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FP7 Financial Info and FAQs --> Financial Planning, Financial Spreadsheet --> Financial Planning / Budgeting FAQs

Is the Coordinator obliged to distribute the total amount of the received pre-financing? Or is it possible to keep back a certain amount?

The purpose of this pre-financing is to make it possible for the beneficiaries to have a positive cash-flow during (most) of the project; this is of particular importance for SMEs.


In the Grant Agreement it states that the Coordinator shall distribute money to the consortium with "minimum delay".


In some Consortium agreements the Consortium give the Coordinator permission to withhold moneys. We are very against this.


So to answer the question – look at your consortium agreement and see what was agreed there.


We advise all beneficiaries negotiating on their Consortium agreements that this issue is properly addressed to ensure pre-financing is distributed ASAP.


Note1: Withholding pre-financing as a management tool is NOT allowed.

Note2: If an organisation (mostly SMEs) is not able to fulfil their commitment as described in the DoW because pre-financing is withheld from them, then the Coordinator could get in trouble from the EU lawyers.

Note3: Coordinators that wish to withhold pre-financing in FP7 obviously do not understand the Guarantee Mechanism.

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