One of the conditions of a successful bid contractor is not only their expertise in the area being bid on but as well that the contractor has the financial capability to perform the work being bid on.
5 Key Steps that can be accessed to win the Bid.
Find a trade finance provider. We have the experience and contacts that specialize in construction finance. To succeed in a bid, getting to know your business and the terms of the bid is smart so that we can provide you with the right financing solution or options to succeed on your Bid.
Use a letter of credit (LOC): A letter of credit is a type of trade finance instrument that can be used to demonstrate financial strength when bidding for a tender. A LOC acts as a guarantee from the bank to the seller that payment will be made as long as the seller meets the terms and conditions of the contract. This can be used to demonstrate to the tender authority that the company has the financial capability to complete the project, even if the funds are not yet available.
Offer a performance bond: A performance bond is another type of trade finance instrument that can be used to demonstrate financial strength. A performance bond is a guarantee from a bank that the company will complete the project as specified in the contract. This can give the tender authority confidence that the company will fulfill its obligations even if the funds are not yet available.
Build a relationship with the bank: It’s important to build a strong relationship with the trade finance provider to ensure that the financing solution is in place when the company needs it. This can also help to ensure that the process of securing construction financing is as smooth as possible.
Provide all required documentation: The trade finance provider will require a variety of documentation to assess the company’s financial strength and to issue the LOC or performance bond. This may include financial statements, project plans, and other information related to the project. Make sure all documentation is complete and accurate to avoid any delays or issues with the financing process.
By following these steps, a company can use trade finance to demonstrate financial strength and win a tender, even if the company does not have the financial capability to do so until the construction financing is in place.
It’s important to note that these options should be used in conjunction with a strong business plan and evidence of the company’s expertise and ability to fulfill the contract. They should not be relied on solely to demonstrate financial strength. Additionally, it’s always a good idea to consult with a financial advisor to determine the best financing options for your company.
Under a Bid timeline crunch. We can help work through solutions for you.