I Just Got a New Large Contract, and my Business’s Cash is Tied Up in Other Projects. What are the Project Funding Requirements and What Should I do to Obtain Financing in Order to Get Mobilized on this Project? 

Congratulations on your new contract!  “What are the project funding requirements?” is one of many common questions that arise as businesses begin to expand and grow.  As businesses get multiple contracts at one time, analyzing and understanding your cashflow on each project becomes more important than ever before.  First, you need to take a look at your cashflow (on each project and how they roll up overall to the whole company) to ensure you can first perform on the project and maintain or exceed the standards you have established for your team.  Ask yourself these questions – do you have the labor force?  Access to the suppliers you need? And, is the original plan when you bid on the project still in line today?

Next, get your financial reports in order – the last couple of business tax returns, bank statements for all business accounts, internal financial reports (income statement and balance sheet), debt schedule, Accounts Receivable (AR), and Accounts Payable (AP) reports.  These are some of the main project funding requirements you’ll want to have available. Have these organized in one folder and spot you can easily access and send them to your lender when they ask for it.  Include any Cash Flow modeling you have for the project and the amount you think you need to get the project done, how you determined that amount of money, and what you will be using the money for (this is commonly referred to as the “Uses” portion of a “Sources and Uses” report / spreadsheet / table).

You can also contact your existing relationships – bank and banker, accountant, controller, and colleagues in the industry.  If you have not established relationships already for this exact purpose then you should contact the people you trust (friends, colleagues, and especially other business owners in your industry) and ask them who they use and their experience with them.  Look at these options first, research them online, and see what they say about themselves and what others say about them.  Do your research and homework on their website, YouTube Channel, and LinkedIn.  See who resonates with you and contact those people first to see if they can help you.