Direct answer
The best financing for a large contract depends on where the cash gap sits. If you need materials and labor up front, a line of credit or a term loan usually fits. If you have already delivered and are waiting to be paid, invoice factoring fits. If the contract requires equipment you do not own, equipment financing is almost always the cheaper route than borrowing generally.
How we rank these
Winning a contract bigger than your working capital is a good problem, and it is still a problem. We rank options by where your cash gap actually is, not by what is easiest to get approved for. Three questions decide it: are you funding inputs before delivery, or waiting on payment after delivery; is this a one-time job or the start of a recurring relationship; and does the contract require an asset you will still own when the job ends. Speed matters, but taking the wrong product quickly is how a profitable contract turns into a cash crisis.
Comparison table
| Financing type | Best for | When in the job | Repayment | Main tradeoff |
|---|---|---|---|---|
| Line of credit | Recurring or multi-phase contracts where costs arrive in waves | Before and during delivery | Revolving, interest on what you draw | Slow to open, ceiling may be smaller than the job |
| Term loan | A single large, well-defined outlay with a clear payback | Before delivery | Fixed installments over a set term | Most documentation, slowest to fund |
| Invoice factoring | You have delivered and are waiting 30 to 90 days to be paid | After delivery | Settles when your customer pays the invoice | Depends on your customer's credit, not just yours |
| Equipment financing | The contract requires a machine or vehicle you will keep | Before delivery | Fixed installments, the equipment secures it | Only covers the asset, not labor or materials |
| Revenue advance | A time-sensitive gap when the options above are not available fast enough | Any point | A share of daily or weekly sales | Highest cost of the group, use deliberately |
Nothing here is an offer, a quote, or a prediction of what you will qualify for.
1. Best for recurring or multi-phase contracts: a line of credit
If the contract runs in phases, or if this customer is going to keep ordering, a line of credit is the right structure. You draw for each phase, repay as you get paid, and the capacity comes back for the next one. You are not re-applying every time the job moves forward.
The limitation is size and timing. Lines are slow to put in place and the initial ceiling may be smaller than a single large job requires. The move is to open one before you need it, which is worth saying out loud because almost nobody does. See the business line of credit page.
2. Best for a single large outlay: a term loan
One contract, one big known cost, a clear margin on the other side. That is a term loan. It is the lowest-cost option in this group when you qualify, and the fixed schedule is easy to model against the contract's payment terms.
The catch is time. If the customer needs a commitment in two weeks, a term loan may not be the tool for this job even if it is the right tool in principle. Read the term loan page, and if the timeline is the obstacle, see the bridge loan page for how businesses sequence the two.
3. Best when you have already delivered: invoice factoring
If the work is done and the money is tied up in a 30 to 90 day invoice, factoring is the direct answer. You are not adding debt against your business, you are accelerating money you have already earned. Because underwriting leans on your customer's credit, factoring is often available to a growing business that would not yet qualify for a comparable term loan.
This is the most common right answer for a first large contract with a big, creditworthy customer. Details on the invoice factoring page.
4. Best when the contract requires equipment: equipment financing
If you need a machine, a truck, or a production line to deliver, finance the asset directly rather than borrowing generally to buy it. The equipment secures the financing, which usually means better terms than unsecured borrowing of the same size, and you keep your other capacity free for materials and labor. See the equipment financing page.
5. Best when speed is the binding constraint: a revenue advance
When the contract will not wait and the options above will not move fast enough, a revenue advance can bridge it. Repayment is a share of your sales, so it flexes with your weeks, and underwriting leans on deposit history rather than credit score.
It is the most expensive option in this list, so it should be a deliberate choice against a specific, profitable contract with a near-term payoff, not a general solution to being short. And if you are already carrying advances, taking another one to fund this contract is usually the wrong move. Tell us where you actually are and we will say so. See the revenue advance page.
What if the contract is not profitable enough to finance?
Sometimes the honest answer is that the margin does not survive the cost of capital. If a job nets 8 percent and the financing to deliver it costs more than that, financing it is a way to work hard for a loss. We would rather tell you that before you sign the contract than after. This is a real outcome of these conversations, not a hypothetical.
FAQ
Landed something bigger than your cash on hand?
Send us the contract terms and your payment timeline, and we will tell you which of these actually fits, including when the answer is to walk away from the job.
Talk to an advisor