Traditional asset based financing
no longer conforms with the
new pay-for-service contracts
Cloud Service Provider Challenge

Selling IT infrastructure unattached to services increasingly rare

Clients demanding bundled solutions including software and services

Clients demand Cloud Service Provider performance obligations as a component of the contract

Can’t arrange traditional financing for increasingly complex/flexible engagements

Cloud Service Providers are forced to unbundle transactions or provide guarantees

Conventional Financing Challenge

Hell or high water contracts (pay no matter what) no longer relevant when attached to Cloud Based Managed Service Contracts

Cloud Based Managed Service Contracts involve both client credit risk and business/performance risk associated with the cloud service provider's delivery of the services.

Traditional finance companies unable to advance funds without fixed contractual commitments

Traditional finance companies then seek recourse or guarantees from the Cloud Service Provider

Guarantees prevent Cloud Service Providers from recognizing the sale and constrain their balance sheet

Contract Capital allows clients to pay for their IT requirements as they consume them, while allowing Cloud Service Providers the maximum sales recognition and cash flow in order to meet their financial objectives

The Contract Capital Solution
Enables vendors to obtain maximum allowable revenue
Cloud Service Providers receive a larger portion of the contracted revenue upfront and advance cash flows throughout the term

Cloud Service Providers are able to receive proportional sale treatment, advance cash and not constrain their Balance Sheet

Contract Capital will accept both credit and business risk

Does not impact the Vendor-Client relationship
Contract Capital purchases the cash flows that result from the Cloud Service Provider / Client Agreements

Contract Capital does not require a separate client “Lease or Funding agreement”

Provides non-notification and private label billing and collecting services
Innovative financing products to support the significant shift to Cloud Based Managed Services Contracts
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