Why (and how) factoring government invoices works & why to do it here

One of the companies we work with specializes in factoring government invoices, contracts, and incremental invoices. They have the know-how to get you the working capital you need through invoice factoring so you can stay focused on growing your operation.

Why factoring government invoices is an ideal cash flow solution

The great thing about landing government contracts is that payment is a sure thing. The not-so-great thing about government contracting is that payments are sure to be slow. It’s just part of working on government projects, right?

Not necessarily! You can eliminate the wait on payments by factoring government invoices. Instead of waiting 60-90 days for the red tape to clear and your check to arrive, factor your government invoices and contracts with a top invoice factoring company that knows how to navigate the financing aspect. Plus, because the government is a non-credit risk, factoring government invoices can be done with low factoring rates and high advances. This means more money in your pocket, faster, so you can, in turn, reinvest in your business faster.

How the government invoice factoring process works

The only real difference with government factoring is the type of customer. In this case, it works in your favor, as the credit risk for the factoring company is extremely low compared to the risk with factoring other types of business’ invoices. You also don’t have to be at the end of a project to get the benefits of factoring. If you have a government contract with incremental payments that are invoiced throughout the project or a contract for ongoing services (like IT consulting, security services, and so on) where you invoice the government every month or quarter, those can also be factored as early as the same day they are generated. Here’s how it works:

Day one:

• Generate an invoice (concluding or incrementally) for government services provided
• Factor the invoice
• Same day (or next business day) get an advance of 93-98% of the face value of the invoice

Day 30 – 60 – 90+

• Once the factoring company has received payment for the invoice from the government entity, any amount held in reserve also comes back to you, less a one-time factoring fee, which could be as little as 2% of the invoice amount

Still have questions? Request a free quote below or get more information about how invoice factoring works.

What could you do with expedited cash flow?

You might be asking yourself why it matters. After all, waiting on government payments is just part of the process. But what you might not be thinking about is what you’re losing out on while you’re waiting. Are you losing peace of mind because your creditors want faster payment? Are you stressed about making payroll? Are you waiting on the sidelines while competitors are landing bigger contracts or are able to fulfill more work orders? Do you wish you could save money by taking advantage of your suppliers’ cash and quick-pay discounts?

All of these questions represent what is referred to in business financing as “opportunity cost.” Opportunity cost refers to any opportunity you are missing out on because (in this case) you choose not to speed up cash flow by factoring invoices. Lack of cash flow can negatively impact your ability to replenish supplies, expand your operations, hire enough workers to take on more projects, and so on.

We would be happy to provide you with a 100% free, no risk quote for factoring government invoices, contracts, incremental payouts, and more. Give us just a bit of contact information and we’ll connect you with our government factoring specialists for a free quote. Or to get started factoring government payments immediately, fill out our online invoice factoring application.