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Raising Finance Against Contracts

Wednesday, July 29th, 2009

This is one of the least known about finance facilities in the market place. It is a very simple form of funding but is often overlooked when businesses consider their financing options. Although it is a form of cashflow funding it is completely different from factoring and invoice discounting which provides cash against unpaid invoices for periods of up to 90 days.

Contract Finance provides a lump of cash up front against the future value of guaranteed contracts. For example a business may have a guaranteed contract over a five year period generating £10k of income per month.  The total value of the contract is therefore worth £500k

It is possible to provide funding of up to £500k less a charge for borrowing the money over a five year period. The finance company will  take a legal charge over the contract and other legal documentation to make their security water tight. There are few funders in the market but still enough to provide funding against a large number of scenarios.

A minimum deal size is £50k and potentially no upper limit. The strongerthe covenant of contract the greater the percentage advance. This facility works very well where the contract is with a government body such as an NHS Trust. Each particular deal will be assessed on it own merits and if a business has any guaranteed future value it is always worth a chat.


XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

XL Business Finance Limited are authorised and regulated by the Financial Conduct Authority FRN 718737).

XL Business Finance, Eaton Place Business Centre, 114 Washway Road, Sale, Cheshire M33 7RF UK.


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