Here is some information from one of the companies I will be factoring for, who do government contractor factoring:
...many owners are forced to limit their number of contracts due to the financial instability that slow-paying agencies can cause a business. With accounts receivable financing, you can circumvent this age-old problem and get paid as early as tomorrow for work that has been completed today.
How Government Contract Financing Works
- Upon completion of the contract, or its benchmarks, submit your invoice and supporting documentation to the government agency while also sending a copy of the paperwork to the factoring company.
- The factor will then advance up to 80-90% of the gross receivable value by depositing the funds directly into your bank account (typically within 24 hours or less).
- The factoring company waits the weeks or months for repayment.
- As soon as the payment is received in full, the factor will release the remaining funds directly into your bank account after deducting the small factoring fee.
Benefits of Government Contract Factoring
- Same day funding
- Competitive advance rates and fees
- Short term agreements with no hidden fees
- You choose which customers to factor and which customers to pay directly
- 24/7 Online account access
- Free credit checks on new customers
- Dedicated account managers
- Extensive government contract financing experience
The last is to emphasis that, yes, the company I broker for has a lot of experience in government contracting invoicing, and dedicated managers can help you throughout the entire process.