For a contractor trying to grow their business, getting your first government contract is a big deal. It could easily catapult your business to the next level – provided you have enough capital to sustain your business until the government’s invoice is paid. While winning a government contract can be lucrative, because of all the red tape involved, the government can be notoriously slow in making payment.
Because taxpayer money is being used, that invoice will have to go through multiple channels to be approved and payment to be issued. This could take months and some contractors simply can’t wait that long to be paid. That said, there are still many benefits to taking on government contracts. They can provide your company with steady reliable work. once you’ve satisfactorily completed your first government project, it will be easier to obtain others. You could even become the government’s go-to-guy in your industry and land recurring government contracts. This will also boost your reputation within your industry. Many looking to use your services will see taking on government contracts as a testament to the quality of your work.
With the benefits it can provide, you wouldn’t want to pass up the opportunity to win a government contract, would you? The answer to that question is no. It just means it’s time to take advantage of government invoice factoring,
What is Government Invoice Factoring?
It can be difficult to take on the next project if a contractor has used all their resources on a government contract and is still waiting to be paid. Government invoice factoring can bridge the gap between completing a government project and receiving payment for it. This type of factoring works much the same as factoring does with other industries. Invoices are sold to the factoring provider who then assumes the responsibility of collecting on those invoices.
The difference is that government accounts are typically lower volume. Some factoring providers either don’t want to handle these types of accounts or don’t have experience dealing with government agencies. So if you’re planning to take on a government project, you should establish a relationship with a factoring provider who has experience dealing with government agencies.
Invoice Factoring Benefits
Waiting for government invoices to be paid isn’t the only time invoice factoring can be beneficial. It can also be used to generate capital from other unpaid invoices, supplying the capital needed to take on a government contract. Invoice factoring can provide your business with a consistent base of working capital, allowing you to always have enough cash readily available to take on the next project. Turning down a government contract or any project due to a lack of capital can damage your reputation and send potential customers to your competitors.
Another benefit of factoring is the application and approval process takes place much faster than it does with a conventional business loan. Also, a business loan approval hinges on your credit score and financial history. This can be an issue for some small businesses that haven’t established a solid credit history. With invoice factoring, the provider will be evaluating your customer’s creditworthiness, not yours. Approval can be a cinch with government invoice factoring. Although payment of government invoices may be slow, payment is always received, so experienced factoring providers understand there is virtually no risk involved.
Government Invoice Factoring Professionals
CapFlow Funding Group works with government contractors and may other industries to provide invoice factoring and other alternative funding solutions to keep their business moving forward. Whether it’s an unexpected opportunity like a government contract or everyday investment in business growth, it’s important to have the capital available to address it in a timely manner. While waiting for invoices to be paid, a business owner can miss out on a chance to move their business forward and push ahead of the competition. Invoice factoring can help you get the capital you need when you need it.
CapFlow Funding Group specializes in invoice factoring and works with a variety of businesses, large and small to fuel business growth. Our invoice factoring programs can benefit businesses in need of short-term working capital. We also partner with other lenders to provide funds for businesses that require financial services other than ours. Contact us today and find out how we can help you grow your business.