“Strive not to be a success, but rather to be of value.” – Albert Einstein

Government Contractors

Federal, state, and local government agencies purchase a wide variety of goods and services from small businesses. The federal government awards 23% of all contracts to small businesses which equated to roughly $115 billion of annual spending. While being awarded a government contract is a big milestone, it frequently comes with a big requirement of capital to fulfill the contract.

Government Contract Financing

Government contract financing is a sensible solution to bridge cash flow gaps while working on government contracts and bidding on new ones.

Ledgered Accounts Receivable Line of Credit

Unbilled Revenue Line of Credit

Mobilization Advance Line of Credit

Contract Bid Support

Government Expertise

Our team has over 40 years of experience working with both government contractors and the varying government agencies. GillmanBagley is registered with SAM.GOV and has deep expertise in the assignment of claims process. As a government contractor it’s very important to work with a finance company that not only understands your business, but understands your client, the government.

How Government Contract Financing Helps

Many government contractors focus all their efforts on the bidding process. However, most of them don’t realize that winning a bid is the easy part. The real work begins when you actually start providing the goods and services.

You must have quick access to financial resources; otherwise, you might experience two of the most common problems:

Cash Flow Issues

Not a lot of business owners consider that the government pays its invoices 30, 60, and sometimes even 90 days after you render your services. You need to ensure that you have enough cash to pay for daily expenses while waiting for your invoices to be paid. This is especially important if you’re working on several projects at the same time. Our financing programs are designed to help bridge cash flow gaps,
making sure that all your projects are running smoothly.

Paying Suppliers

Another important factor to consider is that even though a contract is awarded to a small business, the government’s purchase order often exceeds the capacity of a small business. Additionally, most suppliers require prepayment before delivering the goods. Government contract financing programs to pay for suppliers.

Invoice Financing

While the government is an excellent payer, it will usually take some time before you actually receive payment. Federal and state government contracts often pay after 30 days. As a result, contractors often have cash tied up in invoices. Invoice financing is a great way to put your pending invoices to use by selling these invoices in exchange for immediate cash. Once approved, we will advance a percentage of the total value of your invoices. We will send you the remaining percentage, minus a small fee, once the government pays the invoice.

Asset-Based Loans

If your company owns valuable assets, you can use them to qualify for asset-based loans. With asset-
based lending, you can use your business’ assets – inventory, accounts receivable, machinery, and
commercial real estate – as collateral for the loan. The terms and structure of the loan largely depend on the type of collateral, but with accounts receivable as a required and core asset class, most loans are structure as a credit line.

Invoice Financing

While the government is an excellent payer, it will usually take some time before you actually receive payment. Federal and state government contracts often pay after 30 days. As a result, contractors often have cash tied up in invoices. Invoice financing is a great way to put your pending invoices to use by selling these invoices in exchange for immediate cash. Once approved, we will advance a percentage of the total value of your invoices. We will send you the remaining percentage, minus a small fee, once the government pays the invoice.

Asset-Based Loans

If your company owns valuable assets, you can use them to qualify for asset-based loans. With asset-
based lending, you can use your business’ assets – inventory, accounts receivable, machinery, and
commercial real estate – as collateral for the loan. The terms and structure of the loan largely depend on the type of collateral, but with accounts receivable as a required and core asset class, most loans are structure as a credit line.

Unbilled Revenue Line Of Credit

You may need to pay for labor or buy additional inventory, materials, and equipment as you work on the project. However, you can’t immediately bill the government for these expenses. If this is the case, you can use your unbilled invoices to provide additional working capital. Unbilled receivables refer to the products and/or services you already delivered but haven’t invoiced yet. In other words, you’ve already provided the service but you haven’t billed them yet.

Mobilization Funding

Many contracts require small business owners to have upfront capital when they receive a new government contract. Ideally, the government contract will have a mobilization funding component, but in most cases government contractors resort to mobilization funding programs to obtain working capital. True to its name, mobilization funding enables you to perform on newly awarded contracts. Rather than turning down a great opportunity, mobilization funding provides you with the funds you need to get started.

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