
$25M–$1B Defense Contract Finance
The mandate is structured around the contract's peak execution-capital requirement and the financing architecture required to bridge expenditure through collection.
Contract review
Cash-cycle analysis
Cost-to-complete analysis
Facility structuring
Guarantee strategy
Credit package preparation
Lender coordination
Closing support
Frequently Asked Questions
Defense Contract Finance
What is defense contract financing?
Defense contract financing provides working capital around an
identifiable defense, aerospace, security or government
procurement contract. The facility is structured around the
contractor's execution costs, payment schedule, collateral
and source of repayment.
What size contracts do you work with?
The institutional mandate is primarily designed around
contracts or contract portfolios of approximately $25 million
to $1 billion.
How much does the mandate cost?
Initial retainers generally range from $150,000 to $750,000
or more depending on transaction size and complexity.
Applicable closing economics are documented separately in the
engagement agreement.
Can an awarded contract support mobilization financing?
Potentially. A lender can evaluate an awarded contract
alongside the contractor's financial position, execution
capability, payment schedule, budget and source of repayment
when determining whether mobilization capital can be provided.
Can you finance approved defense receivables?
Eligible receivables from government entities, public
authorities or established prime contractors may support
receivables financing subject to lender underwriting and
applicable contractual restrictions.
Can inventory be financed?
Potentially. Eligible materials, components and finished
inventory may support inventory-backed or borrowing-base
structures where the lender is comfortable with the assets
and control mechanics.
Can the facility include performance guarantees?
Guarantee requirements can be incorporated into the broader
financing architecture. The applicable bank or surety provider
independently determines issuance, collateral and credit
requirements.
Can you finance several defense contracts under one facility?
Potentially. Contractors with a sufficiently diversified and
financeable backlog may be candidates for revolving or
borrowing-base facilities covering several eligible contracts.
Do you work with subcontractors?
Yes. Established subcontractors can be evaluated where they
have identifiable awarded revenue, credible execution capacity
and a financing requirement large enough to support an
institutional mandate.
Do you work on cross-border defense contracts?
Cross-border transactions can be evaluated subject to
procurement eligibility, applicable export-control and
sanctions requirements, contractual restrictions and the
compliance policies of the participating financing
institutions.
Does Financely directly provide the loan?
Financely provides structuring, advisory and capital
arrangement services. Financing is provided by third-party
banks, credit funds and other eligible capital providers.
Is financing guaranteed?
No. Financing remains subject to independent underwriting,
contract review, credit approval, KYC, AML, sanctions,
compliance, collateral, legal documentation and the final
decision of the relevant capital provider.
Have You Won the Contract but Lack the Capital to Execute at Full Scale?
Send us the contract value, customer, delivery schedule, payment milestones, contract budget, peak working-capital requirement, receivables profile, inventory requirements, guarantee obligations and existing debt facilities. Financely can assess the financing gap and structure the capital required to execute the award.
Request a Defense Contract Finance MandateFinancely provides corporate finance advisory, transaction structuring and capital arrangement services on a best-efforts basis. Financely is not a bank, direct lender, government procurement authority, export-control authority or guarantee issuer and does not itself provide defense contract financing. Any financing or guarantee remains subject to independent underwriting, credit approval, contract review, KYC, AML, sanctions screening, export-control requirements, procurement eligibility, collateral, legal documentation and other applicable regulatory requirements. Financely does not guarantee financing, guarantee issuance, procurement eligibility, contract performance or transaction closing.