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  1. #1
    Forum Member
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    Jan 2010
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    Default request for funds

    What percentage of funds can you request for a prepayment on a engine from fema?
    We would like to pre pay the chassis to save some money and was wondering if its possibly to get the money from fema?
    anyone understand what Im asking?


  2. #2
    Forum Member
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    May 2007
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    441

    Default

    If you prepay with Fed funds you have to put a performance bond in place (which you end up paying for). A bond may, or may not, be appropriate or necessary but the buyer pays for it.

    The small discount you get on a chassis typically is trivial compared to the "return"/risk. What it means is that you are the manufacturer's banker. You know enough to assume that role? Is there a reason the mfg needs to "borrow" working capital from you rather than down at his/their local the bank? Given the current banking mess or our estemed leader in chief, many banks are presently out of the business of making commercial loans. Highly leveraged and capital intensive small manufacturers have NO source of working capital (why unemployment is over 10%).

    I'd discuss with a smart local commerical banker see if he thinks it is smart to prepay (loan). Or if he will make the loan to your builder. Larger and/or financially stable, builders will not require a prepayment from qualified customers.

  3. #3
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    Default

    well we are going with a performance bonds thats going to cost 1300$,
    but if we prepay the chassis we will save 4600$.
    Just curious if anyone knows if we can get say 50% of the award upfront for this?

  4. #4
    MembersZone Subscriber
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    Jan 2005
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    3,689

    Default

    Quote Originally Posted by joshp707 View Post
    well we are going with a performance bonds thats going to cost 1300$,
    but if we prepay the chassis we will save 4600$.
    Just curious if anyone knows if we can get say 50% of the award upfront for this?
    Negative...the max. is 25%.

    Per the PG:

    8. Prepayments: A grantee may not use grant funds to prepay for any products or services in advance of delivery of the products or rendering of services. A down payment for the purchase of a vehicle is allowable if required in the purchase contract, but we will only allow up to 25 percent of the Federal share to be drawn for this purpose. No additional funds beyond the down payment will be provided in advance of the delivery of the vehicle. Any costs over-and-above the 25 percent limit such as the cost of a chassis or any other fees or services must be borne by the grantee or deferred until final payment is drawn. Federal funds may not be used for any other periodic or progress payments, except the final payment, which should not be requested until after the vehicle is received, inspected, and accepted by the grantee.

  5. #5
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    Jan 2010
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    Default

    thanks and that was the info i was searching for..

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