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Funding Government Contracts through Accounts Receivable Financing

The United States government has hundreds of federal agencies and each of these use contractors to provide various services and goods.  They assign contracts to private businesses throughout the United States.  This gives thousands of companies the opportunity to bid on these jobs and work for the federal, city or county government.   

The United States government has hundreds of federal agencies and each of these use contractors to provide various services and goods.  They assign contracts to private businesses throughout the United States.  This gives thousands of companies the opportunity to bid on these jobs and work for the federal, city or county government.   Many businesses find these contracts very advantageous because the government is very likely to pay for any job they contract out.

These types of contracts aren't without their financial challenges.   Government contracts can require a large amount of working capital to fulfill.   They can suck your cashflow dry putting a crunch on payroll and other mission critical business operations.  Lining up proper financing is very important to successfully completing a government contract.  Government contract financing can be a very effective way for companies to fund the operational costs associated with doing business with the Federal, city or county government. 

They are available for both small and large businesses.  For example a five year old company, headquartered in Ft. Lauderdale, FL, provides roofing and repairs to distressed properties through a program developed by local and county agencies to clean up cities in Florida. Previously a general contractor, the company was awarded a contract by the city and continues to receive more contracts from the local government. Due to the nature of the contracts, the company does not get paid until the very end of the job. If a house qualified for the program, the company would do the repairs, wait for the county underwriter to inspect the job to ensure work was completed according to local codes and guidelines, get the proper approvals, then submit a stack of paperwork and the invoice.


Having to pay for labor and materials up front, the company faced a shortage in working capital, putting them in a cash crunch. Without financing, they would not have been able to take on the additional contracts.

Although the company was aware of accounts receivable financing, they weren’t sure who to reach out to until they did an Internet search. They found a factor with a broad range of industry expertise and knowledge of government contracts, permits and local planning processes. The factor's expertise in working with government entities made the process smoother for their client. They also developed relationships with the right people to turn approvals around quickly for each area involved – the cities of Tamarac and Sunrise as well as Broward County.

The factor accounts receivable financing line quickly provided the company with the cash flow they needed, when they needed itArticle Search, so they could take advantage of new contracts and continue to grow.  The company now has the potential to increase their business significantly with the accounts receivable facility in place.

Source: Free Articles from ArticlesFactory.com

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