So, if you own a business that sells to the government, be sure to look into factoring and purchase order financing. What is government invoice factoring Government invoice factoring is one of the many funding methods that you could use to finance your operations when fulfilling a government contract. Purchase order financing works well with invoice factoring and can also help you grow your company exponentially. Government invoice factoring is one way to finance your project and address these cash flow issues. In this case, the factoring company provides you with financing to pay your suppliers, enabling you to make the sale. If you are reselling products to the government, you should also consider purchase order financing. Once the government pays, the transaction is settled. You get to use the funds immediately, while waiting to get paid. Its a form of financing where the factoring company advances you money against your government receivables. There are many factoring companies that specialize in factoring government contractors and vendors.įactoring accelerates your government payments, and enables you to get paid in days rather than months. This product exists and is called invoice factoring. What business owners need, is a product that provides financing solely based on the business opportunity on sales possibilities. Although that may help, business loans are tough to get and take a long time to set up. But what if you dont? In that case, many business owners will try to get a business loan. Through factoring, our clients can assign their invoices with the Administration to us: we advance the money owed to them in the form of financing. This is not a problem if you have 60 days worth of operating capital in your bank account. In the meantime, you have to cover all your recurring expenses such as payroll, rent and supplier payments. Why? Government agencies take, on average, about 40 days to pay their invoices. ![]() Original article from Georgia Tech Procurement Assistance CenterĪre you selling products or services to the government? Every year, city, county, state and the federal government buy billions of dollars in goods and services from business of all types.Īlthough doing business with the government is great and financially rewarding, it can also be hard on your cash flow.
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