Financing Government Receivables
0.69% to 1.59%
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We Attract Clients That:
What is Government Contractor Receivables?
Government Contractor Receivables financing allows businesses working on government contracts to receive immediate cash by advancing the value of their unpaid invoices. Since government contracts often have long payment terms, this solution helps contractors maintain cash flow to cover operating costs, payroll, and other expenses while waiting for government payments.
At 1st Commercial Credit, we can provide immediate funding for your business. The invoices billed to the government for goods delivered or services rendered can be converted into a "Accounts Receivable Credit Line" from which you may draw cash to better manage your business.
We fund on direct federal contract receivables and from prime contractors.
We have experience in financing receivables to companies whose primary business is performing technical services or manufacturing for the federal government.
Technical service companies may include those that provide computer-related services, communications systems, computer systems maintenance, programming support, facilities management, logistics, engineering, and military related products, temporary staffing, distributors and other types of manufacturers.
Government Receivable Financing is our Business
Fast Approval Process
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3 to 5 Day Initial Setup
Uneven seasonal sales
Accounts Receivable Financing is our Business.
Fast Approval Process
3 to 5 Day Initial Setup
Uneven seasonal sales volume
Our Customers Experience Slower Payments when they deal with Prime Contractors or Directly Invoice the Federal Government.
We have specialized experts that are familiar with the "Assignment of Claims" which is a federal law which allows and specifies the procedures for assigning financial rights to invoices of government contractors. The Federal Acquisition Regulation (FAR) also governs how we carry out our responsibility for effecting the assignment.
Our clients in this industry are struggling with the following:
- Cash flow shortages in weekly payroll and fixed overhead.
- Big contracts use up all your operating capital and pay net 30 to 60 days later.
- Passing up new contracts and sometimes can't even fulfill the ones you have on hand.
Most factoring companies do not want to fund receivables that contain high concentration in a few customers which is very common in the government contract industry. One recent transaction funded in the range of $736,000 for just one invoice.
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How Government Invoice Factoring Helps Businesses Resolve Their Cash Flow Issues?
1st Commercial Credit provides government receivable financing for businesses across the nation.
Government agencies (state, federal, and local) can provide your company with a big push in work and revenue but they can also place you in a challenging cash flow situation. Now, as you know, your company still need to pay workers and contractors to work for the government job at potentially prevailing wages. You will also need to pay for overhead costs and materials. Unfortunately, your business won’t receive any payment for those efforts until months after the work has been completed.
Securing a government contract can significantly boost your business, as state, federal, and local agencies often outsource a large volume of work to private companies. Whether you provide services or manufacture products, landing a government contract typically means steady work and recurring revenue.
However, working with government contracts presents a major challenge: delayed payments. Government clients are often slow to pay invoices and do not offer any upfront payments. It can take anywhere from 30 to 90 days, or even longer, to receive payment.
Additionally, government agencies are demanding clients. They choose suppliers that can best meet their requirements and can replace your services at any time.
For businesses facing these challenges, 1st Commercial Credit offers several financing options. One effective solution is government contract factoring, which provides you with fast cash upfront to pay your employees and vendors while waiting for payment from the government.
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How Does Government Contractor Factoring Work With 1st Commercial Credit?
Factoring government contracts is a funding solution that resolves a businesses’ cash flow issues. In this alternative financing solution, a business will agree with a company that factors receivables and provides funding for unpaid invoices.
The factoring company advances an agreed percentage of the unpaid invoice balance. The business gets that cash immediately and can use it for whatever they wish. The factoring service company will then collect the payment directly from the clients and keep the amount it advanced plus a small processing fee. The remainder of the payment is sent to the business once the invoice is paid in full.
One of the significant advantages of using your government receivables as collateral for a receivable loan is that the application, approval, and funding process take only a few days. Another advantage is that factoring companies usually will not focus on your credit history. Instead, they are more interested in whether your customer will pay on time. That means that factoring can still be a viable option for you if your business has low credit or bad credit.
1st Commercial Credit has extensive experience making cash advances on contracts with local, state, and federal government agencies. We understand the payable procedures and how to work with government clients to collect payment.
What Are The Best Industries For Our Government Contract Program?
When companies deal with government contractors, there's often an extended time between invoice and payment. The problem is that working capital is needed today to meet payroll and fund operating costs. By selling your government invoices and accounts receivable to 1st Commercial Credit, you can turn government receivables into immediate cash.
We fund clients in a wide range of sectors, including:
Manufacturers — When a manufacturing company is growing, it is crucial to plan how this business growth will be financed. Growth usually requires investment in infrastructure, marketing, expanded inventory, additional staff, and fixed costs associated with the business. Your manufacturing company should have the ability to grow without worrying about turning down contracts or being forced to minimize the growth because of cash flow shortages. 1st Commercial Credit provides manufacturing business loans to firms experiencing working capital shortages.
Distribution — Distributor factoring is a financing solution for contractors and suppliers in need of fast cash. Invoice factoring provides consistent cash flow for companies to meet payroll, cover expenses, and grow their business. 1st Commercial Credit includes invoice factoring and supply chain finance solutions for distributors and wholesalers. Distributors are often faced with a lack of capital to satisfy their increasing purchase orders.
Temporary Staffing Agencies — Staffing agencies sometimes struggle to meet weekly payroll when it takes anywhere from 30 to 90 days for payments to come in. Payroll funding for staffing agencies gives companies access to the working capital they need to meet payroll obligations and grow.
Service providers — We provide funding for the service industry every day. Factoring offers companies a financial solution by turning invoices into same-day cash. As a result, cash-flow issues caused by slow-paying customers are eliminated. Factoring for service providers involves a debt-free financing solution that gives you money to cover your bills, fund payroll, invest in new resources, and more.
Trucking & Freight — For businesses in this competitive industry, freight invoice factoring is a reliable and optimal finance solution. Invoice factoring will give a cost-effective and trustworthy finance option for trucking firms with freight brokers as customers.
Construction — Construction factoring is a different type of financing that might help you with your cash flow problems. In the construction industry, late payments from clients are common. Unpaid bills, on the other hand, may lead your company to stop accepting new, more extensive projects. Factoring allows businesses to get the money they need to expand their construction staffing efforts, pay employee payroll, upfront costs, and purchase equipment.
Let us help you solve your cash flow challenges and handle your government contracts. 1st Commercial Credit has the experience, knowledge, and ability to get you the cash you need and run the government agency's collection effort.
We Attract Clients That:
Government Receivable Financing (Rates and Fees)
When exploring government receivables financing, understanding the costs involved is crucial. At 1st Commercial Credit, we offer competitive and transparent rates, typically ranging from 0.69% to 1.59%. Our financing solutions are designed to provide the flexibility and speed you need, allowing you to access funds quickly without hidden fees. Whether you’re looking to manage cash flow during long payment cycles, cover operational expenses, or capitalize on new opportunities, our government receivables financing offers a cost-effective way to enhance your company’s financial stability.
FAQ About Government Receivable Financing
This financing option helps businesses bridge the gap between completing a project and receiving payment. It provides immediate access to capital, enabling you to cover payroll, overhead, and other expenses without waiting for government payments, which can take 30 to 90 days or longer.
Any business with government contracts can benefit from this financing solution, including those in construction, IT services, logistics, staffing, and more. If you provide goods or services to federal, state, or local governments and face long payment cycles, government receivables financing can help maintain your cash flow.
Unlike a traditional loan, government receivables financing is not debt. It involves selling your invoices for immediate cash, which doesn’t affect your balance sheet or require additional collateral beyond the invoices themselves.
