There are a many projects that the government in place needs to undertake so that it improves service delivery to people. It is difficult to manage all these projects at a go because it would be very costly to oversee the progress at different sites. In order to reduce this cost, it is advisable to hire other companies that have the capacity to complete the projects in time. This requires a lot of capital making it important to have government contract financing agencies in place.
Projects given out to contractors are those that require high capital investments since they are very huge. This may result to the companies who are given the tenders to under perform because they have a lower capacity to implement these projects efficiently. However, this problem has been catered for by having monetary institutions that work closely and can come in to finance the projects.
There has been creation of lending departments by the treasury and other institutions that lend money to other companies. Their main role is to avail funds to some companies that need the help to ensure they have good capital structures to perform some activities. Any borrowers intending to seek help must visit these institutions and make their proposals.
In order to start the borrowing procedure, the borrower need to meet all conditions set aside by the authorities in the institutions. There should be presentation of required documents that are used as a basis of evaluating how much the borrower can be awarded. This process is quite lengthy and this delays the time on which funds will be released. The borrower is required to have documented his proposal well in such a way that it can convince the lenders.
When full reviewing of documents is done, negotiations begin. This allows the borrower to ask for any amount that they think will be enough to see through the projects without developing a financial crisis. This should be done by having a proper budget estimate as a supporting document that lenders are given to evaluate.
The lenders issue the agreed amounts to the contractors on some conditions on which the payments will be remitted. Usually, the government delays in releasing the amounts set aside to foresee the taking down of projects that are at hand. The lenders charge an interest of about 10% that will be used to compensate for the risk of lending out. This ensures that all constructions start in time and no halting occur due to shortages of money.
The amount agreed is deposited in the accounts of a contractor within a few days. This ensures that the project implementation starts as planned and the deadline for completion it is met. The funds also enable the contractor to purchase all machines, raw materials and any other things that are needed in performing their duties. This amount is also used to pay for any costs incurred and wages to all workers. This has been very useful in promoting development in the countries where such projects are undertaken.
More agencies should be established and existing ones expanded so that more financiers can be available. The procedures should be shortened so that the time taken is reduced making performance very efficient. This will bring about more developments within a short time.
Projects given out to contractors are those that require high capital investments since they are very huge. This may result to the companies who are given the tenders to under perform because they have a lower capacity to implement these projects efficiently. However, this problem has been catered for by having monetary institutions that work closely and can come in to finance the projects.
There has been creation of lending departments by the treasury and other institutions that lend money to other companies. Their main role is to avail funds to some companies that need the help to ensure they have good capital structures to perform some activities. Any borrowers intending to seek help must visit these institutions and make their proposals.
In order to start the borrowing procedure, the borrower need to meet all conditions set aside by the authorities in the institutions. There should be presentation of required documents that are used as a basis of evaluating how much the borrower can be awarded. This process is quite lengthy and this delays the time on which funds will be released. The borrower is required to have documented his proposal well in such a way that it can convince the lenders.
When full reviewing of documents is done, negotiations begin. This allows the borrower to ask for any amount that they think will be enough to see through the projects without developing a financial crisis. This should be done by having a proper budget estimate as a supporting document that lenders are given to evaluate.
The lenders issue the agreed amounts to the contractors on some conditions on which the payments will be remitted. Usually, the government delays in releasing the amounts set aside to foresee the taking down of projects that are at hand. The lenders charge an interest of about 10% that will be used to compensate for the risk of lending out. This ensures that all constructions start in time and no halting occur due to shortages of money.
The amount agreed is deposited in the accounts of a contractor within a few days. This ensures that the project implementation starts as planned and the deadline for completion it is met. The funds also enable the contractor to purchase all machines, raw materials and any other things that are needed in performing their duties. This amount is also used to pay for any costs incurred and wages to all workers. This has been very useful in promoting development in the countries where such projects are undertaken.
More agencies should be established and existing ones expanded so that more financiers can be available. The procedures should be shortened so that the time taken is reduced making performance very efficient. This will bring about more developments within a short time.
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