CONTRACT MONETIZATION FINANCE

Monetization Financing refers to the ability of a Vendor or Manufacturer to monetize equipment related service contracts. In other words, convert the equipment lease or rental part of a service contract into cash.

  • Do you yourself, or do you have clients that are service providers to end users who are investment grade or near investment grade?
  • Does your client or you need equipment to provide the required service?
  • Does your client or do you have a 2 to 15 year service contract with the end user?

If you answered yes, we can monetize the service contract to provide equipment and working capital at a much lower cost than equity.

Let’s say you have an investment grade customer (end user) who wants your equipment and asks you to include a service agreement for 2 or more years. Leasing companies typically will not wrap all this into a contract, but we have a way to do it and it is called Monetizing. Simply put, it’s the ability to allow the Vendor or Manufacturer a way to present an all inclusive quote to the customer, wrapping all these items into a Comprehensive Contract.

We will put together a comprehensive, proprietary usage or management agreement encompassing both the service and equipment portions of the Contract. The lender bills the customer for the total Contract payment, directing payment to a lockbox where it is then bifurcated and the non-tangible, service portion of the Contract is forwarded back to the Vendor or Manufacturer on a monthly basis.

Benefit to the Vendor or Manufacturer

  • Vendor or Manufacturer gets paid (at a minimum) for the equipment cost upfront.
  • Negates the need for the Vendor or Manufacturer to bill the customer on a monthly basis.
  • Customer pays one full Contract payment monthly.
  • Terms are as long as the Service Contract.
  • Equipment discounting is held to a minimum by wrapping equipment and service as one lump sum monthly fee to the customer.
  • Rates are Bank Rates (The overall cost will range from 1/5% to 3%)
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