Government Contractor Financing

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    Financing for Government Contractors

    The federal government awards about 23% of all government contract to small business owners. On an annual basis, the federal government commits approximately $500 billion in government contracts for research and development, as well as goods, and services. This means that around $115 billion of government contracts are awarded annually to small business owners.

    SMB Compass can provide government contract financing for federal, state, and local government contracts. Our programs are also designed for both prime contractors and sub-contractors. It’s also always best you work with a company that understands the federal assignment regarding the claims process!
    Government contracts come with a varying degree of capital needs. Small businesses incur both upfront and ongoing expenses that can be financed through government contract financing programs.

    What this means is, a government contractor loan can be structured in many ways, but as always, the details are important, so be make sure they support all of your financing needs.

    At SMB Compass we specialize in government contract financing and have the ability to provide support to different contract types. We also can provide mobilization funding, support letters to help strengthen bids for new contracts, and can provide government contract funding for earned but unbilled invoices.

    Multi-year government contracts enable small businesses to accurately project future revenues. With accurate projections and budgets, you as a small business owner have the option of securing government contract financing through a variety of structures.

    Ready to apply for a Government Contractor Financing?

    Loans for Government Contractors

    Ready to apply for a Government Contractor Financing?

    FAQ About Government Contract Financing

    What is government contract financing?

    The U.S. government awards contracts awarded to small and medium-sized businesses help boost economic development and create more jobs. Business owners bid for these contracts and the winner becomes the one who delivers the products/services the government requires.

    While winning a bid may seem like a profitable opportunity, small business owners need to fund upfront costs and other expenses before taking on a project. After rendering your services, you need to wait for the government to pay invoices, which can approximately take one to two months.

    Fortunately, government contract financing helps these businesses bridge gaps in cash flow by giving them the working capital needed to successfully run their business while waiting for payments.

    What are the different government contract financing options?

    There are several government contract financing options available for small business owners. Among them:

    • Invoice factoring
    • SBA loans
    • Asset-based loans
    • Bridge loans
    • Business term loans
    • Equipment financing and…
    • Mobilization funding

    These are some of the loans a business owner can apply for.
    The ideal type of loan depends on your business’ goals and needs which are unique for your company.

    For example, if your business needs immediate funding but you don’t have enough assets to secure a long-term loan, invoice factoring may be a good option. It’s always best you speak with a financial expert and get all the details.

    When is the best time to apply for government contract financing?

    Many people think the best time to apply for government contract financing is after you’ve won a bid. However, we recommend you apply for one even before you win the contract. Building positive relationships with financial companies makes it easier for you to finance your business.

    Having financing in place, demonstrates your ability to fulfill your role as a top-notch professional contractor.

    How long does the application process take?

    The application process for government contract financing depends on the type of loan you qualify for. If you need cash fast, there are financing options that can fund your business within 24-48 hours upon approval.

    To expedite the process, be sure to have all the necessary documents on hand, and double-check everything before submitting it.

    Is government contract financing the best option for your business?

    Many companies from various industries use government contract financing to fund their contract work. However, what might work for them, may not work for your business. You need to evaluate your business to know whether government contract financing is a suitable option or not.

    Start by assessing your financial capabilities, and don’t hesitate to talk to a financial expert. They can help you evaluate your business and determine which type of loan is best for you.

    Ready to apply for a Government Contractor Financing?