Recourse Articles

Contractor Advances: Funding Models and Loss Ownership

First distinguish an advance before work is delivered from early payment of an already earned receivable. The former exposes someone to non-delivery as well as payment default; the latter mainly accelerates cash after work or goods meet the funder’s eligibility conditions. A payment rail or MoR arrangement does not remove either risk. This guide compares financing and guarantee mechanisms, then shows how to assign funding authority and residual loss ownership.