Government contracting is a great way to grow your business, but getting paid can sometimes take 90 days or more. Meanwhile, you’re still responsible for paying employees and vendors. That’s where government contract financing comes in. Government contract financing allows you to get paid within 24-48 hours of submitting your invoice instead of waiting 30-90 days for payment from the government. You’ll receive an advance on the amount you are owed, giving you immediate access to working capital that will help keep your business running smoothly, even when cash flow is tight.
This type of financing is typically offered by specialty finance companies that focus on serving small businesses working with the U.S. government. These companies understand the unique needs of government contractors and have streamlined their processes to provide hassle-free financing solutions to meet those needs.
If you are looking for a way to finance your new government contract, you should consider government contract financing. This is because there are so many benefits that come with it.
Some of the benefits include:
- Low rates and flexible terms
This is one of the most common benefits associated with government contract financing. Government contract financing offers very low rates and flexible terms. Unlike other forms of funding, this type of financing is usually tailored to suit the contractor’s needs. The government usually does this by offering its contractors a wide range of financial products.
- Fast funding
This is another benefit associated with government contract financing. Government contract financing offers fast funding to its contractors. This means that contractors will have access to their funding within 24 hours after applying for it. And since this funding does not involve any collateral, it is much easier to get than a bank loan or credit card loan.
- You don’t wait till the end of the to get paid
Government contract financing works by paying you the money you need to pay your expenses while working on your project. This means that you don’t have to worry about waiting until the end of the project to get paid because you will be paid right away. This is a huge benefit because if you aren’t able to pay your workers and suppliers right away, they may not be willing to work with you at all.
- Protects you against fraud by suppliers and employees
Government contract financing will protect you against fraud and abuse by employees and suppliers. Because the money is given to you in advance, there’s no risk involved with them not performing as promised, or even worse, stealing from you. The money is already yours. It’s just being given to you early so that you can pay for everything else.
- You don’t have to guarantee any loans personally
You will not have to personally guarantee any loans or put up any collateral for them. This type of funding is based on the contract itself and your ability to fulfil that contract and nothing else. That means if you have bad credit or no credit, it does not matter. It’s only the business that matters.
Government contract financing refers to a type of financing designed to help businesses fulfil large orders. This is especially useful for companies that are just starting out because it allows you to finance a large purchase order and lengthen the time you have to pay it off.