Factoring also lets you take advantage of your own vendors’ early payment offers. You might be able to be more flexible with the payment terms you offer customers, also helping you win additional business. Because the factor handles collections from the agency, you can redirect your business staff from tracking invoice payments to winning new business. As your business grows and you get new invoices, your access to funds automatically increases.įactoring government contracts offers several benefits besides just immediate access to cash. Your business submits invoices for factoring only when needed, only as much as needed. There is no minimum or maximum amount, or commitment to submit invoices regularly. There’s tremendous flexibility in the accounts receivable factoring process. Why You Should Use Government Invoice Factoring The funds are paid to you via either wire transfer or direct deposit to your business bank account. Minimal documentation is required, there’s no dependency on your company’s credit score, and there’s no collateral needed-just the unpaid invoices that haven’t been pledged to another company. It generally takes less than a week to complete paperwork and get set up with a factoring company. Getting started with government receivables factoring is simple.
GOVERNMENT INVOICE FACTORING FULL
The government receivables factoring company handles the process of collecting the full balance and sends you the remaining amount minus their fee once the invoice is paid. Once you submit the information about your unpaid invoices, your company gets up to 90 percent of the invoice balance in as little as 24 hours. The process of factoring government contracts gets your business cash quickly.
GOVERNMENT INVOICE FACTORING HOW TO
How to Start Factoring Government Receivables Instead, existing account receivables are turned into cash by selling them at a discount. Also known as accounts receivable factoring, government contract factoring doesn’t require taking out a loan and doesn’t burden your business with debt that needs to be repaid. Government contract factoring lets companies turn their unpaid invoices from government contracts into immediate cash. Having to wait for payment on government contracts impacts your business’s cash flow and ability to conduct business.
Unfortunately, government agencies are often big bureaucracies, which means they’re also often slow payers. They aren’t going to fold up and go away, and because the government can collect taxes, they’re likely to be reliable payers. Government agencies can be great clients.
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