JTB:: Contract Monetization

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Contract Monetization

Contract Monetization, (contract financing or monetizing a contract) is a very flexible financial tool that can provide needed capital to a business. Each transaction can be custom product designed to meet the needs of the borrower, but it does require a UCC filing on the borrower�s equipment. It is much less expensive and onerous than equity or subordinated debt. The capital derived from contract financing can be used for virtually any purpose. The contract must be with a company that has investment grade credit (BBB or higher), OR the equivalent in terms of its financial strength. Federal, State, and Local governments are ideal. The term of a Contract Finance can be as short as 12 months, or as long as 10 years. This product is available to U.S. based companies. Minimum size is $ 1 million with no maximum.

Typically, a client will seek to monetize their contract, when they are unable to get financing done through a commercial or merchant banker, and they are turned down from Private Equity Groups and Venture Capital Firms. Companies that do well with contract monetization are typically service providers, manufacturers, and IT consultants, or companies. These types of companies typically have contracts in place that can be monetized.

Pricing depends on the size of the transactions as well as the credit quality of the company receiving the product of service. Generally, the interest rate will be 7% to 10%. JTB will work with you and provide the necessary language needed, which is embedded in the contract via an addendum that allows the taking of an assignment of all or portion of the contract�s future revenues. A present value of those revenues will give your company the capital you need to complete the contract. In many instances, it is possible to provide a present value consisting of even more than the essential capital needed to acquire the equipment, injecting much needed working capital.

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JTB Associates LLC CPA is an Illinois based certified public accounting and business consulting firm. JTB Associates CPAs provides core accounting services, like payroll, and funding solutions, such as leasing, raising business capital, unsecured lines of credit, merchant loans, merchant advances, and vendor financing programs. Our services transcend accounting to building, raising, obtaining working and expansion capital for start up and established businesses. JTB is nationwide, local area is Illinois communities like Serving the Chicago metropolitan area Northbrook,Grayslake,Wheaton,Naperville,Skokie,Oak Brook,Springfield,West Chicago,Rolling Meadows,Oakbrook Terrace,Crystal Lake,Wilmette,Highland Park,Gurnee,Libertyville,Elgin,Elkgrove Village, Elmhurst . JTB Associates, LLC is a Certified Public Accounting Firm and Business Consulting Firm based in Chicago, Illinois.