Unbilled Receivable Financing
Often a contractor may have obligations related to a contract that become due prior to being able to generate an invoice. The common vernacular for this type of financing is Earned Unbilled Financing (“EUB”). That is, work has been performed with the expectation that the invoice will be created in the near future.
Below is an illustration that graphically explains how EUB works in conjunction with Billed Receivable Financing.
Republic has created two products which address this situation – Payroll Funding and Mobilization Funding
Payroll Funding
Worrying about having sufficient cash to make payroll is one of the most common concerns of small, and growing, businesses. By using Republic’s Payroll Funding Product, a contractor can receive an advance payment of up to 80% of the value of work performed under a contract, but not yet invoiced. Once invoiced, Republic will purchase the invoice and pay down the advance.
Mobilization Funding
On occasion, a contractor is awarded a contract that requires a large number of employees be transferred from the incumbent to the new awardee. This may require an almost immediate influx of liquidity. In this circumstance, Republic’s Mobilization Funding Product can help. Like Republic’s Payroll Funding Product, the result is an advance payment equal to 80% of the value of work performed but not yet invoiced.
Commitment Letters
The Federal Acquisition Regulations (FAR) require that a bidder be able to demonstrate financial capability to execute on a contract in order to have their bid deemed compliant.
This is hard for many companies wanting to bid on large contracts. It is especially difficult for new companies that do not have many years of financial history.
To address this FAR requirement, Republic provides commitment letters, for which we do not charge, that a contractor submits with their bid confirming that the contractor has the requisite financing available should they win the award.
We take great satisfaction in helping companies grow and win new business. In one recent quarter our letters helped contractors win nearly over $800 million in new contract awards.