Government contractors frequently depend on government factoring to help close the gap between finishing their work for a government agency and getting paid for it. Often the wheels of government turn very slowly: multiple levels of approvals, verifications, and procedures can delay payment for weeks and months. It can take deep pockets and a large line of credit to keep your company going during that wait. Many government contractors, especially startups and companies without a strong credit history and significant collateral, simply do have ready access to large cash reserves or traditional bank loans. They turn to a factoring company that specializes in government factoring.
Winning a government contract – whether it’s at the federal, state, tribal, or municipal level – can bring your company great benefits. Government work can be steady and profitable. It also can lead to repeat business. You’re working for an entity that can be counted on to pay its bills, so there is no credit risk. However, governmental agencies and departments invariably have long payment terms, sometimes up to 90 days or longer and often follow a pay-as-you-go process on long-term contracts.
Government factoring gets you paid upfront. As soon as you submit your invoice for services rendered or products delivered, your factoring company goes to work processing payment to you for a large portion of the invoice value. Often within a day, the funds that are due to you are deposited to your bank account through ACH or wire. The remainder will be sent to you promptly, minus a small factoring fee, when the government pays on the invoice. With government factoring, you can pay your staff and your bills and focus on doing what you do best: running your company.
When you’re exploring working with a factoring company to speed up your cash flow and maintain a consistent base of working capital, look for a well-established and reputable company with a history of helping government contractors meet their goals. Your company’s survival depends on sound business decisions. A government factoring company that knows your industry and your customers is better suited to make quick business decisions and provide the specialized services you want and need.
One of the key benefits of factoring for companies that rely on government contracts is that you won’t be incurring debt. With Interstate Capital, you will quickly boost your cash flow without gaining additional debt to your bottom line. Interstate Capital has helped other government contractors meet payroll and run their business without the stress of waiting for payment. The government factoring specialists at Interstate Capital who work with government contractors are ready to help you take on the projects that can will keep your company profitable and growing. Get an instant factoring rate quote today.