Funding equipment for a new contract you just won
Won a big contract but need equipment to do the work? How to fund the machines fast so you can start the job and let the contract pay it back.
If you won a contract and need equipment to do the work, fund the machines with financing built for growth, so the contract’s revenue pays for them over time. Royal Funding Group approves in hours and funds the same day, so you can have the equipment on site before the start date. The key is to apply as soon as the contract is signed, not the week the job begins.
The problem with winning big
A large contract is great news until you look at what it takes. More machines, more trucks, more crew, more materials. And the customer will not pay until the work is underway, often on 30, 60 or 90-day terms.
That leaves a gap between what you need to spend now and what the contract pays later. Banks often take weeks to approve equipment loans, and the start date will not wait. Without the right funding, owners end up turning down work they won.
How to fund the equipment
Expansion financing. Built for exactly this. Expansion financing funds large contracts and fleet growth, up to $5M. It can cover the equipment and the other costs that come with ramping up.
Equipment financing. The machines are paid for and repaid over a set term, usually with the equipment backing the deal. It fits when the need is mostly machinery.
Term loans. For large equipment you will keep long after this contract, a term loan of 12 to 48 months spreads the cost over a longer stretch.
Working capital. Equipment is only part of the startup cost. Working capital covers payroll, fuel, materials and mobilization while you wait on the first payment.
Invoice financing. If the customer pays on net 30, net 60 or net 90 terms, invoice financing gets you cash on invoices now instead of waiting.
Your specialist looks at the contract, the equipment list and your current cash flow, then builds a plan that may combine more than one of these.
Move fast: what to do the day you sign
- Get equipment quotes. Make, model, new or used, and price for each machine.
- Have the contract handy. The scope, schedule and payment terms help your specialist size the funding.
- Know your monthly revenue. It is one of the five questions on the application.
- Apply. The application takes two minutes, with no documents to start.
- Take the call. A specialist calls you the same day and asks for recent business bank statements by secure link.
Approvals come in hours, with same-day funding. The sooner you start, the more choice you have on equipment and delivery dates.
Size the funding to the job
Do not borrow only for the machines and then run short on payroll in week three. Map out the full cost of getting the job to the first payment: equipment, delivery, operators, fuel, insurance, materials and permits. Then compare that against when the customer pays.
Say a site-work contractor wins a contract that needs two more excavators and a dump truck. The equipment is the big line, but the crew still needs paying every week before the first payment arrives. Funding both the machines and a working capital cushion keeps the job moving.
The funding calculator helps you check what payments look like against the contract’s income.
Owning vs. renting for one job
If the contract is a one-off and the machines will sit afterward, renting may be cheaper. If the contract is the start of steady larger work, owning the machines builds capacity you will use again. A specialist can help you think through which equipment to buy and which to rent.
What RFG looks at
Royal Funding Group funds U.S. businesses with 12 or more months in business. We look at the whole business, not only the owner’s credit score. A signed contract and a solid revenue history make a strong case. Funding runs from $5,000 to $5,000,000, with $6B+ in capital deployed to more than 25,000 businesses.
Mistakes to avoid when ramping up
The most common mistake is waiting too long. Owners often hold off on funding until the start date is close, then rush to find equipment and money at the same time. Apply as soon as the contract is signed.
The second is borrowing too little. A plan that covers the machines but not the payroll, fuel and insurance leaves you short right when the job needs you most.
The third is ignoring the payment terms in the contract. If the customer pays on net 60, your plan has to carry the business for two months before the first check. Build that into the funding from the start, and talk with your specialist about invoice financing if the terms are long.
Start the job on time
If you have the contract and need the machines, a Royal Funding Group specialist will look at the job, the equipment and your cash flow, then fund what it takes to get started. Apply in two minutes or call (929) 506-8133.
