Many small businesses such as suppliers and manufacturers have big hopes of landing a lucrative government contract. Though it can take some planning and preparation to secure such a gig, the work invested in landing a contract with the federal government is typically well worth it.
Government contracts have a reputation for paying well; they are also known for reusing the same suppliers over and over again. By landing a reoccurring government contract, you can secure a high margin client for years to come.
Government Contract Factoring Slashes Wait Periods
Though many small businesses may be eager to secure a government contract, they are not so eager to deal with the downside of having the government as a customer: super-slow payment periods.
The U.S. government has its way of doing things. If you want to do business with it, you must adhere to its standard policies and procedures, and this includes its account receivables and remittance system. Bureaucratic and slow moving, collecting what you’re owed from the government can take as long as 60-days.
The standard invoice payment window for government contracts is 45-days, not 30-days as it is with most businesses. If there are errors in the processing due to incomplete information, payment disbursement can take up to 90-days.
Speed up Government Contract Fulfillment
With factoring government receivables, your business won’t have to wait that long to collect on what it is owed. Business Factors purchases government receivables and will send you a check for them within 3-5 days. The federal government makes for an excellent client for factoring receivables because it always pays its debt, albeit at its own, very slow pace. Because the federal government is as close to a 100% guarantee that you can get, they are an ideal candidate.
Factoring Government Receivables Increases Cash Flow
Forty-five-day payment windows almost necessitate the use of government contract funding. Lengthy payment periods can cripple any company’s cash flow. Some government suppliers are not prepared for this 45-day payment period and the negative effect it can have on its business operations. Without incoming funds, a company can run out of working capital and have a hard time meeting its day to day business requirements. Government factoring can resolve this slow payment problem restoring healthy business financials in no time. This allows your business to:
- Purchase raw materials,
- Issue payroll checks on time,
- Cover the cost of day to day business expenses, such as lease, utilities, equipment and machinery payments and maintenance, and
- Invest in business expansion activities such as marketing and advertising.
A business that struggles to have sufficient working capital is unlikely to be able to pay for expansion or customer acquisition costs. Many businesses that are new to government contracting don’t have a plan in place for how to cope with this slow-coming invoice payment check from the government. In this situation, government financing can provide a quick solution to working capital shortages.
Take the Headaches out of Financing GSA Contracts
If you are searching for government financing, you will find that some factoring companies won’t provide factoring government receivables for several reasons, including longer than usual payment windows and complicated, bureaucratic processing systems.
To do business with the federal government, it requires that suppliers and financing companies alike follow its somewhat elaborate processes and procedures. Some invoice factoring companies decide that it’s not worth it for them to learn and adhere to these systems.
Business Factors is an established financing firm and is familiar with government contract factoring. It is experienced working with the government as a client so that payments can be processed accordingly and on time.
It is knowledgeable of the Federal Government’s Systems Award Management (SAM) and the Federal Assignment of Claims law that spells out the procedures for financing and invoicing of government contractors. This ensures that your business collects the maximum value from the invoice and doesn’t incur additional fees or delays due to not following the proper protocols.
Many More Reasons to Factor Government Invoices
When you partner with Business Factors, in addition to collecting on your invoice in a few days’ time, you don’t have to deal with the hassles of understanding and filling out complicated invoice payment forms. Business Factors handles all of that for you so you can just sit back and collect the check. For many suppliers, avoiding this paperwork aggravation is alone worth the costs associated with government contract factoring.
So don’t suffer through 45- or even 60-days of waiting to get paid. Partner with Business Factors instead, skip the wait period and collect on your invoices in a matter of a few short days.
Working With Business Factors & Finance is Easy!
Having the government as a client can be very rewarding — except when you are waiting for payment. The money you need might include stuff for:
- Purchasing materials to finish the contract
- Making payroll for workers assigned to the project
- Overcoming design and development delays and much more
Confidently call Business Factors for factoring Government receivables
Whatever service or product you provide, Business Factors specializes in helping government contractors. By offering government contract funding and services that can solve the problem fast, Business Factors, as your government factoring specialist, can save you time and money. How exactly do we do this:
- Get approved for cash for your unpaid government contracts in 24 hours or less — not in weeks or months like banks.
- Receive an advance of up to 96% of the face amount of your unpaid contracts.
- Experience a fast and easy set-up for government contract factoring.
- Pay low, money-saving fees on government contract financing.
- Save administrative time. Business Factors takes care of collecting on your contracts. We become your personal collection department.
- Call us for friendly, professional, confidential consulting anytime.
Business Factors & Finance requires no upfront fees and saves you time with simple credit qualifications, too. The financial strength of your customer, not your personal FICO and/or business credit score, is all it takes to receive government contract factoring from Business Factors & Finance.
Apply online or learn more about Government Contract Factoring:
- Take Advantage of Government Factoring to Get Paid on Time
- HUBZone Program Can Help with Government Contract Financing Assistance
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