How does financing for contracting and supply contracts work? | Ask Banky

Editor-in-Chief Mohamed Salah

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Editor-in-Chief Mohamed Salah

How does financing for contracting and supply contracts work?

Asked by Banky team 2 months ago
Banky team Reviewed editorial answer

The company wins a tender (for example building a school or supplying food to a government entity). The bank then finances the project at a percentage (for example 70% of the contract value) so the works can be carried out, and the security is the formal assignment to the bank of the contract receivables / the cheques issued by the entity that owns the project.

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