Tips For Choosing Government Contractor Financing
Posted by admin , on Oct, 2015
Working as a government contractor as some or all of your business has its perks as well as its challenges. On the positive side, there is very little risk of a default on the invoices, and it tends to be very steady work once you obtain your first contract.
On the downside, as a government contractor you often have a significant lag between when the work is performed, or the product supplied, and final payment on the invoice. This is commonly thirty to sixty days, but in some cases and with specific types of contracts it can be as long as 90 days.
Choose the Factoring Company Wisely
While we specialize in government contracting financing through our factoring program, not all factoring companies will work with government contracts. Government contracts tend to be low volume types of accounts, which may not fit into the minimum volume requirements for accounts many factoring companies have in place.
If you are considering using factoring for government contracting financing, be sure to verify with the factoring service that they can provide funding for government contracts.
Consider Fees
Just as with the minimum volume requirements, some of the other factoring companies in the industry, even if they accept government contracts and accounts receivables, will also charge fees for issues such as documentation and due diligence on all accounts.
With government contracts, this is really just money to the factoring company. While they will complete the paperwork, there is no actual due diligence to verifying that a government contract is valid, meaning the business is paying for unnecessary fees and services.
Application Process
For our government contracting financing factoring, we do not charge an application fee, a termination fee or any other hidden or additional fees for our service. We charge competitive rate based on the amount of the accounts receivable we acquire, which is something that you will determine based on your unique cash flow needs.
When you work with the government for some or all of your income, having a strong partnership with a top factoring company is a true asset to your company. We value the business you have with the government agency, and through our factoring services we can fund the accounts receivable, handle the collection process, and allow you to focus on building your business and seeking new and unique opportunities to continue to grow.
