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Government Contract Financing

Landing a government contract is an excellent opportunity for any business. Even when problems arise and there is a government shutdown, government contracts always pay their companies. However, taking on a government project could quickly drain your working capital while you wait 30, 45, 60+ days for the government agency to pay. Invoice factoring for government contracts closes the cash flow gap contractors face between project completion and payment. With receivables factoring, business owners get paid upfront to ensure they have the funds necessary to cover all operational costs and payroll.

Bid on Contracts with Confidence

It’s true that businesses with the ability to extend credit terms often win the best contracts. By factoring government receivables, you’ll always have a steady source of working capital to accept new government contracts, cover payroll and operational costs, and take on additional projects while extending more generous payment terms. Don’t bypass opportunities. Invoice financing for government contractors and suppliers is the working capital solution you’ve been waiting for.

Government contract

Interested in learning more about utilizing factoring for government contracts? Factoring allows you to receive payment on your government invoices within hours of them being submitted to a factoring company. It is an option for invoices for government customers at the municipal level, all the way up to contracts for the federal government. As long as the invoice has been accepted by the government for a delivered product or completed service, you’re good to go!

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How Does Government Contract Factoring Work?

A large government contract has the potential to dry-up your cash flow and make it difficult to float other projects that may arise or complete the project you took on. Whether you’re working on a project for FEMA, the Department of Transportation, or your local school district, factoring can get you the funds you need.

Factoring government receivables is straightforward. It’s a debt-free alternative funding method that involves selling your government invoices to a factoring company.

First, you have to find the best government factoring company for your business. This is what we do for you by using our industry expertise and learning about your company’s needs.

You will go through a simple application process and then you can start factoring. Once the invoice is submitted, the factoring company you’re partnered with verifies the invoice and advances contractors the cash within one day.

Advances can be between 80%-90% and the remainder is held in a reserve account.  Then, the factoring company collects payment from the government agency. Once the invoice is paid, the factor releases the remaining portion in reserve back to the contractor, minus a small fee for the receivables factoring service.

The advance given from the factoring company is what you’ll be able to use to complete the project, continue running day-to-day operations and covering payroll, for example. Factoring government contracts is simply getting your money faster. Best of all, the money is debt-free, unlike a traditional bank loan.

Why Some Factoring Companies Don’t Want Government Contracts

Many factoring companies often hesitate to provide funding to businesses that deal with government contracts due to the significant amounts and concentration involved. However, at Factor Finders, we do not discriminate against government contractors. We recognize the necessity for such businesses to accept large contracts to sustain their operations. We also understand the potential challenges they face in terms of cash flow, which can be substantial. Therefore, we are more than willing to offer funding solutions to aid government contract-based businesses in overcoming their cash flow problems.

Funding for Government Receivables – How to Find the Best Option

Factor Finders is experienced in government contract financing. We understand that government factoring can be a bit more complicated than a traditional business-to-business factoring transaction, due to regulations and compliance requirements. Federal laws are in place to govern the procedures for assigning the financial rights to government contract invoices.

We’re well-versed in the Assignment of Claims law, as well as the Federal Acquisition Regulations, to ensure we provide the best factoring services to customers.

Get partnered with the best factoring company for your government receivables by contacting us for a quote.

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Government Contract Financing Requirements

Is Your Business Eligible for Accounts Receivable Factoring?

Contracts for federal, state, local and municipal projects are eligible for factoring government receivables.  Government receivables factoring offers the benefit of liquidity without debt, as well as total control of cash flow. Here’s an example of some industries that are eligible for receivables financing:

  • IT and computer services
  • Logistics and transportation
  • Military products and supply
  • Communication systems
  • Distributors and manufacturers
  • Engineering
  • Temporary staffing
  • Medical services
  • Construction

How to Qualify for Government Receivables Factoring

Factoring government contracts guarantees cash flow without debt. It doesn’t matter if you’ve recently started up or have a less than perfect credit history. It’s simple to qualify for invoice factoring!

  • The invoice must have been accepted by the government agency for the delivered product or completed service
  • The accounts receivable owned by the company must be unpledged

Companies that are ready for a growth spurt can make a big impression thanks to accounts receivable factoring. If you’ve been wanting to bid on government contracts, but held back due to cash flow concerns – now is your chance! If your business can benefit from obtaining government contracts, learn how to bid on them.

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You could receive cash as soon as today! Call us at (216) 292-5660.

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