As such, your small business should enjoy factoring fees of 1-2% when factoring receivables. Cheaper Factoring Ratesīecause of the security of the account debtor, (the United States government) there is little worry about in terms of them defaulting on the debt. Government factoring levels the playing field for small businesses. The bigger companies have almost unlimited access to working capital funding through capital markets. Waiting net 30, 45 or even 60 days for payment from the government could hamper the ability to grow your business. One advantage of factoring invoices billed to the government is that the consistent cash flow provided allows you to bid on, and win, more jobs. Pros of Factoring Invoices for Government Increased Business Invoice financing and factoring allow you to focus on running your business. These funds can be used to make payroll, repay debt obligations, take advantage of supplier discounts or take on a new job. Your customers will receive a Notice of Assignment which has new instructions on where toįactoring unlocks the capital stuck inside your accounts receivable, providing cash to thousands of small businesses every day. The factor will quickly advance you funds based. Invoice factoring involves selling outstanding invoices to a third party, known as a factoring company, or factor. Consider invoice factoring to unlock the capital tied up in your accounts receivable. As a result, many contractors endure net working capital shortages.įor smaller, less established contractors, the situation can cause serious cash flow problems for your business. Many contractors and businesses must offer lengthy credit terms to larger commercial customers and government agencies to gain their business. They find it easier to contract out many services rather than hire and train new employees- too slow and expensive.īut anyone that has ever done contract work with the government knows that payment delays can be part of the gig. government has awarded billions in contracts, nearly a quarter earmarked for small businesses. Small Business Line of Credit: You’ve ArrivedĬongratulations, you were just awarded your first government contract! All the hard work and persistence has finally paid off- and in a lucrative way.Industrial and Commercial Bank of China.
Security Service Federal Credit Union Reviews.
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