Landing a contract with a government agency can be the opportunity that allows a small to mid-sized business to expand. The only drawback to these types of jobs is the delay in providing the service, product, or staffing and when you can expect to receive payment. For these issues, the decision to choose factoring government contract services to have fast access to the funds is a very smart business choice.
Government Factoring Services
Not all factoring companies will offer factoring for government contract and accounts receivables. It is always a good idea to shop around and choose a factor with experience working with government agencies at the local, state, or federal level.
This ensures that the factor understands this type of contact, and also the complexities of dealing with government agencies. It also helps if the factor has provided services for a particular agency or department as this can assist in processing your paperwork and having the cash into your account in just days from approval.
When you choose factoring for government contract, you will have up to 80% of the value of the accounts receivables you choose to factor in your account usually in a few business days. This is just the initial funding and, once the government has paid the invoice and the factor has deducted the fees, you will receive the balance.
Cash on Hand
When you choose factoring for government contract your business will have the cash on hand needed to buy materials, make payroll, upgrade or purchase equipment and even to have the financial ability to take on new work.
It is not a loan so there is no repayment, and you won’t have to worry about the time and effort needed to make collections and manage your accounts receivable, the factoring company will manage all of this.
With less pressure on your back office staff, and the ability to have access to cash without worrying about loan applications and long-term repayment plans, factoring for government contract gives your business more than just immediate cash.
Without any personal guarantees or the need to provide collateral, your business can continue to build its credit score and its customer base, putting you in a better position for growth and expansion in the future. It also allows you to take on more work and new contracts without extending the company financially, giving you great financial management options in the future.
