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A company delivering public-sector contracts needed capital to begin work on a large order and cover costs arising before the first payments from the contracting authority were received. The signed contract provided a predictable source of future revenue, but the company’s existing credit exposure limited its ability to obtain additional bank financing. PaveNow arranged PLN 3 million in financing, released in three tranches and aligned with the project delivery schedule. Part of the funding was transferred directly to suppliers, while subsequent disbursements were linked to progress under the contract.
The client was a company specialising in the delivery of public-sector contracts. It had relevant industry experience and had secured another large order that required substantial capital expenditure before the first payments were received.
The company was not seeking funding to rescue an unprofitable business. It had a specific contract, a clearly defined scope of work and predictable future cash inflows. The challenge resulted from the timing gap between project expenditure and payments received for completed stages of the contract.
The purpose of the financing was to provide the funds required to begin delivering the contract and maintain continuity of work until the first payments were received.
In practice, the capital was needed for the purchase of materials, payments to suppliers, subcontractor fees and other operating expenses connected with successive stages of the project.
In projects of this kind, costs arise before revenue. The company must first order materials, commence work and engage contractors. Only afterwards does it receive payment for a completed project milestone.
The client had a signed contract and a predictable source of future revenue but could not increase its bank financing because of its existing credit exposure.
Without additional capital, the company risked delays in starting the work, difficulties paying suppliers and subcontractors on time and, ultimately, disruption to the delivery of a profitable contract.
The challenge was therefore not limited to securing a substantial amount of funding. The financing also had to be structured so that capital became available in line with the actual project schedule, while some payments could be made directly to entities involved in delivering the contract.
PaveNow arranged PLN 3 million in financing, divided into three tranches aligned with the contract delivery schedule.
The first tranche enabled the client to begin work and cover the initial project costs. The second was allocated to payments for suppliers and subcontractors, with part of the funding transferred directly to the relevant entities.
The third tranche was released after an agreed project milestone had been completed. Instead of receiving the full amount at once, the client accessed the capital at the stages when it was actually required.
This structure linked the disbursement of funds to project progress and reduced the cost of holding capital that had not yet been put to use.
The financing allowed the client to begin delivering the contract according to schedule, order the required materials and settle payments with suppliers and subcontractors on time. By receiving the funds in successive tranches, the company maintained continuity of work and reduced the risk of delays caused by insufficient working capital.
The most important outcome was therefore not simply securing PLN 3 million. It was the ability to deliver a profitable contract that could otherwise have been delayed or suspended due to a shortage of capital.
Non-bank financing involved a higher cost than a standard bank loan, but it enabled the company to generate revenue and profit from a contract that the bank was unwilling to finance.
This case demonstrates that having a signed contract does not automatically provide access to additional bank financing. A company may have confirmed future revenue while still lacking sufficient borrowing capacity to fund the delivery of a new order.
For large contracts, the amount of financing is not the only important factor. The way the capital is released also matters. Staged disbursement makes it possible to align funding with successive project milestones, control how the capital is used and limit financing costs.
For companies delivering public-sector contracts, infrastructure projects and larger B2B orders, the key lesson is clear: a profitable contract may require financing long before the first payment is received. A properly structured financing solution can bridge this period without bringing project delivery to a halt.