Won a Big Contract You Can't Afford to Deliver? How to Fund a Large Order

First, understand the shape of the problem

A big order is not one funding gap but two, and they need naming separately because different tools fix each. The first gap is delivery: the cash to buy materials or stock and pay wages before you can invoice anything. The second gap is payment: the 30, 60 or 90 days between raising the invoice and the customer settling it, made heavier because big customers who place big orders tend to hold the longest terms. Most businesses instinctively reach for a loan to cover both, which works badly, because a lump borrowed against the whole contract starts costing interest on day one and bears no relationship to the rhythm the money is actually needed in.

The payment gap: invoice finance, sized to the order

The second gap has the cleaner solution, so take it first. Once you deliver and invoice, invoice finance advances typically 70 to 90 per cent of the invoice value within about a day, collapsing the customer's long terms into your short ones. For a contract delivered in stages, each staged invoice generates its own advance, so cash flows back throughout the job rather than at its distant end. And critically for a one-off order, this does not require committing your whole business: selective invoice finance can fund the invoices from this contract alone, with no ongoing facility, no minimums and nothing owed in the months you do not use it. The customer whose order created the problem becomes, through their own covenant, the thing that solves it, since funders advance most confidently against invoices to substantial businesses, which is precisely who places large orders.

The delivery gap: trade finance and its relatives

The first gap, funding the making or buying before any invoice exists, needs a different tool. Trade finance funds the purchase of goods or materials against your confirmed order, paying suppliers, including overseas, with the facility repaid when you deliver, invoice and the invoice finance advance lands. The two products interlock deliberately: trade finance carries you from purchase order to invoice, invoice finance from invoice to payment, and together they can fund a contract essentially end to end against its own paperwork. Where the job is more labour than materials, a staged invoicing structure agreed with the customer, funding each stage as our manufacturing and construction guides describe, often closes the delivery gap by shrinking it. Not every provider offers these combinations, and stitching them together is a genuinely specialist job, which is where being part of First Oak Capital, a commercial finance brokerage, earns its keep: one conversation can cover the whole chain.

A worked example

A fabrication business turning over £600,000 wins an £250,000 order from a national contractor: £90,000 of materials up front, three months of wages through the build, payment 60 days after delivery. Unfunded, the job demands roughly £170,000 of cash the business does not have, and the honest options are decline, or gamble the company. Funded, it looks different: trade finance covers the £90,000 of materials against the purchase order, staged invoicing at agreed milestones generates advances of 80 to 85 per cent within a day of each invoice, and the final 60 day wait affects the funder's timetable rather than payroll. The margin survives the fees comfortably, because the alternative to fees was not a cheaper way of taking the order, it was not taking it. Try the numbers on your own contract in the working capital calculator.

What funders will want to see, and the trap to respect

For a large order the funder underwrites three things: the customer, whose covenant is doing the heavy lifting; the contract, its terms, stage payments and any clauses allowing set-off or rejection; and your capacity to deliver, because funding cannot manufacture competence. Get the paperwork tight, a clear purchase order, sensible terms, deliverables the customer signs off, since a disputed invoice is an unfunded invoice, as our guide to what happens if my customer doesn't pay explains. And respect the overtrading trap in both directions: funding removes the cash barrier to growth, not the operational one, and the discipline of asking whether you can actually deliver remains yours.

Move before you sign, not after

The strongest position to arrange order funding from is before the contract is signed, when payment terms and staging can still be shaped with funding in mind, a milestone structure agreed at negotiation is worth more than any facility bolted on afterwards. We regularly work with businesses at tender stage, confirming what is fundable before they commit. Our matching service is free to use, and if the honest answer is that the contract's terms make it dangerous, you will hear that before you sign rather than after.