The award letter is in. Now the contract wants a guarantee, the programme wants wages before the first certificate is paid, and the bank wants a pack it can take to committee.
Three pieces of work, and they usually run together.
Guarantees. Work out what guarantees the contract needs, what they cost, and what facility headroom exists. Negotiate the guarantee facility with the bank or insurer. Read the counter-indemnity before it is signed. Model the cash: retention held, advances, payment lag against the wage bill.
Raising finance. Work out how much, for what, and which instrument fits: term loan, asset finance, project finance, working capital. Build the financial model and the pack lenders lend against. Approach more than one lender so there is competition. Compare the term sheets: rate, security, covenants, fees.
Bank applications. Rebuild the financials and forecasts to the standard a credit committee reads. Write the application and the motivation the banker takes to committee. Prepare the owner for the questions. Sit in the meeting.
Done when the guarantees the contract needs are in place, the facility is signed and the money is drawn.
Four things. Each one is read by the work above, so the sooner they are to hand the sooner the pack goes to the bank.
Where the position is clear, the work starts on the award and the contract. Where it is not, it starts with the Finance Inspection: R24 500 for one entity, R45 000 for a group or across a border, ten working days from the records being made available. The fee is credited in full against the first month of a retainer that starts within sixty days.
Project work is quoted as a fixed fee once the scope is written, because a facility, a settlement and a tender are not bought by the day. What that costs is on What it costs.
A conversation costs nothing, and if the work is not worth doing that gets said.
fransua@kantonwest.com · the contact form · Cape Town
