Mobilization Funding

Is mobilization funding right for your award?

This is the narrowest product on the site by timing. It exists for one window: after the award, before anything is billable.

It usually fits when:

• You have won an award and performance has not started, or has started and nothing can be invoiced yet
• There are real startup costs: hiring and badging, equipment, vehicles, site stand-up, insurance and bonding, travel
• The award is materially larger than your last one, which is the case where mobilization most often breaks a contractor
• You would otherwise fund it out of operating cash on the assumption it comes back quickly, which it does, on the agency’s schedule rather than yours

Something else fits better when:

• You have already invoiced. The receivable exists, so invoice factoring is cheaper and simpler
• The cost is almost entirely labor and recurring. Payroll funding is shaped to that
• You need capital through the whole contract, not just to start it. A contract line of credit covers mobilization and then keeps going
• The spend is one defined asset. Equipment financing secured on the equipment usually costs less

It is also worth asking your contracting officer about progress payments before you borrow anything. Where the contract allows them, you are paid a percentage of costs already incurred, and a contractor who has not asked is leaving that on the table.

How it is sized, and why that matters

Mobilization funding is sized against a budget rather than a receivable, because at this stage there is no receivable to lend against. That makes the underwriting a question about the award, the scope, and the credibility of your startup plan.

The practical consequence is that the quality of your budget is the application. What we need is not a total. It is a list of costs with a week attached to each one.

Two contracts with identical mobilization totals have completely different funding needs if one front-loads equipment in week one and the other spreads cost across ninety days. The number that matters is the peak cumulative outflow before the first payment lands, not the sum.

• Recruiting, onboarding, badging and clearances
• Equipment, vehicles and tooling
• Insurance and bonding
• Travel and site setup
• Any subcontractor mobilization you have to fund before you are paid

Our guide to mobilization costs works through how to build that budget, and the guide to funding a new award covers how it fits the wider timeline.

How the conversation goes

• First conversation. What you have won, when performance starts, and what has to be paid for before you can invoice. Fifteen minutes is usually enough to know whether this is the right product.
• What we ask for. The signed contract or award letter including the statement of work, your dated mobilization budget, recent financials, and, on federal work, your SAM.gov registration and CAGE code.
• Underwriting. Centered on the award, the agency and your plan to perform, rather than three years of history. That is what makes it available to a contractor whose financial history has not caught up with what they have won.
• Transition. Mobilization funding is a bridge to your own billing. We structure the repayment around when your first invoices are expected to pay, so it winds down as the contract starts producing revenue.

Start earlier than feels necessary. Financing arranged at award is underwritten calmly; the same request made in week six with payroll due Friday is not, and you will have fewer options and less leverage.

The questions contractors ask first

Can I get this before the contract is awarded? The money is released against an award you hold, so the draw itself comes after. The underwriting does not have to. Open the conversation while you are still bidding and the facility is ready the day you win, which is both the cheapest and the calmest time to arrange it. If what you need is to evidence financial capacity inside the proposal, that is a financial capability letter.

What happens once I start invoicing? The structure usually transitions. Once receivables exist, funding moves onto those, either through a contract line or factoring, which is generally cheaper than continuing to finance against a budget.

Is this my first and only option? Ask about progress payments first. On federal work FAR Part 32 provides for partial payment against costs already incurred, and many state and municipal codes have an equivalent. Where they apply they can close a meaningful part of the gap before you finance anything. Eligibility depends on the contract, and the contracting officer has to authorize them.

My award is much bigger than my last one. Does that count against me? Under a bank’s test, yes. Under this one, no. Contract-based underwriting looks at the award and the agency’s obligation to pay rather than whether your history already looks like the contract you just won.

Does this work for state and municipal contracts? Yes. The startup problem is identical: the award is signed, costs are outbound, nothing is billable yet. What changes is whether an equivalent to federal progress payments exists in that jurisdiction, which is worth asking your contracting officer before you finance anything.

What to plan for

• A budget given as a total rather than a timeline. A dated budget can be underwritten quickly, so the week-by-week version is worth building before you call.
• Subcontractor mobilization is forgotten. Your subs have the same cash problem you do, and some need paying before you are paid. It is a gap inside the gap and it is routinely left out of the first draft.
• Badging and clearances slip. They slip far more often than they run early, and every week of slip is cost with no invoice behind it.
• Mobilization is funded from operating cash. On the assumption it replenishes quickly. It replenishes on the agency’s schedule, and in the meantime it is not available for anything else you might need it for.

How much does mobilization funding cost?

Mobilization funding is priced against the award and the plan rather than a receivable, because none exists yet. The facility is structured to wind down as your billing starts, so it is not intended to be carried for the life of the contract.

The variables that set it are the agency, the period of performance, the size and shape of the mobilization budget, and your billing history if you have one. Tell us what you have won and what it costs to start and you will have a number quickly.