Prepayment (customer deposit)
A prepayment is money the compute buyer pays before service starts, often a share of total contract value, credited against later invoices. It funds hardware and shows the buyer’s commitment.
Prepayment on a 36-month contract
| Contract value | $34.3M over 36 months |
| Paid before service | $10.3M (30%) |
| Contract value still at risk on day one | $24.0M |
HPE / Soluna, SEC Exhibit 10.105, as summarized in compute offtake agreements.
How it works
A deposit before service starts. Reserved capacity usually requires one, and larger prepayments are negotiated: HPE required Soluna to pay $10,293,350, 30% of a 36-month, $34.3 million contract, before it became effective (compute offtake agreements).
Some buyers prepay per tranche. IREN’s Microsoft deal requires 20% of each tranche’s value before delivery, credited against fees after the 24th month. SharonAI’s $1.25 billion MSA with ESDS adds $140 million in letters of credit or bank guarantees.
What lenders check
Cash already paid cannot default. The prepayment usually funds hardware, which lowers the debt needed, and gives the buyer a reason not to walk.
It can lift a weak buyer a tier. In our Offtaker Credit Score, a 20% prepayment, a 6-month letter of credit and lender protections can move a Series B startup buyer from AC-4 to AC-3.
Discuss a transaction
Send us the equipment list and the loan or lease you have in mind. We will come back with an indication and the questions we would need answered.
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