CONTRACT FINANCE
Every year, thousands of businesses across Nigeria win lucrative contracts but find themselves unable to execute due to lack of working capital. At Cool Financial Services Limited, we believe that a great opportunity should never be lost due to funding constraints. That’s why we created our Contract Finance Facility, a financial solution specifically made to help you execute contracts with confidence, efficiency, and peace of mind.
Contract Finance is a specialized credit facility provided to clients who have secured a contract and require financial support to execute the project. This facility bridges the gap between contract award and contract execution, allowing businesses to maintain momentum without cash flow constraints.
APPLICATION PROCESS FOR CONTRACT FINANCE
1. The application process begins when a customer submits a written application letter, a copy of the contract award letter, the executed contract agreement, and a detailed profitability analysis.
2. Once these documents are received, they will be forwarded to the awarding organization (the contract employer) for verification.
3. Following a positive confirmation from the contract employer, the customer is required to make a mandate adjustment on the domiciled account, this involves adding a director from Cool Financial Services as a joint signatory.
4. The customer must provide title documents for a pledged collateral asset, along with any supporting legal documents necessary to effectuate a temporary transfer of interest or ownership. Our legal team then conducts a comprehensive title search to verify that the pledged asset is free from encumbrances.
5. Once the legal team confirms the collateral’s validity and all other preliminary requirements are met, the loan request is then approved. The approved loan amount is strictly based on the verified cost of executing the contract not the full-face value of the contract itself.
KEY CONSIDERATIONS FOR THE DISBURSEMENT OF THE FACILITY
At Cool Financial Services Limited, before any disbursement of funds under the Contract Finance Facility is made, we take steps to ensure the financial viability, compliance, and security of the transaction.
1. A comprehensive profitability analysis is conducted to ensure that the projected profit from the contract is sufficient to cover the total cost of execution, including the interest on the facility.
2. Once the profitability and project structure are verified, an official offer letter is issued to the customer. The customer must formally accept the offer by signing and returning the letter before any funds can be released.
3. Fund disbursement is structured around clearly defined project milestones, as outlined in the customer’s contract agreement.
4. For contracts structured around multiple phases or deliverables, the customer must present a milestone completion certificate issued and signed by the contract employer before any further disbursements are made.
5. Upon reaching an agreed-upon milestone or completing the project, the customer must generate and submit an invoice to the contract employer. This invoice serves as the formal request for payment based on the work completed.
WHAT MAKES US DIFFERENT?
Partnering with Cool Financial Services on your next contract comes with multiple advantages:
a. Execute Without Delay: No more waiting to gather capital, you can mobilize immediately.
b. Low Interest Rate: We offer a highly competitive interest rate for all our credit facilities.
c. Improve Your Track Record: Successfully executed contracts help you qualify for even bigger opportunities in the future.
d. Protect Your Working Capital: Keep your core business operations running smoothly while we fund your contract work.